1. Small claims = small awards. “Courts – particularly small claims courts – tend to side with consumers against travel providers,” says attorney Joshua Grimes. “This is true even when the company shows up to defend itself. Typically, the consumer is angry and emotional, as opposed to the cool demeanor presented by the corporate suits and their lawyer. In such circumstances, it is natural for the judges to be sympathetic to the consumer. However, it is also true that the judge’s award is very often significantly less than the amount that the consumer requested in his complaint.”
2. They probably won’t show up. Most courts require corporations to hire an attorney to defend any claims in excess of a threshold amount – usually about $1,500 – according to Grimes. “This makes it a poor business decision for the travel company to defend a small lawsuit, and pay the resulting attorney’s fees,” he says. “It is often cheaper to let the consumer get a judgment by default.”
3. Getting a judgment is easy – getting them to pay isn’t. Ted Maxwell, a retired electrical contractor, says he had a “drawer full” of small claim judgments that he could still not get paid. “One time, after being awarded another judgment, I asked the judge what value the paper was if I still could not get paid. This happened to be against a local accountant who I found out had a history of not paying his bills.” The solution was to show up at the accountant’s place of business with a sheriff, who threatened to auction off some of his office furniture unless he paid the fine. He did.
Maxwell is correct: it’s all in the execution. “Unless the defendant voluntarily pays a judgment, in many states the consumer can only collect if he executes on the judgment,” Grimes told me. “This involves locating the company’s bank accounts or other assets, and then filling out paperwork to get the local authorities to seize those assets. This is usually an expensive, bureaucratic, and time-consuming process. And, if a small travel company is involved or if the company is located outside the jurisdiction of the court, there may be no assets available. The consumer would then be left with a hollow victory and no money to show for his efforts.”
So what does all of this mean? “A voluntary settlement is almost always much better than going to court,” says Grimes. “Consumers need to consider up-front the time, effort, and expense they will incur in litigation, for a less than certain outcome. While travel providers can be bureaucratic and unreasonable, their settlement offers often look much more attractive once the consumer’s anger fades and they are faced with the realities of litigation.”
I second that. I usually recommend court as a last option – even if it’s becoming a popular first choice.