Relates to broadening expert disclosure in commercial cases

One of the main objectives of the Commercial Division is to provide "a world class forum for the resolution of commercial disputes."{1} Chief Judge Kaye, Commercial Litigation in New York State Courts § 1.7, at p.16 (Haig 4B West's NY Prac Series). To attain that objective, the State must relax certain restrictions on expert disclosure imposed by the CPLR (see id. at pp. 3-4) to address the special needs of substantial commercial cases. Accordingly, we believe that limited amendments to the expert disclosure statute, CPLR 3101, would promote more efficient and thorough preparation by attorneys in commercial actions and speedier resolution of those actions, thereby encouraging commercial litigants to use our court system. Thus, we promote this amendment to CPLR 3101(d)(1)(i) that would allow for greater expert disclosure in commercial actions. CPLR 3101(d)(1)(i) provides for the furnishing, upon request of a party, of a statement regarding an expert whom the adversary intends to call at trial. That provision authorizes further disclosure concerning the expected testimony of an expert only by court order "upon a showing of special circumstances." The courts have interpreted "special circumstances" narrowly, generally confining it to instances in which the critical physical evidence in a case has been destroyed after its inspection by an expert for one side but before its inspection by the expert for the other, and certain other, similarly limited situations. E.g., Adams Lighting Corp. v First Central Ins. Co., 230 AD2d 757 (2d Dept. 1996); The Hartford v Black & Decker, 221 AD2d 986 (4th Dept. 1995); Rosario v General Motors Corp., 148 AD2d 108 (1st Dept. 1989); Connors, Practice Commentaries, McKinney's Cons Laws of NY, Book 713, C:3101:29A.

We believe that, on balance, the current rules governing expert disclosure work reasonably well in cases other than commercial cases. Therefore, we propose that CPLR 3101(d)(1)(i) be modified to permit additional expert disclosure in substantial commercial cases only. The issues addressed by experts in commercial cases often are complex, touching on nuanced economic, financial and corporate principles, such as how stock or other securities should be valued; how a business should be valued; or whether the financial analysis of a board of directors was sound under the circumstances. In addition to presenting difficult legal and factual issues, commercial cases often involve substantial sums of money or impact corporate governance. Generous expert disclosure is available in virtually all other forums, including all other state courts and the Federal courts, see Federal Rules Civil Procedure 26. A modern forum for the resolution of commercial disputes is essential for New York to maintain its prominence as an international financial center; and, unless meaningful expert disclosure is routinely available in commercial actions, New York's efforts to maintain its financial dominance may be seriously compromised. Accordingly, we believe that additional expert disclosure in commercial cases should be permitted to provide the

world class forum for the resolution of commercial disputes the State needs.

Under this measure, CPLR 3101(d)(1)(iii) would be divided into two subparts. The first, subpart (A), would retain the existing provisions of (d)(1)(iii), which would apply to most cases, including smaller commercial cases. These commercial cases usually are less complex than those involving larger sums, and more extensive disclosure of experts would be disproportionately costly. However, in commercial cases in which $250,000 or more is found by the court to be in controversy, the amendment, in the form of a new subpart (B), would expressly authorize the court to allow further disclosure of experts expected to testify at trial. Under this proposal, the applicant would be obliged to show that the need for that disclosure outweighs the concomitant expense and delay to any party; and to demonstrate that traditional expert discovery as provided for by CPLR 3101(d)(1)(i) would not suffice. However, the applicant would not have to demonstrate "special circumstances" as currently construed by the case law, which would remain the standard for all cases other than this group of substantial commercial cases. Because this measure would require the court to weigh the risk that the proposed disclosure might be unduly expensive or cause unreason able delay, the court should normally inquire, if further disclosure is found necessary, whether a particular form of disclosure would be more appropriate, including less expensive and time-consuming, than another.

"Commercial action" is defined so as to include the most common forms of such disputes, and a measure of flexibility is provided for. The definition expressly excludes personal injury, wrongful death, matrimonial and certain other matters.

Under this measure, if the court determined that a deposition were in order, it could set reasonable boundaries on the breadth of the matters to be inquired into and the length of the deposition. The measure provides that unless it is unreasonable, the court shall require that the inquiring party pay a reasonable fee to the expert in the case of deposition disclosure, since this seems the fairest approach in most instances.

The measure provides that the further disclosure of experts authorized by the court shall take place at such time as the court deems appropriate. In contrast with the practice in most personal injury matters, experts in commercial cases are often retained at an early point, In large commercial cases, many of which are litigated in the Commercial Division around the state, the court is expected to, and does, engage in extensive supervision of disclosure proceedings and establish a comprehensive disclosure schedule, which would include an appropriate deadline for further expert disclosure, if ordered.

This measure, which would have no fiscal impact on the State, would take effect immediately.

2009 Legislative History: OCA 2009-43 2011-12 Legislative History: OCA 2011-7 Senate 4592 (Bonacic) Judiciary

{1} The Commercial Division consists of special parts of Supreme Court established in selected venues around the State for the dual purpose of improving the efficiency with which commercial litigation is resolved and enhancing the quality of judicial treatment of such litigation.