The Texas legislature has changed the jurisdictional limit of Justice of the Peace courts in Texas. As of September 1, 2007, the limit goes from $5,000 to $10,000. See § 27.031(a) of the Texas Government Code. With few exceptions, the total amount of a judgment that can be taken against a defendant in a Justice of the Peace court will become $10,000.
Along with this change to the Justice of the Peace court, Small Claims courts in Texas should also have this new jurisdictional limit. In Small Claims courts, a company does not have to be represented by an attorney. In other courts in Texas, a business entity has to be represented by counsel. Consequently, this could save businesses attorneys’ fees by being able to file a lawsuit and/or defend a lawsuit in Small Claims court with the amount in controversy now able to be raised up to the amount of $10,000. Please also remember that if the lawsuit is appealed to a County Court at Law, the entity must have legal counsel. Of course, all parties should benefit from having legal counsel even if there is no requirement to have counsel.
Historically, Small Claims court and Justice of the Peace court cases are filed by pro se plaintiffs against defendants. The purpose of allowing such claims to be filed in such courts with little and/or no evidentiary and procedural rules allows plaintiffs to have their disputes heard and decided almost based solely on the facts of the case. Some cases, such as forcible entry and detainer actions, will still need to be filed in Justice of the Peace courts.
In summary, the raising of the jurisdictional limit will allow additional disputes to be filed in the Small Claims courts and Justice of the Peace courts. In most instances, the Justice of the Peace’s court’s docket moves more quickly and cases reach trial and get resolved more quickly. While businesses may be able to litigate in such courts without an attorney, Hirsch & Westheimer, P.C. would encourage such businesses to consider engaging counsel where it appears to be cost-effective to do so. In other words, if a lawsuit has legitimate arguments to be made, a lawyer, in most cases can provide either a better defense and/or better prosecution of the cases to obtain a judgment. Regardless, with the new higher jurisdictional limits, Hirsch & Westheimer, P.C. expects more cases will be filed in JP courts and Small Claims courts.