Thursday, June 10, 2010

The History of Business Courts

The history of business courts varies greatly from state to state. Not all states have business courts and many have their own business courts history.

Proposed reason for business courts in California
The Ad Hoc Committee of the California Bar beginning in 1990 piloted a study to determine whether to implement business courts in California. The idea of establishing business courts was for the purpose of handling complex business cases with greater efficiency and less time consuming efforts resulting in faster resolution of complex commercial cases. This study culminated in 1997 based on a recommendation from the Business Court Study Task Force advising against the use business courts. The reason given was a lack of viable support for business courts to succeed. More specifically, in 1993, the California State Board Bar of Governors passed a resolution to block legislation establishing specialized courts for business cases, reasoning that such courts would unjustly favor business interests and draw the best judges and resources away from other types of cases. The Business Lawyer Vol. 60, November 2004.

Complex Civil Litigation Pilot Program
However, efforts continued to devise ways to improve management of California complex business cases. The Bar Judicial Counsel in 2000 established complex case management programs in six California Superior Courts which focused on improving the quality of judicial management so complex cases could be resolved more quickly, costs kept down, and effective decision making could occur.

Out of this program emerged legal clarification that defined complex business cases. Guidelines to determine whether or not a case is complex include:
  • The number of pretrial motions
  • Number of witnesses
  • Separately represented parties
  • Coordination necessary between courts in other counties, states, or countries
  • Degree of post judgment judicial supervision required

Provisionally complex cases based on the inherent nature of the case, include:
  • Antitrust/trade regulation claims
  • Construction defect claims
  • Securities/investment losses involving many parties
  • Environmental/toxic torts involving many parties
  • Mass tort claims
  • Class actions
  • Insurance claims arising out of the above
California Court Rule 1800 determined that, in general, complex cases required exceptional judicial management to avoid placing unnecessary burdens on the courts or litigants.
For more information about how complex business cases are handled in California, speak with an Orange County business lawyer.

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