For many individuals and businesses, the value of a dispute is often far exceeded by the time, cost and complexity of pursuing it through the ordinary Civil Courts. Recognising this, Sri Lanka introduced a dedicated forum for the swift and inexpensive resolution of lower-value civil disputes — the Small Claims Court. 

Established through the Small Claims Courts’ Procedure Act, No. 33 of 2022, read together with the Judicature (Amendment) Act, No. 34 of 2022, this reform forms part of a wider effort to modernise the civil justice system, reduce the chronic backlog in the District Courts and improve access to justice for ordinary litigants.

This article provides an overview of the Small Claims Court — its jurisdiction, the types of claims it may entertain, its streamlined procedure, and the practical considerations that parties should bear in mind when deciding whether to invoke it.

1. The Legislative Framework

The Small Claims Court is not a wholly separate institution with its own premises and Judges. Under the amended Judicature Act, a District Court is deemed to be a “Small Claims Court” when exercising the jurisdiction vested in it as such and the District Judge sits as the Judge of the Small Claims Court. The framework rests on two complementary enactments:

• the Judicature (Amendment) Act, No. 34 of 2022, which created the Court by inserting a new Chapter V A and section 29 A into the Judicature Act, and introduced a new Seventh Schedule setting out the categories of claims that fall within its jurisdiction; and

• the Small Claims Courts’ Procedure Act, No. 33 of 2022, which prescribes the special, simplified procedure to be followed in the conduct of such actions.

2. Jurisdiction and the Monetary Threshold

The defining feature of the Small Claims Court is its pecuniary limit. Under section 29 A of the Judicature Act, the actions specified in the Seventh Schedule must not exceed Rupees Two Million (Rs. 2,000,000), excluding interest. By Order published in Gazette Extraordinary No. 2328/16 of 21st April 2023, the threshold was raised from the original sum of Rupees One Million Five Hundred Thousand (Rs. 1,500,000.00) to Rupees Two Million (Rs. 2,000,000.00) (excluding interest).

A “small claim” is defined as a debt, damage or demand referred to in the Seventh Schedule which does not exceed the prescribed sum. The categories of claim falling within the Seventh Schedule broadly include matters such as the recovery of money, liquidated (liquid) claims, the recovery of movable property and certain claims in delict (tort), among others enumerated in the Schedule.

Two practical points on invoking the jurisdiction are worth noting:

a) Abandonment of the excess 

A Plaintiff whose claim exceeds the threshold may nonetheless bring the action within the jurisdiction of the Small Claims Court by abandoning or relinquishing the part of the claim above the limit, provided an averment to that effect is included in the Plaint. The balance so abandoned cannot later be recovered.

b) Joinder of causes of action

A Plaintiff may join two or more causes of action arising out of the same act or transaction between the same parties, provided the value of each cause of action does not exceed the prescribed sum.

The jurisdiction is not unlimited. The Small Claims Court has no jurisdiction to hear actions filed under Chapter LIII of the Civil Procedure Code, or actions for the recovery of money for which special provision is made under any other written law, even where the value of the cause of action falls below the threshold. Careful attention must therefore be paid to whether a claim, though modest in value, is nonetheless one that must be pursued in another forum.

3. The Simplified Procedure

The Small Claims Courts’ Procedure Act, No. 33 of 2022 lays down a streamlined process that departs from the full rigour of ordinary civil procedure. Its salient features include the following:

3.1 Institution of the action

An action is instituted by presenting or transmitting to the appropriate Small Claims Court a duly stamped written Plaint in the prescribed form (Form No. 1 in the Schedule to the Act), filed within the local limits of the relevant judicial division. 

The Plaint must contain the particulars required under section 40 and 46 of the Civil Procedure Code, and the Court thereafter issues summons in the prescribed form.

3.2. Answer and Replication

The pleadings in a Small Claims Court are confined to the Plaint, the Answer and the Replication. If the Defendant does not admit the Plaintiff’s claim, the Defendant must file a duly stamped written Answer setting out the Defendant’s defence and any Claim in Reconvention (Counterclaim). 

A Replication is permitted only where there is a Claim in Reconvention; where there is none, there are no further pleadings beyond the Answer.

3.3 Settlement following the pleadings

The Act places settlement at the center of the process. On the filing of the Answer (and the Replication, if any), the Small Claims Court must forthwith fix a date for settlement within four (04) weeks from the completion of pleadings. 

Before the case is fixed for Trial, it is the express duty of the Court to persuade the parties to arrive at a settlement of the dispute, and to record any settlement reached and enter Judgment and Decree accordingly. 

3.4 Trial and the absence of a Pre-Trial stage

If the case cannot be settled, the Court fixes the matter for Trial, and the provisions of the Civil Procedure Code apply to the Trial in so far as they are not inconsistent with the Act. 

Significantly, the Pre-Trial procedure under Chapter XVIIA of the Civil Procedure Code does not apply to Small Claims Court proceedings, thereby removing a stage that frequently adds delay in ordinary civil litigation. 

3.5 Transfer where the wrong Court is chosen

If an action is instituted in a District Court or a Small Claims Court that lacks jurisdiction, Section 47 of the Civil Procedure Code applies and the Plaint may be returned. Significantly, where the Plaint is so returned, the period between the institution of the action and the return of the Plaint is excluded in computing the period of prescription — protecting a litigant who has, in good faith, filed in the wrong forum from losing the claim by lapse of time.

4. Timelines and Appeals

A central objective of the reform is the timely disposal of claims. The Court must make every effort to conclude the proceedings within eighteen (18) months from the commencement of such proceedings. 

An appeal lies to the Provincial High Court established under Article 154P of the Constitution, and any application for leave to appeal or final appeal must be heard and concluded within twelve (12) months from the making of the application or appeal, so that the promise of a “small claims” process is not undone at the appellate stage. 

5. Practical Considerations for Litigants

Before invoking the Small Claims Court, a prospective litigant should consider the following:

a) Does the claim fall within the Seventh Schedule categories, and is it within the prescribed monetary threshold?

b) Is the claim expressly excluded under Chapter LIII of the Civil Procedure Code or claims governed by special recovery statutes, such that it must be pursued elsewhere?

c) If the claim exceeds the threshold, is it commercially sensible to abandon the excess in order to obtain a faster and cheaper resolution?

d) What is the strength of the available documentary evidence, given the document-driven and summary nature of the procedure?

6. Conclusion

The Small Claims Court offers a simplified, cost-effective and expeditious route for the recovery of modest claims, it has the potential to make justice genuinely accessible for disputes that would otherwise be uneconomical to pursue, while relieving pressure on the District Courts. Its ultimate success will depend on effective operationalization, the designation and resourcing of Courts, the clarity of the applicable rules and consistent judicial case management.