Will NY Business Litigation Enjoy Life in the Fast Lane?

Business lawsuits can take months and sometimes years to litigate. While the legal process unfolds, companies lose both time and money.

To alleviate the economic burden, courts around the country have initiated programs to “fast track” business litigation. In New York, new accelerated adjudication procedures in the Commercial Division of the Supreme Court promise commercial cases involving damages of at least $150,000 will be ready for trial in nine months or less. 

While the expedited timeline is certainly appealing, it does come with certain caveats. Parties who consent to participate in an accelerated action are deemed to have irrevocably waived:

• Any objections based on lack of personal jurisdiction or the doctrine of forum non conveniens;
• The right to trial by jury;
• The right to recover punitive or exemplary damages; and
• The right to any interlocutory appeal.

The right to discovery is also limited under the new Rule 9 of the Rules of the Commercial Division. Unless the parties agree otherwise, discovery will consist of no more than seven interrogatories, five requests to admit, and, absent a showing of good cause, no more than seven discovery depositions per side to exceed no more than seven hours in length. Documents requested by the parties are limited to those “relevant to a claim or defense in the action and shall be restricted in terms of time frame, subject matter and persons or entities to which the requests pertain.”

In addition to agreeing to expedited procedures after the business litigation is filed, parties can also express their consent to this accelerated adjudication process ahead of time by using specific contract language. The rule provides the following model language:

“Subject to the requirements for a case to be heard in the Commercial Division, the parties agree to submit to the exclusive jurisdiction of the Commercial Division, New York State Supreme Court, and to the application of the Court’s accelerated procedures in connection with any dispute claim or controversy arising out of or relating to this agreement or the breach, termination, enforcement or validity thereof.”

The new accelerated adjudication procedures are an attractive alternative for many New York businesses, particularly when time is of the essence. However, it is important to carefully review your contracts to make sure you are a willing participant.

If you have any questions about the new program or would like to discuss your company’s business litigation, please contact me, Dan Brecher, or the Scarinci Hollenbeck attorney with whom you work.