They also discussed how to make sure cases are assigned to the Commercial Division as early as possible, rather than at the motion to dismiss or summary judgment stage, which the panelists agreed was important. The taskforce proposed a rule that a party must ask to have a case assigned to the Commercial Division within 90 days, a measure the panelists supported.
"If you snooze, you lose," Borger said. Sophisticated parties, he said, should be able to comply with that deadline.
Panelists also agreed that increasing the use of special masters, which are paid by parties, to handle pretrial matters like discovery disputes is key to streamlining litigation.
"In a complex case, the cost of a special master is probably worth it," Borger said.
"It will gain momentum when parties see benefits," Emerson said, adding that a special master could often resolve discovery disputes simply by asking parties what they think they need and why they need it early in the case.
Emerson also discussed the use of letter submissions as a way of dealing with pretrial matters, though she cautioned against allowing them to become motions in disguise.
"The perfect letter submission should not have any adjectives in it," she said.
The panel also discussed expediting pretrial proceedings by having parties meet early and agreeing on electronic discovery and depositions. Giuffra suggested a rule that parties must have a preliminary conference within a certain number of days of the commencement of an action, using standard forms to answer key questions: what the major issues are, what dispositive motions could be filed, what kind of discovery will be needed.
Finally, the panel turned to the question of using mediation early on. The taskforce report included a proposal for a pilot program that would send randomly chosen cases to mandatory mediation. The panelists agreed that mediation could be beneficial, though they acknowledged that some litigants might resist. Parties that are "not sophisticated and practical" might want to push ahead with trial, Borger said.
Kaye summed up the panel as an effort at moving from ideas to execution.
"These are great ideas, and they need a more structured implementation," she said.
The second panel, "Financial Crisis Litigation in the Commercial Division and Federal Courts," examined the effects of the explosion of litigation in New York's state and federal courts following the financial collapse of 2008. It was moderated by Benjamin Nagin, a partner at Sidley Austin.
The other panelists were Manhattan Supreme Court Justice Shirley Kornreich (See Profile), who sits on the Commercial Division; Southern District Judge Victor Marrero (See Profile); James Gange, chief compliance officer of hedge fund manager Davidson Kempner Capital Management; J. Kevin McCarthy, deputy general counsel at BNY Mellon; and Dechert partner Hector Gonzalez.
A major theme that emerged was that New York courts have been inundated by lawsuits between large financial entities fighting over extremely complex investment instruments, and that these cases have created new law with uncertain consequences.
"These cases are being litigated without looking to the future," Kornreich said. Plaintiffs "are going all out, to go to trial with these cases, and they're creating new law… The plaintiffs, who will be defendants in the future, aren't thinking about the precedent."
In particular, she said, the post-crisis wave of litigation has created a precedent of contract claims proceeding alongside fraud claims based on the same case.
"It's really duplicative, but I can't throw it out because the law says that it can be," Kornreich said. "At least when I've said otherwise, I've been reversed."
Marrero said he had seen the same thing in federal court.
This precedent, Kornreich said, "may well cause a lot of uncertainty for the transactional bar."
The panel also discussed the logistics of dealing with multiple actions arising from the same facts. For example, a fraud allegation could give rise to a civil suit by the Securities and Exchange Commission, a private shareholder suit and criminal charges. Both Kornreich and Marrero advocated that judges coordinate with one another as much as possible.
Finally, Kornreich returned to themes raised by the first panel: the importance of getting parties into the Commercial Division early, and getting them to meet with each other early.
She said that she and other judges had already begun individually requiring parties to meet, and that the results were promising.
"It's really become much smoother," she said.
@|Brendan Pierson can be contacted at email@example.com.