New York Commercial Division Rules Amended to Include Neutral Evaluators

On October 19, 2021, Chief Administrative Judge Lawrence K. Marks ordered amendments to Commercial Division Rule 3(a) governing ADR. This is the third change to the New York Commercial Division Rules since October 4, 2021. This in addition to two notices of proposed rule changes issued in September 2021.  Amended Rule 3(a) takes effect on December 20, 2021. A copy of Judge Marks’ Order, including the new rule’s text, can be found here.

The changes are brief, but significant.  The first sentence adds the phrase “or neutral evaluator” and substitutes “helping to achieve” for the word “mediating” as follows: “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.”

Similarly, Rule 3(a)’s second sentence adds “or neutral evaluator” as follows: “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.”

In a June 9, 2020 memorandum, the Commercial Division Advisory Council provides an Overview explaining these rule changes.  The full memorandum can be found here.

The Overview states:

The Commercial Division Advisory Council proposes that Commercial Division Rule 3(a) be modified to permit the use of neutral evaluation as an ADR mechanism and to allow for the inclusion of neutral evaluators in rosters of court-approved neutrals. The Council believes that this rule modification 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 describes qualification guidelines for both mediators and neutral evaluators, and will help address the need for expanded alternative dispute resolution (ADR) services as the court system pursues expansion of presumptive ADR, particularly in light of the additional challenges posed by the coronavirus pandemic. The Commercial Division Advisory Council also believes that providing this additional alternative will not only provide more options to the businesses that rely on the Commercial Division for their disputes, but will also allow a greater number of experienced business litigators to offer their services to support the business community and court system. Finally, the field of alternative dispute resolution has suffered from a historical lack of diversity. The Council believes that by permitting attorneys to serve on court rosters as neutral evaluators (which requires six hours of training instead of the forty hours required for mediators), a broader range of attorneys will be able to balance the training requirements with their other professional obligations.

A general discussion of the differences between mediators and neutral evaluators in the business court context can be found in the article Getting to Yes in Specialized Business Courts: The Unique Role of ADR in Business Court Cases, by the Honorable Ben F. Tennille, Lee Applebaum and Professor Anne Tucker, a copy of which can be found here.

Our thanks again to business courts pioneer Robert Haig, of Kelly Drye, for bringing this development to our attention.