As part of the public response to coronavirus, most state and federal courts have changed and limited their operations in some way, including staying or extending case deadlines and timetables. Here in Georgia, Chief Justice Melton has extended an existing statewide judicial emergency an additional month, through May 14, suspending some existing deadlines and asking that courts prioritize essential matters, including those necessary to protect health and safety. Chief Judges in many Georgia counties are entering similar orders, tolling deadlines and statutes of limitation, limiting hearings and consideration to the most essential or emergency matters, and in many cases, postponing civil trials and corresponding deadlines.
While these necessary measures continue, at least over the next several months, what does this mean for commercial disputes? The net effect, in the short-term, will be a slowdown in the ability to have existing cases decided timely and to move new matters forward. And given current levels of progress in combating the pandemic, it appears that this limited availability will continue.
This delay presents a problem, because there are any number of matters that, while not health- or safety-related, concern critical and pressing business and operational needs. For the benefit of the courts—at least until regular operations resume—and the parties—who require guidance and resolution—those disputes need to be addressed. Here are some useful alternative approaches:
- Consider setting up an early mediation. Having a trained, third-party neutral work with the parties to solve their disputes without the need to commence litigation is always a good and effective practice. It has a high success rate on the front-end and is more important than ever now. To ensure appropriate social distancing, mediation can be conducted by video feed.
- For unresolved and pressing matters, consider using arbitration instead — it is confidential, tailored to the dispute, and results in a binding award as quickly as the parties require. To fit their timing needs, the parties can provide that the matters will be arbitrated on an expedited basis under the selected rules, or even on a particular time frame specified to which they agree. The parties can also agree in advanced to limit discovery and motion practice to ensure a timely and inexpensive resolution. Importantly, technological flexibility has long been a feature of arbitration. The parties can agree to conduct all of their hearings by video, and in addition to stable platforms for doing so, vendors are now able to provide effective means of working with documents and exhibits remotely, tailored to examining witnesses. Even where a matter has already been commenced in court, the parties can agree between themselves at any time to submit the dispute to arbitration. Where the parties stipulate that a matter is to be submitted to arbitration, courts will generally be glad to refer them and to order that their matter is closed or stayed pending resolution of the arbitration.
- For less urgent matters, consider a tolling agreement. Such an agreement allows the parties to acknowledge an unresolved dispute and, for a specified period of time, to freeze their respective rights and defenses in place and stop the running of any applicable statutes of limitation. A tolling agreement can provide necessary “breathing room” for further negotiation and until such time as resolution in court or arbitration, if necessary, is more feasible.
- For any emergency motions with the court, be clear about what the emergency is. Referring to current public health concerns, courts have already begun chastising some parties for bringing “emergencies” to the court during this time that lack true urgency. It is thus prudent to evaluate any emergency motion to be filed with the court with a more careful eye than ever, to be sure that a true emergency exists and that it is clearly articulated.
At the same time, don’t abandon judicial intervention if it’s warranted, even if your dispute is currently in arbitration. For example, your arbitrator may be empowered to order injunctive relief—like a motion for preliminary injunction or a TRO—but if the other party is not willing to comply, you will still have to go to court to enforce the order. In that case, you should consider whether it would be permissible and more advisable to go directly to the court in the first instance.
In sum, although the delays courts are experiencing are concerning, they do not mean commercial parties are without alternatives. Using a tolling agreement for less urgent matters, seeking early mediation, considering arbitration for both pre-litigation disputes and disputes already in litigation, and being very selective in filing emergency injunctive relief motions are all ways to ensure effective and timely resolution of business disputes.
Andrew B. Flake is a partner on the Business Litigation Team at Arnall Golden Gregory LLP. He serves as an arbitrator for the American Arbitration Association on its Commercial Disputes panel, and is a registered mediator.