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Will Court Closures Cost You More?

Litigating a commercial dispute in New York State can be a long and arduous affair. It is often a tug-a-war between one side trying to delay and the other trying to expedite. And, even if both sides wish to resolve their dispute as quickly as possible, it can still take years to do so. The courts are congested, judges can take months to decide motions, and most motions result in an appealable order. Appeals, by their very nature, can take over a year to be briefed, argued and decided.


Delay, however, is not without risk to both parties. If a party prevails on a breach of contract claim, that party will be entitled to 9% interest from the date of the breach. Sometimes, by the time a case is ready to be decided, the interest exceeds the amount of the initial claim. This is one of the reasons cases often settle before a judgment is reached.


On the other hand, the prospect of 9% interest is tempered by the fact that one cannot be assured that the defendant will be solvent at the end of a multi-year litigation, and also by the fact that multi-year litigations can be very expensive.


Effective March 22, 2020, and until further notice, the New York courts have barred parties from filing papers in commercial disputes. See http://www.nycourts.gov/whatsnew/pdf/AO-78-2020.pdf


Will there be a large influx of litigation and motion practice once the court-imposed cessation of commercial litigation is lifted? Will parties have worked out their pending disputes in the interim? Will there will be a large number of virus-related disputes that will eventually make their way into the court system? Of course, the answer to these questions is yes; we just don’t know what the overall impact on the courts will be.


What I do know, is that work tends to take as much time to complete as there is time to complete it, and that many law firms are struggling to hit their billable hour targets given the sudden “closure” of the court system. In some instances this will mean that the appeal which might have taken 50 hours of attorney time will wind up taking seventy-five or a hundred hours. That research memo that might have taken ten hours may now take thirty hours. Whether the final work product will be proportionately improved by the extra time and expense is anybody’s guess, and is dependent on many factors.


Make sure that you aren’t going to be surprised by that legal bill because yours was the only matter on the associate’s plate for the month of April. You can ask that pens be put down if its appropriate to do so. Or, you can ask to see the final version of that memo or brief by a date certain. Or, you can request a cap on the time spent on a legal project. My suggestion is to reach out to your lawyers and make your expectations known, or at least raise any concerns you may have so that they can be addressed beforehand.

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