Commercial Division in New York County Supreme Court Launches Mandatory Mediation Pilot Project

Commercial Division in New York County Supreme Court Launches Mandatory Mediation Pilot Project by Bart Eagle{Read in 4:30 minutes} Mediation is an alternative dispute resolution (ADR) process in which adversarial parties engage in a negotiation with the goal of trying to arrive at a settlement acceptable to both sides.

Mediation, at its most simplified, is a facilitated negotiation with a trained neutral mediator, who helps the parties identify and address the issues in dispute and helps them arrive at a mutually acceptable resolution. The mediator does not make decisions or issue rulings and the parties are free to choose to settle or not to settle. In fact, they can settle all of a case or only part of a case.

When successful, mediation can provide parties with a far less costly and more efficient way to resolve disputes than through extended litigation or by proceeding to trial. Further, mediation provides an opportunity for parties to eliminate the uncertainty and risk of leaving a decision to a third party – a judge or jury.

The Commercial Division in New York County Supreme Court has long had a mediation program available whereby parties could request, or judges direct, parties to mediation. However, in an order dated June 23, 2014, the court has gone further, establishing a pilot program whereby every fifth case filed in the Commercial Division is automatically referred to mediation.

There are only two exceptions: if all parties stipulate that the case is not suitable for mediation, or if the assigned judge exempts the case.

Some of the rules applicable to mediations that are part of the Pilot Project are the same or similar to those applicable to cases that had been, or will be in the future, assigned to mediation by the individual Commercial Division judges, yet some are different. With respect to the cases that are part of the Pilot Project, within 120 days after the filing of a Request for Judicial Intervention, the parties must inform the court’s ADR coordinator if they have agreed on a mediator, who may, but does not have to be, on the court’s roster of qualified neutrals; if they have not agreed on a mediator, the ADR coordinator will propose, and ultimately appoint, a mediator from the panel to handle the case. The first session of mediation must take place no later than 30 days from the date that the assignment of the mediator is confirmed.

As in all Commercial Division mediations, the the first 4 hours of mediation are without charge to the parties. Also, all parties and their attorneys are required to attend the mediation session. If a party is a company, there has to be someone present who is familiar with the case and is empowered to settle the matter.

Even though cases may be assigned to mediation early on, before the parties have completed discovery, the parties and mediator may agree on a quick exchange of critical documents needed to accurately assess the strengths and weaknesses of the case within the context of the mediation – documents that would have to be provided in discovery, anyway – to enable the parties to meaningfully address settlement.

As the Commercial Division’s Pilot Program demonstrates, court-annexed mandatory mediation is increasingly becoming a part of the litigation landscape. Accordingly, parties in dispute, and their counsel, would be well-served to consider the opportunities that mediation provides, and its effective use, when deciding to proceed to litigation.

Footnotes:
The Commercial Division Alternative Dispute Resolution Program (Rule 3 of the Commercial Division (Uniform Rule 202.70(g))).
Commercial Division judges can still refer cases to mediation that were not assigned to mediation as part of the Pilot Program.
The Southern District of New York (Local Rules 83.9), Eastern District of New York (Local Rule 83.8) and United States Court of Appeals for the Second Circuit (Local Rule 33.1) all have mandatory mediation programs.

 

Bart J. Eagle
Attorney & Mediator
www.barteaglelaw.com
1700 Broadway, 41st Floor
New York, New York 10019
(212) 586-0052

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