BILL NUMBER:S4763

TITLE OF BILL:  An act to amend the civil practice law and rules, in
relation to broadening expert disclosure in commercial cases

This is one in a series of measures being introduced at the request of
the Chief Administrative Judge upon the recommendation of her Advisory
Committee on Civil Practice.

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.