Effective July 1, 2011, the state’s general district courts will gain the ability to handle claims up to $25,000 – an increase from the current $15,000 ceiling. Even if a claim is based on events that have already occurred, the general district courts can handle the larger claims as long as they are not filed until July 1 or later.
While the state’s circuit courts can handle claims no matter how large they might be (as long as they meet the $3,000 minimum), general district courts offer an important alternative for handling smaller claims where keeping litigation costs under control is essential. With the increase in the lower courts’ jurisdictional limits, creditors and others with civil suits will gain an important option for claims that fall into the $15-25,000 range. For any suit for an amount between $3,000 and $25,000, the decision of which court to file in is critical. While only the circuit court offers the option of trial by jury, and expanded discovery powers, as a practical matter, invoking those procedures increases litigation expenses beyond the amount in controversy. Having the option of proceeding in the general district court, with its faster and less proceduralized case handling, often makes it possible to get justice on a budget that is more tailored to the size of the case. For this reason, the increase in jurisdictional limit of the general district courts will be beneficial for a great number of potential plaintiffs.
We commonly recommend filing in general district court for any case under $15,000, and in fact, it is not unusual to see plaintiffs with claims of up to $20,000 file there in order to keep a lid on litigation delays and costs, even though it means capping their recoveries below their potential value. Now, with the cap increase, plaintiffs will not have to face that tough choice; they can go to general district court without having to give up part of their claim.
General district courts are not always the best option. If a party believes it has a valid claim but cannot hope to prove it without full powers of discovery, circuit court should still be strongly considered. But since it makes little sense to begin a law suit unless you hope to recover more than you spend on lawyers, keeping the lawyer bill to a lower level will always be a critical factor in deciding where to file your suit. And if you are currently thinking of filing a suit for an amount that falls between $15,000 and $25,000, you may want to be patient. By waiting just until July 1, you will gain the ability to go to general district court without locking yourself in to an artificially diminished recovery.
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