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VA Alternatives to Small Claims Court

Were you involved in a fender bender and the other driver won't pay to have your car fixed? Did a friend stop repaying a loan you made after she used some of her jewelry as collateral, and now you want the jewelry to pay off the loan? These are the kinds of legal problems that are handled by the Virginia small claims court. It's a court that's designed to be a fast, informal and inexpensive way for people like you to get the money they're owed or personal property that they're entitled to have.

What can you do if you don't want to file a lawsuit, not even in the small claims court? 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

Personal negotiation 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 person who owes you money (he'd be called the "defendant" if you ever filed a lawsuit) asking that he pay what's owed to you. Be polite and cordial. Maybe you can work out an agreement that benefits everyone.

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

  • Briefly explain why you think he 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 15 or 30 days

At the very least, you should mail the letter certified mail, return receipt requested. This means the other person has to sign for the letter when it's delivered, and after it's delivered, you'll get the return receipt. Make sure you keep it, together with a copy of your letter so that if necessary, you can prove later that the letter was in fact delivered to the other person.

Mediation

Mediation is an informal meeting between you, the other person and a neutral third party, called a "mediator." Most of the time you'll meet together, but sometimes you and the other person 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 way to settle the case, 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 other party, and usually you both share the costs if there are any. If you and the other party are willing to negotiate and compromise, it can lead to a very quick settlement that makes everyone happy.

The courts like mediation, mainly because it saves time and court resources. In fact, in Virginia, if you file a lawsuit in small claims court, it's very likely that the judge will offer mediation, and usually at no cost. If one of you doesn't want to mediate, or if you agree to mediate but you can't come to a settlement, then the case will go back to the judge for trial. If you do reach a settlement, the court will approve it and it will enforceable by the court.

Some Rules to Know

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

  • Unless the court makes an "agreed order" approving the agreement, it's not binding, meaning that, even if you and the other party reach an agreement, the mediator can't enforce it. So, if the defendant later breaks or "breaches" the agreement, you may need to start the whole process over again (personal negotiation, writing a demand letter filing a lawsuit, etc.)
  • 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 no agreement is reached 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 other party, 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 other party 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 other party agree beforehand that it isn't binding. This means that it can be enforced by the arbitrator and, if necessary, the courts, if either of you don't follow the decision
  • After going through arbitration, you can't file a lawsuit in a Virginia small claims court
  • Arbitration can be expensive. An arbitrator may charge over $125 for a four-hour block of time to listen to and decide your case. But, if you win, the costs of arbitration are usually added to the amount the defendant owes you

As with mediation, you and the other party have to agree to arbitration. However, you both also have to agree on the arbitrator. The clerk of the district court in your area 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 to 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? Will the lawsuit and the court fees cost me less than an arbitrator?
Related Resources on Lawyers.comsm

- Start the process with our Virginia Small Claims Worksheet
- Next in the Small Claims series: What is Small Claims Court in Virginia?
- Success in Small Claims Court
- Small Claims Court Terms
- Defending a Small Claims Case
- Visit our Small Claims Court Forum for more help.

Related Web Links

- Virginia's Judiciary
- Virginia Mediation Network

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