Small Claims Legislation Scarred as it Heads for House Action

The national Chamber of Commerce feels no shame when it comes to damaging consumer rights and interests.

Knowing that the public may view their anti-consumer extremism with increasing concern, the chamber has jumped on the bandwagon behind a modest congressional bill to help small claims courts. The heartless lobbyists at the chamber wanted to gain some credit for the bill and weaken it at the same time.

A little background is necessary. In the early 1970s Senator John Tunney conducted public hearings where it was shown how difficult it was for citizens to have access to the courts. Prohibitive costs, cumbersome procedures and other obstacles were effectively shutting many Americans out of their own courts.

One proposal that emerged from these hearings was to establish a small claims court improvement program. The program would include a research center to assemble or develop the best ideas on how communities can resolve small consumer disputes such as those between landlord and tenant, and motorist and dealer. Thus the Consumer Controversies Resolution Act was introduced in the legislative hopper and promptly ignored. Several years passed and the bill did not move forward.

This year, the bill passed the Senate without objection under a unanimous consent procedure. But it bore the erosions imposed up it by the Chamber of Commerce. Since the House of Representatives now is taking the bill up for consideration, it is timely to point out some weaknesses of the Senate version.

The Senate bill provides for $15 million in grants to the small claims court function. Against the fact of millions of unresolved consumer complaints annually in this country, this sum is seriously inadequate. The costs of these complaints to Americans are vastly greater than what a reasonable grant program to help expand the small claims practice would cost.

Also, what started out as a program to help resolve consumer disputes came out as a program to help resolve neighborhood controversies as well. Dilution results. The Law Enforcement Assistance Administration budget can more than provide for the neighborhood dispute program without its climbing on the back of a tiny consumer dispute bill.

The Chamber of Commerce demanded that no small claims courts can receive help under the bill unless business can use these courts along with consumers. Presently, a dozen states prohibit or limit the use of small claims courts by business plaintiffs.

New York excludes corporations, associations, insurees and assignees altogether. Under the Senate bill, these states either must change their law or be excluded from its assistance provisions. Here is the chamber, usually an opponent of federal laws that dictate to the states, coming out to insist on just that.

In states where small claims courts can be used by businesses, the “people’s courts,” as Harvard Law Dean Roscoe Pound described them years ago, degenerate into collection agencies.

Businesses have resources to pursue their remedies in other forums without crowding out consumers in small claims courts.

A study produced by the Connecticut Public Interest Research Group showed that in one recent five-month period, 83 percent of all cases filed in Hartford (Conn.) small claims court involved corporate plaintiffs. A survey of Washington, D.C., small claims court revealed that corporations filed 2200 of 2900 cases in June 1972.

It should not be difficult to improve rapidly small claims court accessibility. Where progress already has occurred, small claims courts are open in the evening or on Saturdays and non-lawyer advisers help consumers with the simple procedures. California prohibits lawyers from practicing in small claims courts to keep them simple and faster-paced.

The House of Representatives should not accept the Senate bill but instead should make its own imprint. One of these additions would be to provide consumers with key advisory roles to make sure that consumer interests are paramount when grants and other initiatives are undertaken.

The Chamber of Commerce may not like this and may indeed oppose such provisions; if so, it will at least gain in consistency what it loses in its game of false pretense.

Note: A free copy of a directory listing toll-free government hotlines for consumers is available from Public Citizen, PO Box 10904, Washington, D.C. Be sure to include a large self-addressed, stamped envelope.