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New Rules Provide for Expedited Handling of Commercial Disputes

09/04/2014 | Fall 2014 Newsletter
New rules in the Commercial Division of the New York Supreme Court allow parties to elect to engage in time-saving measures designed to make litigation more efficient and effective.  New Commercial Division Rule 9 creates a category called “accelerated adjudication actions” and special rules that provide accelerated procedures.

New rules in the Commercial Division of the New York Supreme Court allow parties to elect to engage in time-saving measures designed to make litigation more efficient and effective. Specifically, the new Commercial Division Rule 9 creates a category called “Acc elerated Adjudication Actions” and special rules that govern such actions.

The New York State Commercial Division courts are comprised of judges who are specifically assigned to handle commercial litigation matters involving claims exceeding a monetary threshold that differs by county, providing business litigants with a specialized forum to resolve complex commercial claims. The monetary threshold is $500,000 for New York County, and ranges from $50,000 to $200,000 for other counties.

In an Accelerated Adjudication Action (“AAA”), the litigants agree to engage in a streamlined litigation process, waiving challenges to certain jurisdictional and procedural rights such as the right to a jury trial, punitive damages, or interim appeals, and agree to limits on depositions and other discovery in order to reduce some of the time and expense associated with discovery in a typical commercial case. The parties to an AAA also agree to be ready for trial within nine months of the first request for judicial intervention in the case.

A party has various ways of availing itself of the accelerated procedures. The simplest way is to include a contract provision that requires any litigation relating to the transaction to be brought in the Commercial Division under the accelerated procedures set forth in Rule 9. The rule itself suggests the following 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.” Another way to initiate an AAA is for all parties to advise the court in writing that they consent to the application of the accelerated procedures.

While the cost savings of the accelerated procedures may prove beneficial in a variety of commercial cases, an attorney should be consulted with respect to the specific facts at issue in the contract or case in order to determine if AAA is appropriate in particular circumstances.

About the author: Pamela Gallagher is an associate at Gallet Dreyer & Berkey, LLP, where she practices civil litigation. Ms.Gallagher is the co-Chair of the Supreme Court Committee of the New York County Lawyers’ Association and a delegate to the New York State Bar Association’s House of Delegates. Ms. Gallagher can be reached at pg@gdblaw.com.