Governor Snyder has recently signed legislation changing the Michigan Small Claims Courts maximum jurisdictional amount in controversy from $3,000 to $5,000. The increase will take affect on September 1, 2012. The jurisdictional limit will periodically increase up to $7,000 by January 1, 2024.
The jurisdictional increase benefits both businesses and individuals. Businesses should see savings on the cost of litigation on loan defaults, fraud, and other claims. Individuals will also save money on litigation costs. Instead of having to hire a lawyer to handle claims above $3,000, they will now be able to present a case on their own to the judge.
It is important to note that despite the increase in the jurisdictional limit, in order to proceed in small claims court, the consent of both parties is needed. If one party does not want the case to proceed in small claims court, then that party can have the action removed to the district courts. Additionally, attorneys may not be used in small claims court.