Frequent readers of this blog know that we are not shy in acknowledging the Commercial Division's status as the leading forum for resolving complex business disputes. This reputation can be, in part, largely attributed to the ongoing efforts of the Commercial Division Advisory Council, which continually assesses and suggests practical, significant modifications to the Commercial Division Rules. These changes aim to maintain the utmost level of efficiency and reinforce the Commercial Division's standing as a global leader in resolving commercial disputes.
The Advisory Council has recently proposed a significant rule change: an amendment to Commercial Division Rule 11 to mandate immediate exchange of specified categories of information at the outset of any litigation in the Commercial Division, eliminating the need for formal discovery requests. This proposal seeks to reduce some of the costs, delays, and complications associated with discovery, and to allow parties to "competently assess the risks of trial and the benefits of potential settlement in the early stage of the litigation."
The proposal recommends a more standardized disclosure system for all Commercial Division cases, replacing the existing practice in which individual judges often establish their own "partial-disclosure regimes" to facilitate discovery. The Advisory Council believes that having a Commercial Division rule tailored to the discovery needs of complex commercial litigation will create a "more uniform and consistent approach, benefiting counsel and preventing the spread of individual judges' idiosyncratic practices."
Does the proposed rule ring a bell for anyone? If it does, it's probably because it closely resembles Federal Rule of Civil Procedure Rule 26(a)(1), which also requires the exchange of initial disclosures to streamline discovery and expedite litigation. The chart below highlights some of the significant similarities between the two rules:
| Proposed Rule 11 | FRCP 26(a)(1) | |
|---|---|---|
| Initial Disclosure | (A) In General. Except as otherwise stipulated or ordered by the court, a party must, without awaiting a discovery request, provide to the other parties: (i) the name and, if known, the address and telephone number of each individual that the disclosing party intends to use to support its claims or defenses, unless such use is solely for impeachment, together with a brief description of the information expected to be elicited from such individual; (ii) a copy of all documents, electronically stored information, or other tangible things referred to in the pleadings unless they are attached to the pleadings; (iii) a computation of each category of damages claimed by the disclosing party. | (A) In General. Except as exempted by Rule 26(a)(1)(B) or as otherwise stipulated or ordered by the court, a party must, without awaiting a discovery request, provide to the other parties: (i) the name and, if known, the address and telephone number of each individual likely to have discoverable information--along with the subjects of that information–that the disclosing party may use to support its claims or defenses, unless the use would be solely for impeachment; (ii) a copy–or a description by category and location–of all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control and may use to support its claims or defenses, unless the use would be solely for impeachment; (iii) a computation of each category of damages claimed by the disclosing party–who must also make available for inspection and copying as under Rule 34 the documents or other evidentiary material, unless privileged or protected from disclosure, on which each computation is based, including materials bearing on the nature and extent of injuries suffered; and (iv) for inspection and copying as under Rule 34, any insurance agreement under which an insurance business may be liable to satisfy all or part of a possible judgment in the action or to indemnify or reimburse for payments made to satisfy the judgment. |
| Timing | A party must make the initial disclosures within 14 days after the parties' consultation as required in Rule 8 prior to the Preliminary Conference, unless a different time is set by stipulation or court order, or unless a party objects during the conference that initial disclosures are not appropriate in this action and states the objection in the proposed discovery plan. | In General. A party must make the initial disclosures at or within 14 days after the parties' Rule 26(f) conference unless a different time is set by stipulation or court order, or unless a party objects during the conference that initial disclosures are not appropriate in this action and states the objection in the proposed discovery plan. In ruling on the objection, the court must determine what disclosures, if any, are to be made and must set the time for disclosure. |
The Advisory Council has recognized clear parallels between these two rules, using the success and effectiveness of initial disclosures in federal cases as evidence that the early exchange of information "minimizes the burden, delay, and expense of discovery, while allowing parties to competently assess the risks of trial and the benefits of potential settlement in the early stages of litigation." Several states have adopted similar systems, such as Delaware's Complex Commercial Litigation Division's early disclosure requirement, which also mirrors FRCP 26(a).
As a professional Commercial Division litigator who is always looking for ways to enhance effectiveness and efficiency, I can't help but applaud any effort to streamline the discovery process in litigation. It is a well-known fact that this process can be a heavy burden, both in terms of time and financial resources, particularly for clients. This rule may be a logical step towards increased efficiency in many cases.
In some cases, I question whether it will truly have a substantial impact on the overall cost and time spent on discovery. During the early stages of litigation, many parties may not have a complete list of trial witnesses, an accurate damages calculation, or all the documents referenced in the pleadings—largely because discovery has not yet occurred. Accordingly, at least in some cases, this rule could lead to unnecessary duplication of effort, as attorneys will be required to provide the available information upfront, only to update it later as discovery progresses.
On the other hand, and particularly with respect to larger cases, this rule can be highly beneficial in helping clients identify the key witnesses and critical documents from the outset of litigation. This early insight allows clients to make informed decisions about their next steps. For example, identifying certain documents could prompt clients to consider settlement discussions they might not have otherwise entertained, particularly if they had not yet seen those documents.
To submit comments on the proposal, please email your submissions to rulecomments@nycourts.gov or write to David Nocenti, Esq., Counsel, Office of Court Administration, 25 Beaver Street, 10th Fl., New York, New York, 10004. All comments must be received by Friday, March 28, 2025.
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