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Specialized Courts Continue to Take Hold

By Amy G. Doehring, Litigation News Associate Editor – August 14, 2009

More than 15 states now have implemented, or are currently considering, some type of court dedicated to resolving business cases or cases involving complex litigation.


Specialized business courts have their roots in the Delaware Court of Chancery, founded in 1792. Centuries later, in 1993, Illinois and New York created specialized courts to hear only commercial cases. Today, the success of these courts in Illinois and New York has spurred a nationwide trend toward creating specialized courts for the resolution of complex business matters.


Although the scope of each specialized court varies across jurisdictions, typically the specialized court has a specific set of judges assigned to hear complex commercial cases, with one judge handling each case from beginning to end.

Prior to implementing the specialized business court, many complex cases would be heard by multiple judges who had little experience or expertise in commercial cases.


“When judges do not hear cases from beginning to end, lawyers end up having to reeducate judges every time they go to court. That just doesn’t work in a complicated commercial case,” says Mitchell L. Bach, Philadelphia, former chair of the Business and Complex Litigation Committee of the ABA Section of Business Law.


Good For Business?
Many commentators agree that business courts are good for the lawyers and business litigants alike. Bach notes that “the benefits were immediate and obvious” when Philadelphia instituted a commercial court, where a single judge handles only business cases and follows the case from filing to trial.


“That doesn’t mean that the courts are good because you always win,” states Lee Applebaum, cochair of the Business Courts Subcommittee of the Section of Business Law’s Business and Corporate Litigation Committee.


“The greatest benefit is getting a judge who understands both the legal subject matter and who also understands the dynamics of how these sorts of cases are litigated,” explains Applebaum. As a result, “parties can be confident that even if they lose, they are getting a knowledgeable decision, which creates predictability and reliability in the quality of decision-making,” observes Applebaum.


“Predictability is the single biggest accomplishment of the business courts,” agrees Bach. “Lawyers now can better predict for their clients the progress, outcome, and cost of the litigation,” he says.


In addition, specialized business courts are noted for efficiency. “Judges often have smaller case loads, allowing them to put in the time needed for a complex business dispute,” notes Merrick L. Gross, cochair of the Section of Litigation’s Trial Evidence Committee.


“The cases stay with the same judge from filing through trial, and as a result judges take control over the case and exercise effective and efficient case management,” Gross observes.


Settlements are also positively influenced by these courts. “Where judges are more proactively involved in their cases, have a sophisticated knowledge of law, and understand the course and dynamics of business litigation, they can better gauge when to raise the issue of settlement and how to facilitate settlement talks,” says Applebaum.


Are They Elitist?
Some critics have called the courts elitist, complained that they take resources from the rest of the court, and that having the courts is unfair to consumers. Despite these criticisms, Bach notes that “no place that has implemented specialized business courts has discontinued them because they were not working well.”


“Because in a specialized business court complex cases are removed from the general docket, the entire docket moves more efficiently because resources in the general docket are freed up to address the cases there,” says Gross.


“There have always been specialized courts—whether criminal, family, bankruptcy. Complex commercial disputes were a similar area that cried out for a specialized court,” adds Bach.


Indeed, business courts likely will not fall out of fashion anytime soon. Rather, according to Applebaum, “these courts will become a norm in a successful economy. Economies need courts that reliably resolve disputes in a rational way so these businesses can get out of court and back to work.”


Keywords: specialized courts, complex litigation, business litigation


 

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