The state wants to send a clear message that NH's superior courts are open for business-literally. The recently passed Senate Bill 378 creates a new business court within NH's existing superior court system similar to specialized business courts already operating in about 20 states.
The bill, signed into law in July, aims to establish an efficient, predictable system to resolve business disputes and to attract businesses back to the court system. The new court will initially be based in the federal courthouse in Concord before it finds a permanent home. The federal court has updated technological capabilities necessary for business disputes, which can involve extensive electronic discovery. A judge will be appointed by Gov. John Lynch later this year after a vetting process and assigned to hear all of the cases covered by the statute, which involves non-consumer business litigation involving amounts in excess of $50,000.
NH Supreme Court Chief Justice John T. Broderick Jr. played an integral part in developing the plan for a new business court, which includes offering alternative dispute resolution through the court's Office of Mediation and Arbitration. For years, corporate entities have been forgoing the superior court and consistently heading to private arbitration, mediation and the federal courts to resolve disputes.
Bringing Businesses Back to Court
Attorneys indicate that while NH's superior courts are well respected and that the sitting judges are viewed as adept and competent, the superior courts are losing market share in the business arena. Fair or not, people assume that state courts feel more compassion for the little guy and are less likely than an arbitrator or federal court judge to strictly apply the law, says Attorney Christopher T. Vrountas, a partner at Nelson, Kinder, Mosseau and Saturley, P.C. in Manchester and chair of its Employment Counseling and Litigation Practice Group.
Chief Justice Broderick says businesses need to know that there will be a dependable docket and that their case won't get stuck behind two murder trials and a personal injury case. The court has to be competitive in the 21st century. The court's docket needs to move at a speed consistent with the needs of the marketplace, he says.
Sen. Peter Burling, D-Cornish, a sponsor of new law, echoes this sentiment. In a market where everything is competitive, businesses want to know, Can I get a quick resolution to the problem that confronts me?' he says. The lawyers doing commercial litigation need to be confident that the court will be effective, fast, and that they'll get a fair resolution.
Fueling the private arbitration trend is the fact that the majority of employment and business contracts contain provisions requiring private arbitration or mediation, says Attorney Peter S. Cowan, a shareholder at Sheehan Phinney Bass + Green, P.A. in Manchester and chair of its Litigation Department. That means superior court is never even an option for many business cases. Cowan says the fundamental problem with the court system is that it is under-funded, and notes that civil filings are down throughout the country. He says the business court reinforces the message to the business community that NH's courts are a viable option for dispute resolution, adding that these types of courts have worked well in other jurisdictions. It is possible, he says, that going forward, business contracts may require the parties to head to the business court instead of arbitration.
Until recently, alternative dispute resolution, including mediation and arbitration, was widely viewed as a less expensive option to a court trial. That is changing, Cowan says. He notes that arbitration is usually just as expensive as litigation, if not more so, because of high handling fees, a lengthy set of procedural rules, as well as fees for private arbiters and mediators. Proponents of the business court point out that private arbitration has its pitfalls. Justice Broderick says there is no right to appeal a privately adjudicated matter, and that the privatization of business disputes means that the rules of the marketplace are being made behind closed doors, which has a negative effect on the public. New Hampshire benefits when the courts are used to discharge public disputes, Broderick says.
Private resolution of claims also means there is less precedent for courts to draw from to adjudicate business cases. There is an ever-decreasing precedent in commercial cases, and that's not a good thing in our system, says Attorney Richard Samuels, chair of the Corporate Department at McLane, Graf, Raulerson & Middleton, P.A. in Manchester. We rely on precedent and case law. With more cases litigated, we know more, and that helps us guide our clients.
Burling says the business court is also an economic development tool as it competes for business within New England and the Mid-Atlantic states. The Business and Industry Association of NH (BIA) agrees. This is one more sign that the state and state government are trying to take steps to make business more attractive here. It's part of a quiver of arrows, says Samuels, who also sits on the board of directors of the BIA. The central idea, he says, is that a specialized court with expertise in business matters will attract businesses back to the court system, giving them faith that cases will be decided expertly and fairly.
Attorney Erik T. Barstow, chair of the Business Law Group at Wiggin & Nourie in Manchester, agrees, saying the new legislation sends a message that New Hampshire is serious about listening to its businesses and serious about having businesses do well here. It can really become a selling point to businesses, to retain businesses here.
Broderick says that the new business court is also necessary for the court system to stay competitive. Businesses ask,
What are your court systems like for businesses?' he says, explaining NH needs a business court that can keep up with the changes in the marketplace.
Robin Comstock, president and CEO of the Greater Manchester Chamber of Commerce, says that her board of directors is enthusiastic about the business court after hearing the Chief Justice speak. We're very excited about the direction [of the business court], Comstock says. Chief Justice Broderick is very sensitive to business needs and business's role in our community. Comstock says that a court that can resolve business concerns quickly and efficiently will help attract businesses to the state and help them grow.
Facing Criticism
However, not everyone is a fan of the new court. It places the interests of the business community above other interests-interests that are more compelling, says Rick Fradette, a partner at the Manchester law firm of Beliveau, Fradette, Doyle & Gallant, P.A., and an adjunct professor at Franklin Pierce Law Center. Fradette represents victims of medical malpractice and says their interests are as compelling, if not more so, than those of a business. Yet, he says, Plaintiffs in medical malpractice cases have not been given a specialty court.
It's a sore spot with me. Instead of creating a business court, we should be focused on alleviating the suffering of the survivors and families of medical malpractice, Fradette says. To the contrary, three years ago, the insurance industry was successful in passing a law that obstructs access and delays justice to victims of malpractice by enacting a medical malpractice screening panel. The reason medical malpractice is so important, in my view, is that you really are dealing with serious and life altering events. Damages include wrongful death, stroke, permanent disability and other serious consequences of medical treatment that falls below the standard of care. When something goes wrong in a business transaction, your damages are economic loss.
The Right Judge
Experts agree finding the right judge will be crucial to the success of the business court. A lot will be driven by the lawyers, Barstow of Wiggin & Nourie says. If the perception is that the newly appointed business court judge has extensive experience and understands complex financial and commercial matters, there will be a comfort level from litigants that the court can grasp the full matter before them, sources say.
Several people interviewed for this story point to the success of the Business Litigation Session in Massachusetts's Superior Court and say Judge Allan Van Gestel, its first sitting judge, was integral to its establishment and viability. He had a huge reputation and had represented commercial interests all his life, says Attorney Vrountas, who worked with Van Gestel at Goodwin Proctor LLP in Boston. He says the judge brought a brand-identity to the court. He had integrity, compassion, and huge credibility-people knew he was out to apply the law, Vrountas says.
Chief Justice Broderick says that if the right candidate is appointed as NH's business court judge-someone who has instant name recognition with business lawyers and their clients-the court will be successful within its first year. The right judge will draw litigators and their clients because the business community will know that the judge has credibility, and understands the practical nature and elements of these types of cases, he says.
Now it comes down to the appointment of a smart, capable and willing judge to make this happen, Burling says.
The governor's office hopes to appoint the new judge by the end of this year. There are a number of candidates, says Colin Manning, press secretary for Gov. John Lynch. The Judicial Selection Committee is doing a thorough, thoughtful job.
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