New Amendment to ComDiv Rule 3(a) Provides More Options to Litigants Seeking Alternative Dispute Resolution

November 11, 2021

In recent years, the New York court system has endorsed alternative dispute resolution (“ADR”) as a way to increase efficiency in the court system, making ADR presumptive in most civil cases.  As a pioneer of efficiency, the Commercial Division has reinforced – through the adoption of multiple ADR-related rules and rule amendments – its “strong commitment to early case disposition” through ADR.

Consistent with this commitment, Commercial Division Rule 3(a) was recently amended to permit as an ADR mechanism the use of a “neutral evaluator” (as an alternative to a mediator), and to allow for the inclusion of “neutral evaluators” in rosters of court-approved neutrals.  The amendment, effective December 20, 2021, provides:

At any stage of the matter, the court may direct or counsel may seek the appointment of an uncompensated mediator or neutral evaluator for the purpose of helping to achieve a resolution of all or some of the issues presented in the litigation. Counsel are encouraged to work together to select a mediator or neutral evaluator that is mutually acceptable and may wish to consult any list of approved neutrals in the county where the case is pending . . . .

The amendment to Rule 3(a) will enable the Commercial Division to use the full range of ADR services contemplated by Part 146 of the Rules of the Chief Administrative Judge, which includes both mediators and neutral evaluators, and describes the qualification requirements for each.

Under Part 146.4, a lawyer or judge seeking qualification as a neutral evaluator must be admitted to practice for at least five years, and have at least five years of substantial experience in the specific subject area of the cases over which he or she will serve as a neutral.  In addition, the candidate must complete six hours of approved training in procedural and ethical matters related to neutral evaluation (as opposed to the 40-hour training requirement to become a mediator).  Once trained and certified, the neutral evaluator may be added to rosters of neutrals and selected by judges or parties to help facilitate the resolution of complex commercial matters, alongside the mediators already available.

The amendment to Rule 3(a) will help address the need for expanded ADR services as the New York court system continues to implement the presumptive ADR system, particularly in light of the many challenges posed by the COVID-19 pandemic.  As the Commercial Division Advisory Council (“CDAC”) explained in its proposal to amend Rule 3(a), given the recent initiatives to encourage ADR and the effects on litigation resulting from the COVID-19 pandemic, the rule change would permit attorneys and judges – some with just as much practical experience as current mediators – to become neutral evaluators without being required to undergo the more extensive training required of mediators.

The rule change may also increase diversity of court-approved neutrals.  According to the CDAC, the challenges posed by a 40-hour mediation training requirement may have a disproportionate impact on women and minorities, who may feel that taking time away from client work and business development could put their career prospects at risk.

The pro-ADR initiative continues to be a priority for the New York Court system, especially in the Commercial Division. Indeed, several Commercial Division Rules address ADR.  Rule 3, as discussed above, permits courts in the Commercial Division to direct the appointment of a mediator – and now a neutral evaluator – to facilitate the resolution of a case, and expressly encourages counsel to “work together to select a mediator” or neutral evaluator mutually acceptable to the parties.  Rule 10 requires counsel to certify that he or she has discussed with the client the availability of ADR mechanisms in the Commercial Division.  And, Rule 11 requires that preliminary conference orders contain specific provisions for means of early disposition of the case through ADR.

In addition to these Rules, many of the Commercial Division justices encourage parties to explore ADR.  For example, in New York County, Justice Borrok’s individual rules explain that “the parties are encouraged to identify as early as possible any case where ADR would be appropriate” and “write a joint letter to the Court asking to be referred to ADR.”  Likewise, in New York County, Justice Cohen’s and Justice Reed’s individual part rules require the parties to report prior to the status conference whether they have attempted the ADR process offered by the Court.  In Suffolk County, Justice Emerson’s individual part rules address the procedure for seeking ADR and provide a link for more information on the Court’s ADR program.  And, in Queens County, Justice Grays’ individual rules expressly authorize the Court to refer matters to the Commercial Division ADR program without the parties’ request or consent.

Takeaway:

The recent amendment to Rule 3(a) will undoubtedly help facilitate access to the ADR programs already encouraged by the New York court system and Commercial Division justices.  By adding neutral evaluators to rosters of neutrals, the Commercial Division will enhance the options and solutions it provides to businesses that choose to bring their cases to New York courts, providing more diversity and experience in its neutrals and more types of ADR mechanisms.  This is especially true as litigants determine how to advance their cases in the aftermath of the COVID-19 pandemic.