The pandemic has had a devastating impact on virtually all facets of life. Federal and state courts have had to adjust to the current crisis and many courts have limited their operations to only “emergency” matters. And as a result, it is much harder to bring commercial disputes to a swift resolution these days; in fact, in certain courts, there is a freeze in place on all commercial matters.
In New York County Supreme Court, for example, it appears that the court has purposefully adjusted its electronic court filing system to disallow the filing of new business related complaints. Although this development is unprecedented and presents many challenges, it does not mean that there are no alternative options for trying to resolve business disputes. Below are some options that business owners should consider during this time.
PENDING LITIGATIONS & DISCOVERY
If the case is already filed, it is quite likely that there is a delay in ongoing proceedings during this time. This sudden inactive period in court, however, does not mean that litigants cannot position to strengthen their positions in court to be ready when the case reactivates in court again.
Taking discovery (making document requests and seeking depositions) is one avenue that may be open at this time. It is definitely possible, especially if the attorneys agree, to continue to pursue such discovery mechanisms, even without a court order. At the very least, litigants can assert their rights to such discovery, without waiting for the court to schedule a particular time frame for discovery. Document productions can still occur now. Depositions can also take place, and can be done by videoconference, for example.
Individuals and companies involved in ongoing litigations can also prepare their cases for eventual adjudication by the court, whether a trial or some summary disposition motion (such as a motion to dismiss or summary judgment). The company’s internal witnesses and document productions can be prepared to be ready to go when the courts are open again to resolving business disputes. In large cases, there may be options in place for conducting mock trials to evaluate the cases, and assess further strategies for the future.
NEW CASES AND DISPUTES
In any war, preparation is key. The same is true for business litigation. We have previously written on the importance of drafting a strong complaint. See https://benaurlaw.com/importance-of-a-strong-complaint-in-civil-litigation/ The principles articulated in this article, such as the importance of proper due diligence and investigation of claims are fully applicable today. Companies and individuals are advised to do their own internal evaluation of the strength and weaknesses of their contemplated cases. With the help of experienced litigation counsel, a risk benefit analysis of prospective litigation should be conducted, including assessment of prospective costs and likelihood of success.
PRIVATE DISPUTE RESOLUTION, MEDIATION AND ARBITRATION
Court proceedings definitely add important pressure points for resolving cases. For example, many cases resolve “at the courthouse steps” before trial. The reason why 90% of business disputes resolve at this time, through private settlement, is because after a year or more of litigation (see https://benaurlaw.com/the-litigation-process-in-u-s-federal-district-court-the-typical-timeline-and-key-points/ ), litigants understand what exposure and risks they face, and what the likely outcome of their case will be, and reasonable business people often are able to find a compromise once they are fully informed of the facts, including the litigation process.
Private settlement is always an option, even without any litigation. Nothing stops people from resolving their cases themselves. In circumstances where people are willing to try it, and are not able to resolve cases by themselves, there may be the option of submitting the dispute to a private, confidential and non-binding mediation or even binding arbitration.
The bottom line is that the current freeze on cases in the courts, especially in New York, does NOT mean that nothing can be done to try to resolve business cases. Business owners faced with unresolved disputes are advised to evaluate their options with the aid of experienced business litigation counsel and maximize this time to both prepare their cases and position to resolve them through available alternative dispute resolution mechanisms.