An advisory committee has recommended that the New York Supreme Court (the state court of first instance located in Manhattan) adopt a pilot programme for mandatory mediation in its Commercial Division, which exclusively hears complex commercial cases.

While other New York courts have instituted limited mandatory mediation programmes (such as the Brooklyn programme about which we previously reported, which only applies to transit cases), this proposed programme is the most expansive to be considered to date.   Part of the rationale for proposing mandatory mediation in the Commercial Division is that mediation is underutilised there, and highly congested courts detract from New York’s stature as a desirable place to conduct business in an increasingly competitive global economy. 

The proposed programme would require one of every five newly filed cases in the Commercial Division to be mediated.  The mediation must conclude within 180 days of the case being assigned to a judge.  Parties may select their own mediator or may choose from the court’s list of neutral mediators.  Mediation would not occur if the parties opt out by mutual agreement, or if a party demonstrates “good cause” that mediation would be ineffective or unjust.

If the programme is implemented as proposed, it will have an 18 month term, during which the need for expansion, modification or even cancellation would be assessed.

The Commercial Division Advisory Council considered, but rejected, proposals to make mediation non-mandatory, to limit the types of cases subject to the mandatory proceedings, and to exempt cases in which a motion to dismiss is pending.  Other suggested but rejected requirements may have made mandatory mediation more appealing to litigants, such as a limited discovery process.  While the Advisory Council noted that limited discovery could facilitate mediation, drawbacks such as embroiling mediation in the same prolonged discovery disputes that tend to arise in litigation, lead the Advisory Council to reject any discovery requirement in the pilot programme at this time.

Read the full proposal here.