May You Represent Your Corporation in a Small Claims Case Without a Lawyer?

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Illinois Supreme Court Rule 281 defines a small claim as “a civil action based on either tort or contract for money not in excess of $10,000, exclusive of interest and costs, or for the collection of taxes not in excess of that amount.”

A corporation might want to file a small claims suit as a plaintiff, or it might find itself named as a defendant in a small claims suit. Must the corporation hire a lawyer to properly appear in court in either of these instances? The answers are yes … and no … respectively.

Illinois Supreme Court Rule 282(b) reads in full:

“No corporation may appear as claimant, assignee, subrogee or counterclaimant in a small claims proceeding, unless represented by counsel. When the amount claimed does not exceed the jurisdictional limit for small claims, a corporation may defend as defendant any small claims proceeding in any court of this State through any officer, director, manager, department manager or supervisor of the corporation, as though such corporation were appearing in its proper person. For the purposes of this rule, the term ‘officer’ means the president, vice- president, registered agent or other person vested with the responsibility of managing the affairs of the corporation.”

Rule 282(b) is straightforward. A corporation may not file a small claims case as a plaintiff (i.e., as a claimant, assignee, subrogee or counterclaimant) without hiring a lawyer to represent it. But it may defend a small claims case acting through one of the officers or individuals identified in the Rule.

Confusion has arisen about these issues because of a section of the Illinois Code of Civil Procedure, a statute enacted by the Illinois General Assembly. That section … 2-416 … contradicts Rule 282(b) in several respects and purports to authorize a corporation to “prosecute as plaintiff or defend as defendant any small claims proceeding in any court of this State,” acting through one of the same officers or individuals identified in Rule 282(b). Courts have resolved this confusion by noting: “When a statute directly and irreconcilably conflicts with a supreme court rule on a matter within the court’s authority, the rule prevails.” Thus, Rule 282(b) trumps Section 2-416.

What is the consequence of a corporation appearing as a plaintiff in a small claims case without a lawyer, if this matter comes to the court’s attention, either in the trial court or on appeal, or in connection with the corporation’s attempt to collect a judgment? The answer is that all proceedings in the case will be declared null and void from the outset. Any judgment that was entered in the corporation’s favor will likewise be declared void and unenforceable. Moreover, if the corporation then hires a lawyer to re-file a proper suit, a statute of limitation may already have run or another time-sensitive period may have expired. In other words, all previous proceedings will have been a complete waste of time and money and the corporation may also have forfeited an otherwise viable claim. So don’t do it.

Remember, of course, that the ability of a corporation to “defend as defendant” without hiring a lawyer pursuant to Rule 282(b) is limited to small claims proceedings as defined in Rule 281. And remember also that, just because a corporation is not required to hire a lawyer in this narrow instance, it is not necessarily a good idea to proceed without a lawyer … but that issue is beyond the scope of this article.