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OR Alternatives to Small Claims Court

Is an auto mechanic refusing to return your car because you're arguing over the amount he charged or the quality of his work? Or maybe you were in a fender bender and the other driver won't pay to have your car fixed? These are the types of disputes that are handled by the Oregon small claims court, or "people's court." It's designed to be a fast, informal and inexpensive way for you to get the money you're owed or to your property returned.

Maybe you don't want to file a lawsuit, not even in the people's court. That's okay. A lot of people don't like courtrooms or dealing with the "legal process." You do have some alternatives to filing a lawsuit in small claims court, such as:

  • Personal negotiation
  • Mediation
  • Arbitration

Any one of these tactics may help you get your money without having to step foot into a courtroom.

Personal Negotiation

This should be your first step, even if you're prepared to file a small claims lawsuit. All this involves is a simple phone call to the other person asking that she pay what's owed to you. Be polite and cordial. Maybe you can work out an agreement that benefits everyone.

If your initial conversations aren't getting you anywhere, then consider writing a demand letter. It's exactly what it sounds like: A letter demanding that the other person pay you within a specific period of time, like 15 or 30 days. To be effective, the letter should:

  • Briefly explain why you think the other person owes you money
  • State exactly how much money you're demanding
  • Clearly state that you intend to take legal action, including filing a lawsuit in small claims court, if you're not paid within the time frame you've given (like 15 or 30 days)

At the very least, you should mail the letter certified mail, return receipt requested. With this, the recipient has to sign for the letter and you'll get a return receipt when it's delivered. When you get the return receipt, make sure you keep it (along with a copy of your letter) so that, if necessary, you can prove later that your letter was received.

This can be an important step if you're later left with no choice but to file a lawsuit. In Oregon, when you file a lawsuit in the small claims court, you have to sign a statement swearing that you've tried to settle the dispute with the defendant. A copy of your demand letter and the return receipt will show that you tried to settle the case before you turned to the court for help.

Mediation

Mediation is an informal meeting between you, the defendant, and a neutral third party, called a "mediator." Most of the time you'll meet together, but sometimes you and the defendant will meet separately with the mediator. The mediator's job is to help you both reach an agreement. She can suggest different options to help you reach that agreement, and she may even suggest a particular course of action, but she can't force or order either of you to do anything.

In most instances, mediation will be offered at no or little cost to you or the defendant. Depending on your and the defendant's willingness to negotiate and compromise, it can lead to a very quick and mutually satisfactory resolution of your claim. Both parties have to agree to mediate, however. (Unless, or course, the court orders you to mediate).

The courts like mediation, mainly because it saves time and court resources. In fact, in some Oregon small claims courts, the court may ask or maybe even order you to mediate your claim when you show up for the trial or hearing after a suit is filed.

The Oregon Mediation Association can help you start the mediation process.

Some Rules to Know

There are some things to keep in mind about mediation, such as:

  • It's not binding, meaning that, even if you and the defendant reach an agreement, the mediator can't enforce it unless you and the defendant ask the court to approve the agreement. In such cases, the agreement becomes enforceable by the court
  • The mediator can't provide legal or personal advice. She can only suggest possible ways to settle the matter and help you both make sure that you reach an agreement that's good for you both
  • It's you and the defendant that make the terms of the agreement, not the mediator. The mediator will only write down or document what you've agreed to
  • The mediator doesn't make a "decision" in the case like a judge would in the small claims court. That is, she doesn't decide who "won." Rather, she merely helps you reach an agreement
  • At any time, either party can withdraw from mediation
  • If you and the defendant don't reach an agreement through mediation you can still file a lawsuit in small claims court. In other words, you don't waive your right to file suit simply because you agree to mediation. This is true for the defendant, too, if he has a "counterclaim" against you, that is, he claims that you owe him money
  • Attorneys are usually not present during mediation. You can, however, hire an attorney to advise you about your claim, if you'd like

Arbitration

Arbitration is very similar to mediation. Here, a neutral third party, called an arbitrator, listens to both sides of the story, just like a mediator does, in the hopes of helping you reach an agreement. However, there are some important differences between arbitration and mediation:

  • If you and the defendant can't reach an agreement, the arbitrator will make a decision in the case, that is, decide if you're going to get paid and how much
  • The arbitrator's decision is binding, unless you and the defendant agree beforehand that it isn't binding. This means that it can be enforced by the arbitrator and, if necessary, the courts, if you or the defendant don't follow the decision
  • After going through arbitration, you can't file a lawsuit in an Oregon small claims court
  • Arbitration can be expensive. An arbitrator may charge between $50 to $125 per hour to listen to and decide your case, and usually, both parties share the costs

As with mediation, you and the defendant have to agree to arbitration (unless it's ordered by the court). However, you both also have to agree on the arbitrator. The clerk of the justice or circuit court may have a list of arbitrators that you may contact. Or, you can contact the American Arbitration Association for a list of arbitrators in your area.

Questions for Your Attorney

  • I can't get the defendant to answer my phone calls or letters. Is there any benefit in offering to mediate?
  • The defendant agreed to mediate my claim, but now he won't meet with or talk to the mediator. What should I do now?
  • How much will you charge me to file a lawsuit and represent me in small claims court? Would the lawsuit and the court fees cost me less than paying for arbitration?
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