As we previously reported (here), the New York Supreme Court Commercial Division (a Manhattan-based division of the state court of first instance that exclusively hears complex commercial cases) has been considering a proposal for mandatory mediation.
The proposal has now been adopted and the 18 month pilot programme becomes effective on 28 July 2014, at which time one in every five cases filed in the Commercial Division will be subject to mandatory mediation.
Under the programme, the parties must agree on a mediator or request that the ADR Coordinator assign a mediator no later than 120 days after the filing of a request for judicial intervention (“RJI”), which is the procedural step for requesting the assignment of a judge to a case. In the latter case, the parties may then either agree on a mediator or rank preferred mediators within seven days. A party’s failure to act will result in the ADR Coordinator selecting a mediator without the party’s input.
Once a mediator is confirmed, the first mediation session must take place no later than 30 days from the confirmation date, and the mediation must be concluded within 45 days from the confirmation date. If all parties and the mediator believe that further mediation would be beneficial, the mediation may be extended for an additional 30 days, up to a deadline of 75 days from the confirmation date. The ADR Coordinator, upon request from the mediator and all parties, may extend the time to complete the mediation process up to 210 days from the filing of the RJI, without court intervention (the original proposal provided for mediation to conclude within 180 days of the RJI filing). Thereafter, court permission will be required for the mediation to proceed longer. Notably, the rules of the pilot programme permit the parties to extend mediation without court intervention for considerably longer periods of time than is permitted under the ordinary rules governing mediation in New York Supreme Court.
Although the pilot programme states that mediation is mandatory, all parties may opt out within 30 days of filing the RJI by stipulating that the case is not suitable for mediation. Additionally, mediation will not occur if the assigned judge exempts the case from mediation upon a showing of “good cause” by a party.
The pilot programme is said to be favoured by corporate counsel throughout New York State, who typically seek speedy resolution of commercial disputes in order to reduce litigation costs.