New York State Commercial Division: A Focus On ADR

Tuesday, August 1, 2006 - 00:00

The Honorable Judith S. Kaye

The Commercial Division of the Supreme Court of the State of New York, having passed its tenth anniversary, has been featured in these pages several times, with Alternative Dispute Resolution among its many benefits. This article will not again recount the Division's history, or its great success - until the last paragraphs. Instead, I want to share news of our newest Commercial Division venture.

In recent months, the New York State court system borrowed a page from the private sector and conducted Commercial Division Focus Groups in several counties - Albany, Monroe, Nassau, New York and Onondaga. We wanted to hear from our users in frank exchanges. Although a full report will be released shortly, this issue of The Metropolitan Corporate Counsel with its ADR theme seemed like the perfect occasion to preview the Focus Groups' insights, particularly on the subject of ADR in pending litigation.

First, a little background on the Focus Groups themselves. Chief Administrative Judge Jonathan Lippman's invitations ensured that sessions would be balanced among experienced commercial litigators, in-house counsel for major corporations, and judges. The discussions were led by New York City attorney Robert Haig, were limited to 12-18 participants each and followed a comprehensive agenda. Incidentally, to encourage candor, the Focus Group discussions were recorded, but speakers' identities were kept confidential.

I am happy to say that none of our initial fears - that few would take the time to attend, or lawyers' comments would be inhibited by the presence of judges, or judges would dominate the discussion, or the gatherings would become gripe sessions rather than constructive exchanges - came to pass. Instead, we heard many interesting ideas and suggestions, and attendees thanked us for the invitation. We will definitely do more of this in the future.

Judges As Settlement Facilitators

In the Commercial Division, judges have been involved in facilitating settlements both directly and indirectly using ADR techniques. Many of the lawyers and their corporate clients in the Focus Groups favored having Commercial Division judges involved in settlement efforts. They thought it made a big difference in outcome - and at minimum served as a catalyst for further discussions and ultimate resolution between the parties. Statewide Uniform Rules of the Commercial Division - long urged by the Bar - were promulgated in December 2005, effective January 17, 2006, while the Focus Group program was already underway.1 Uniform Rule 30 provides that the judge may schedule a settlement conference after the close of discovery or when the case is certified as ready for trial.

Some Focus Group participants were concerned about involving the judge in settlement when a bench trial is contemplated. To address this, they proposed that the courts make a form available so the parties can initiate the judge's involvement in settlement and agree that it will not be a basis for a future recusal motion. Another suggestion was that some cases could benefit from settlement talks through referrals to court attorney referees, Judicial Hearing Officers, other judges from the same court, or through a roster of mediators. Indeed, Commercial Division justices throughout the State have been using those resources, to varying degrees, for some time. We will do more of this.

ADR Under The Uniform Rules

ADR specifically is addressed in the Uniform Rules. Rule 8 requires that, prior to a preliminary or compliance conference, all parties are to consult about a number of issues, including "the use of alternative dispute resolution to resolve all or some issues in the litigation." Rule 3 provides that the court may order, or counsel may seek, an uncompensated mediator at any stage in the case to resolve some or all of the issues. These mediators are lawyers trained in mediating commercial matters who have volunteered their time to the Commercial Division. We are, of course, most grateful for their pro bono mediation services.

Participants in the Focus Group in New York County, where the essence of Rule 3 had been the practice for some time, gave their views on their experience with this program. Participants from other counties, who applauded the announcement of the Uniform Rules generally, shared their experiences with ADR in or outside the New York courts.

Participants suggested that the presence of the corporate executive responsible for approving the legal bills be required at mediation; that each party be prepared to make a major "move" instead of viewing mediation as an occasion to convince the other side of the weaknesses in their case; and that mediation take place early in the litigation. They noted that even failed mediations can be the beginning of a useful dialogue between business people on each side. On the other hand, participants also acknowledged that forced mediation is ineffective with parties who are not ready for it or are unwilling to participate in good faith. Then too, preparing for mediation can be costly in a large, complex case.

One useful suggestion was for all Commercial Division justices to have a list of volunteer mediators in alphabetical order with detailed background information such as bar admissions, education and professional experience. Such a "user friendly" list would greatly assist in choosing the right mediator for a given case. Another suggestion was to permit the parties, rather than the judge, to choose the mediator.

Some proposed encouraging the parties to agree in advance that, after a specified amount of volunteer services, the parties would compensate the mediator jointly if they wished to extend the mediation process. Some who thought that expressing in open court the desire to mediate could give the appearance of weakness proposed developing an anonymous method for parties to declare their interest in mediation. Others suggested limiting mandatory mediation to certain categories of cases (for example, promissory notes) or monetary limits (such as cases involving ad damnum clauses below a specified sum). Finally, it was proposed that the bar provide feedback to the courts so that ineffective mediators are removed from the roster.

We will now be following up on each of these suggestions, and welcome additional views from your readers.

Other Aspects Of The Focus Groups

The Commercial Division Focus Groups were designed to elicit suggestions for improving the Commercial Division as well as for identifying practices that could be beneficially transplanted elsewhere in the court system.

Subjects that the Focus Groups considered and discussed included: instituting a notice requirement for temporary restraining order applications; addressing electronic discovery issues early in the case; supporting the use of technology at trial; using hands-on but flexible case management techniques; giving the court discretion to require a separate "statement of material facts not in dispute" on motions for summary judgment; instituting page limitations on motions; welcoming more in limine motions; encouraging more e-filing; using pre-motion conferences for discovery motions; lifting the current limitations on expert discovery in New York State courts; and developing online scheduling orders.

Concluding Thoughts

While we are still digesting those suggestions of the Commercial Division Focus Groups and awaiting the final report, two things are clear. The first is that well-run Focus Groups are indeed an effective information-gathering tool for the courts. And second, the Commercial Division continues to be viewed as a great success by the business community, and as a great source of innovation for the court system.

From its inception, the Commercial Division has been an ongoing collaboration with the Bar. The Focus Groups continue our tradition of seeking input from our users, another way of assuring that the Division remains a forum of choice for commercial cases.

1 Uniform Rules for New York State Trial Courts, Rule 202.70 (Rules of the Commercial Division of the Supreme Court), available at

The Hon. Judith S. Kaye is Chief Judge of the State of New York.