New York Commercial Division to Launch Accelerated Adjudication Option

On June 2, 2014, accelerated adjudication procedures will become available in the New York Supreme Court Commercial Division. These procedures are designed to offer an alternative to arbitration, and will be available on consent of the parties in all actions (except for class actions) in the Commercial Division. Parties can prospectively agree to resolve any dispute under these procedures by consenting to accelerated adjudication in their contracts.

New Rule 9 of section 202.70(g) of the Commercial Division Rules defines the new procedures, which are premised on the parties’ agreement to complete all pre-trial proceedings, including discovery, in nine months. Parties agreeing to accelerated adjudication consent to the exclusive jurisdiction of the Commercial Division and agree to waive their rights to a jury trial, interlocutory appeal, punitive or exemplary damages, and objections based on lack of personal jurisdiction or forum non-conveniens.

By selecting accelerated adjudication, parties also waive their right to traditional discovery and agree instead to proceed with limited document discovery and a small number of interrogatories, requests to admit, and depositions. Moreover, the procedures aim to limit the cost of electronic discovery. While the rule contains defined procedures, parties can modify them on agreement and the number of depositions can be enlarged with a showing of good cause.

These new accelerated adjudication procedures may be an appropriate and efficient means for resolving commercial disputes in certain instances and with respect to certain contracts. They offer limited discovery and an accelerated schedule, which are perceived advantages of arbitration. Unlike in an arbitration, however, parties preserve access to the procedural protections of the courts, including the ability to appeal a final judgment. In other instances, however, it may be appropriate to include an agreement to arbitrate or to preserve the ability to have a dispute resolved in a federal court.

The full text of Rule 9, including suggested contractual language to express the consent of the parties to the accelerated procedures, is available here.

If you have any questions or would like to discuss the relative benefits and costs of Rule 9, please contact any of your regular contacts at the firm or any of our partners and counsel listed under Litigation and Arbitration in the “Practices” section of the website.