A New York State report on reforming litigation has at its heart a mandatory mediation pilot for commercial cases. It is anticipated that 20% of the cases filed in the Commercial Division of the New York Supreme Court (which is the state’s trial court) will be sent to automatic mediation. A task force led by senior counsel at leading US firms has been meeting over the past six months to see how the Commercial Division can maintain its position as a world-class court system in the face of increased demand and reduced resources.

After obtaining the views of in-house counsel and reviewing the position in other jurisdictions, the task force concluded that mandatory mediation in commercial disputes helped resolve disputes in a cost-effective, fair and efficient way. The proposals would supplant referrals to mediation under Rule 3 of the Uniform Rules of the Commercial Division.  The task force recommends that every fifth newly assigned case to the Commercial Division would be required to be mediated within 180 days of assignment to a Commercial Division Justice unless (a) all parties stipulated that they did not want the case to be mediated or (b) a party made a showing of “good cause” as to why mediation would be ineffective or otherwise unjust. The ‘random selection’ aspect is thus mitigated by the ability of the parties to veto the referral, either together, or if one party can show good cause. Where parties proceed to mediation, the report proposes the creation of an ADR Administrator to assist with mediator selection and the mediation process within prescribed timescales. The report proposes early settlement related discovery procedures to aid the mediation process.

Where disputes are litigated, the report also recommends the use of an optional accelerated adjudication procedure, placing limits on document demands, interrogatories and depositions.

The report’s recommendations could substantially change the role of ADR within the user community. However, it is unclear when these proposals will be implemented in the light of the very severe budgetary restraints in place. It is encouraging, though, that the report sees ADR as the key to ensuring New York State “retains its role as the preeminent financial and commercial center of the world.”