In 1630, the Court of the Marshalsea and Verge was replaced in part by the Palace Court due to doubts about the jurisdiction of the Court of the Verge, established in 1611 and attached to the ancient Court of the Marshalsea of the King's Household. The Palace Court, or Curia Palatii was set up for the trial of personal pleas and actions arising within 12 miles of the palace of Westminster which did not fall within the jurisdiction of the city of London or other liberties.
Under the Inferior Courts Act of 1623 defendants were prevented from removing any action for damages stated to be £5 or below to a superior court under a writ of habeas corpus, but not from removing those above that figure. The figure of £5 was raised to £10 by the Frivolous Arrests Act 1725 and to £20 by the Imprisonment for Debt Act 1827.
The Palace Court in practice came to deal mainly with suits for the recovery of small debts its area ranging between its lower limit, 40 shillings, and that figure. Its juries were selected from Westminster and the four counties adjoining London; Middlesex, Essex, Kent and Surrey. The presiding judges were nominally the steward and marshal of the Household and the steward of the Palace Court or his deputy. The treasurer and controller of the Household could also sit as judges. The business of the court was a monopoly in the hands of four counsel and six attorneys.
From the beginning the court sat in Southwark, in Surrey but within the verge of the household, but during the civil war the king's court was away from Westminster at Oxford. On 20 March 1644/45 the Committee for Sequestrations for Surrey, sitting at Kingston upon Thames, appointed two new pleaders for the Palace Court to replace two royalists who had deserted the court two years previously, so it had evidently continued to sit at Southwark despite the absence of the king's court from Westminster.
Up to 1649 the Marshalsea Court continued to hear actions arising within the verge between royal servants, sharing the same court room as the Palace Court. With the execution of Charles I in 1649 the courts held by his officers lapsed. The Palace Court was abolished by Parliament in 1651 following complaints from the city of London, and probably ceased to exist despite petitions in 1654 to have it reinstated.
Restored by July 1660, the court's legality was again challenged in 1663/64 before Charles II issued new letters patent in support of it on 4 October 1664. When it was the re-established, it became known as the Palace Court or Marshalsea although the latter's proceedings were nominal and actions involving crown servants came to be heard by the Board of Green Cloth.
In the eighteenth century the Palace Court continued merely to be a court for the recovery of small claims, any important cases happening to come before it being rapidly removed into a higher court. The court moved to Scotland Yard, Westminster early in the 19th century. Long before its abolition with effect from the end of 1849, under the County Courts Act of that year, and following the establishment of County Courts in 1846, the court had ceased to hear more than a handful of pleas. From 1850 actions and suits then depending in the court passed to the County Court for the district in which the defendant then resided, or, if the debt or damages exceeded £20, to the Court of Common Pleas.