New York Commercial Division Proposes Rule for Selection of a Settlement Judge”

Kelley Drye Client Advisory

Litigants in New York’s Commercial Division who are interested in having the ability to formally request settlement conferences with a settlement judge” other than the justice assigned to hear the case may soon be able to do so if the latest proposed rule from the Commercial Division’s Advisory Council is adopted.

On January 6, 2016, the Administration Board of New York’s Unified Court System published and sought the public comment of an amendment to the Commercial Division Rules (22 NYCRR 202.70(g)) proposed by the Advisory Council’s Subcommittee on Procedural Rules to Promote Efficient Case Resolution (“Subcommittee”).  The amendment states:

Rule __. Should counsel wish to proceed with a settlement conference before a justice other than the justice assigned to the case, counsel may jointly request that the assigned justice grant such a separate settlement conference. This request may be made at any time in the litigation. Such request will be granted in the discretion of the justice assigned to the case upon finding that (1) such a separate settlement conference would be beneficial to the parties and the court and would further the interests of justice; and (2) the justice who will conduct the conference has agreed to serve in that capacity.
According to a December 1, 2015 memorandum from the Subcommittee to the Advisory Council, the proposed rule was inspired by federal practice in which the bifurcated responsibility of district judges and magistrate judges allow parties to readily obtain a settlement conference between assigned magistrate judge rather than the district judge who will hear the case.” Proceeding before a settlement judge who is not assigned to hear the case, the Subcommittee reasoned, will allow parties to have a candid settlement conference with the judge, telegraph their weaknesses to the settlement judge and negotiate more freely. The proposed rule is ideal for those parties who do not want to telegraph their negotiating position to the trial judge or who believe that the trial judge could hinder the opportunity to obtain a favorable settlement by indicating that party’s weaknesses to the adversary, such as by proposing higher or lower settlement ranges than previously discussed. The amendment may also assist trial judges whose preference is not to get involved in settlement conferences with the parties litigating a dispute before them.

According to the Subcommittee, the proposed rule codifies a history of collaboration between judges in the Commercial Division, and elsewhere, whereby the trial judge will refer the case to a colleague for a settlement conference.  Notably, the proposed rule is not mandatory. Rather referral to a settlement judge” occurs only upon the consent of both the trial judge and the settlement judge. Helpfully, the parties may jointly” request a separate settlement conference before a settlement judge at any time in the litigation.” If adopted, the proposed rule, like many of the other rules changes to the Commercial Division proposed by the Advisory Council, is designed to make the Commercial Division more attractive and advantageous to litigants with business disputes.

Comments to the proposed rule are due by March 7, 2016 and can be emailed to rulecomments@​nycourts.​gov or mailed to John W. McConnell, Esq., Counsel, Office of Court Administration, 25 Beaver Street, 11th Floor, New York, NY 10004.

For more information on this advisory, please contact:

Nicholas J. Panarella
(212) 808-7889