Gov. Jerry Brown signed legislation today that will increase small claims court jurisdiction from $7,500 to $10,000 in most cases. The increase, backed by the Judicial Council, is the first in six years.
“For individuals with damages of less than $10,000 justice is difficult to come by, and the usual result is to settle at the jurisdictional limit,” said the bill’s author, Sen. Joe Simitian, D-Palo Alto. “Senate Bill 221 will help close that gap, and provide civil litigants access to a process that is fair, timely and affordable.”
Litigants will still be barred from filing more than two claims above $2,500 a year in small claims court. And until July 2015 the $7,500 cap will remain on bodily injury claims resulting from car accidents. Insurers had raised concerns that the $10,000 limit would stop them from defending their customers -- even as they are contractually obligated to do -- against lawsuits brought in small claims court.
Although some have suggested that increasing the small claims limit will encourage more litigation, statistics from the Administrative Office of the Courts show that the number of small claims filings has dropped by about a third over the last decade. The number of small claims lawsuits remained relatively flat after the last increase in 2005.
The new limit will take effect on Jan. 1.