Mediation: An Attractive Alternative in the Commercial & Non-Commercial Division

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In one of my previous articles from June 2015,  I described a pilot mediation program launched that month by the Commercial Division of New York County Supreme Court to supplement its existing mediation program. That pilot program ended in late January of 2016; however, the Commercial Division has now launched a new pilot mediation program, as well as an expansion of the existing Commercial Division program.

The Commercial Division in New York County handles commercial cases that have a minimum claim of damages of $500,000, exclusive of interest, punitive damages and attorney’s fees (with a few exceptions).

As a result of the initial expansion of the existing mediation program, certain non-Commercial Division judges, who had commercial cases that were not assigned to the Commercial Division, could refer those matters to the mandatory mediation program.

For the most part, the difference between the commercial cases assigned to the Commercial Division and those not assigned to the Commercial Division is the amount in dispute. If less than $500,000, they would not be assigned to the Commercial Division and would not be subject to mediation. Of course, there is no practical or legal reason why a case with $500,000 in dispute could benefit from mediation but, say, a case with $499,000 in dispute could not. Moreover, it can be argued that commercial cases with significantly less money in disputee.g., $100,000, or lesscould benefit even more, since the cost of the litigation could comprise a significant percentage of the settlement value of the case.

New Pilot Program

Similarly, the new pilot program will apply to certain commercial cases that are not assigned to the Commercial Division, because they do not meet the required $500,000 threshold.  Those cases will now be referred to mandatory mediation.

This referral to mandatory mediation would happen as soon as a Request for Judicial Intervention seeking a preliminary conference in a case designated as a contract action is filed. The procedure that will be followed is simple: a preliminary conference will be held before one judge, who will conference all eligible cases, perhaps order very limited discovery that the parties may feel they need to meaningfully address settlement, and then automatically send the case to mediation. The Commercial Division ADR office can provide a mediator or the parties can secure mediation through private mediation providers such as the American Arbitration Association or JAMS.

If parties use the commercial division mediator assigned by the court, the first three hours of mediation will be free. After that, the mediator will be compensated at a rate of $350 per hour. If the parties select their own mediator from the panel, or a mediator from a private provider, compensation would be higher.

Mediation is a growing practice—parties are eager for a less expensive and swifter way to resolve disputes. The expansion of the existing ADR program and the new pilot program should greatly increase the number of cases sent to mediation. As mediation in commercial cases becomes more the rule than the exception, and will take place very early on in cases, parties should discuss with their attorneys how to best make use of mediation.

And, as I said in an earlier article, what do you really have to lose? At best, you may be able to find a quicker and cheaper resolution to your dispute;  at the very least, you will learn more about your own case—the strengths and weaknesses, through the eyes of a neutral third party, and about your opponent’s as well.

Contact me today with questions or comments.

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