Alert: Delaware: America's Highly Ranked Court System Keeps Getting Better

In 2010, Delaware’s court system was ranked number one by Harris Interactive Inc.’s study conducted for the U.S. Chamber Institute for Legal Reform for the eighth year. Delaware’s judges were ranked as the most competent and impartial in the nation and Delaware’s overall treatment of tort and contract litigation was given top billing.

Superior Court  

Always striving to improve, the Delaware Superior Court recently announced the creation of a new complex commercial litigation division (“CCLD”) beginning on May 1, 2010.

Highly respected members of the Superior Court, Judges Jan R. Jurden, Joseph R. Slights III and Fred S. Silverman, have been assigned to hear CCLD cases.   Once a case is assigned to one of the three referenced judges, the assigned judge will handle all proceedings in relation to that matter through its final disposition.

Cases filed in the Superior Court that consist of a commercial dispute with over $1 million at issue will be automatically placed into the CCLD. The President Judge of the Superior Court can also designate cases for the CCLD. Finally, and perhaps most importantly, parties can choose to have disputes heard by the CCLD through the inclusion of exclusive choice of court provisions in deal documents and contracts. Cases within the CCLD do not forfeit the right to a jury trial; however parties have the option to agree to a bench trial.  

One of the draws of the new CCLD is enhanced predictability as each CCLD case will follow a consistent case management order that will include guidance on procedures such as discovery disputes, electronic discovery, protective orders, dispositive motions and alternative dispute resolution. This will enable attorneys to provide clients with specific guidance on the way cases will be managed and for parties and their counsel to work toward preparing for the next known challenge.  

Another major benefit of the CCLD is that these complex commercial disputes will be resolved promptly. Parties engaged in CCLD litigation will be given prompt trial dates and CCLD cases will be given priority over other non-CCLD trial assignments. These scheduling preferences, in conjunction with the assurance that the same Superior Court judge will keep the case through final disposition, will result in a timely trial with a judge who is intimately familiar with the facts of the case.  

The newly designed CCLD will result in what our clients want and need for their businesses: predictable, prompt, and cost-effective litigation.  

Court of Chancery

The Delaware Court of Chancery recently announced that it will provide alternative dispute resolution in qualifying cases. The Delaware Court of Chancery has long been known as a sophisticated forum in which to resolve disputes involving the internal affairs of Delaware business entities. Alternative dispute resolutions in the Delaware Court of Chancery, specifically mediation and arbitration, offer benefits such as experienced judicial officers leading negotiations and serving as decision-makers; cost-effective solutions; increased confidentiality and quick interventions. 

Mediation

In a mediation, a mediator assists the parties to attempt to resolve a dispute through compromise. Through a Delaware Court of Chancery mediation, a judge (who is not the presiding judge over the matter), special master, or Court appointee, will give input to the parties on the strengths and weaknesses of the case. Mediators from the Delaware Court of Chancery can assist with technology disputes and business disputes when the parties have consented and at least one party is a Delaware business entity. If the dispute involves solely monetary claims, the amount in controversy must be no less than $1 million.  

Mediations in the Court of Chancery are fast-tracked. In general, mediations will be held within 2 months of the date the petition to mediate was filed. Unlike litigation, there is no required discovery but the parties may agree to exchange documents. 

A major advantage to mediation is confidentiality. Mediation petitions are not made available to the public. Communications with the mediator are confidential. The parties can even agree to make any agreement reached as a result of the mediation confidential.  

The Court of Chancery has a proven track record in its mediations. Approximately 50% of the disputes that are mediated in this manner are resolved the day of the mediation, while an additional number of cases are settled within the weeks following the mediation. If the mediation is unsuccessful, the mediation will be terminated without prejudice to any party. 

Arbitration

In arbitration, the arbitrator resolves the dispute and issues a final and binding decision. A judge or master from the Delaware Court of Chancery can arbitrate business disputes when the parties have consented to the arbitration, one of the parties is a Delaware business entity, no party is a consumer and the amount of monetary claims are over $1 million.     

Like mediation, arbitration in the Delaware Court of Chancery permits the parties to obtain a resolution quickly so they can re-focus on their business. The arbitration is held within 3 months of the petition being filed. Generally, in Delaware Court of Chancery arbitrations, there is limited discovery. Moreover, the parties can agree no discovery is required. This can greatly reduce the cost of resolving a dispute. 

The arbitrator’s decision is final and the arbitrator may grant monetary or equitable relief. The arbitrator’s award can be appealed unless the parties waive the right to appeal. Arbitration proceedings are confidential, unless and until the arbitrator’s ruling is appealed to the Delaware Supreme Court.
 

RESOLVE YOUR BUSINESS DISPUTE UTILIZING THE TOP-RANKED COURTS IN THE COUNTRY 

Plan ahead and include provisions in your contracts and deal documents that select the Delaware Superior Court CCLD or the Delaware Court of Chancery arbitration as the forum to resolve any disputes. No one likes to think that a business deal or contract could result in litigation down the road, but we all know that it happens and it pays off to be well-prepared.

Klehr Harrison attorneys are available to advise you and your business on how to access one of the best court systems in the nation.  Please contact  David Eagle  (deagle@klehr.com) or any of the litigation attorneys in the Delaware office of Klehr Harrison Harvey Branzburg LLP for additional information.