New York’s Commercial Division has long prided itself on adopting practices and procedures similar to the federal courts. A recent amendment to its rules takes a further step in that direction by mandating initial disclosures akin to those called for under Federal Rule of Civil Procedure 26(a). Effective July 7, 2025, parties may no longer await a discovery request before providing their adversary with witness information, documents referenced in the pleadings, and a computation of each category of claimed damages. Instead, such information must now be disclosed at the onset of litigation, which per the new rule—i.e. Commercial Division Rule 11-h—is 14 days after the parties consult with each other in advance of the preliminary conference.[1]
The details of Commercial Division Rule 11-h, and its likely impact on parties and their counsel, are outlined below.
The Required Disclosures
The following disclosures must be provided within 14 days of the parties’ pre-preliminary conference consultation:
- Witnesses: the name and, if known, the address and telephone number of each individual that the 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.[2]
- Documents: a copy of all documents, electronically stored information, or other tangible things referred, but not attached, to in the pleadings.[3]
- Damages: a computation of each category of damages claimed by the party.[4]
These disclosures must be in writing, signed and served,[5] and must be based on the information reasonably available to the party at the time the disclosure is made.[6] Parties are not excused from making the disclosures because they have not fully investigated the case, because they challenge the sufficiency of another party’s initial disclosures, or because another party has not made its initial disclosures.[7] Moreover, parties who fail to use good faith in making the initial disclosures may be sanctioned in the form of an award to the non-disclosing party of the attorney’s fees and costs incurred as a result of such failure.[8]
Impact on Practitioners
Despite being substantially similar to its federal equivalent, the new rule is somewhat less onerous in its demands. When it comes to providing witness information and setting forth computations of damages, Rule 11-h is nearly identical to Fed. R. Civ. P. 26(a)(1)(A)(i) and (iii), the only difference being that the federal rule imposes the added requirement of supporting each damage computation with documents or other evidentiary materials. On the other hand, Fed. R. Civ. P. 26(a)(1)(A)(i) requires disclosure of, or description by category 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,”[9] in contrast to Commercial Division Rule 11-h, which only requires disclosure of documents referred, but not attached, to in the pleadings.[10]
Thus at least regarding the disclosure of documents, the added onus on counsel appears minimal as documents specifically referenced in a pleading would have anyway or otherwise been annexed to that same pleading, thereby making disclosure of those documents either unnecessary or unburdensome. This is a marked difference from federal practice where, in order to comply with Fed. R. Civ. P. 26 (a)(1)(A)(ii), counsel must devote time and resources to gathering and producing relevant documents within their custody, possession, or control, or, alternatively, to describing such categories of documents.
Commercial Division Rule 11-h’s most significant departure from the federal rule concerns disclosure of insurance agreements. Unlike Fed. R. Civ. P. 26(a)(1)(A)(iv), Commercial Division Rule 11-h does not include insurance agreements as part of the initial disclosures. One of the initial disclosures required by Fed. R. Civ. P. 26(a)(1)(A)(iv) is any agreement under which an insurer may be responsible for satisfying, indemnifying, or reimbursing all or part of a possible judgment in the action. Yet the drafters of Commercial Division Rule 11-h chose not to incorporate insurance agreements into the initial disclosures. As such, parties remain bound by § 3101(f) of New York’s Civil Practice Law and Rules, which necessitates provision of insurance agreements at a much later date, i.e. within 90-days after service of an answer to the complaint.
By not requiring prompt disclosure of insurance agreements, Commercial Division Rule 11-h leaves out Federal Rule 26(a)’s most effective mechanism for facilitating early resolution of an action. Disclosure of insurance coverage, or lack thereof, materially influences the decision to settle or to pursue what may become protracted litigation. Having to wait longer than 14 days after the pre-preliminary conference consultation to learn about an adverse parties’ insurance coverage will likely defer this pivotal decision longer than the drafters of Commercial Division Rule 11-h might have envisioned when they contemplated that “timely disclosure of basic case information from both parties at the outset of litigation…allows parties to competently assess the risks of trial and the benefits of potential settlement in the early stages of the litigation.”[11]
Conclusion
For clients with complex business disputes falling under New York’s jurisdiction, opting into the Commercial Division is a choice they must typically make at the beginning of an action, when the Request for Judicial Intervention form is completed. For plaintiff, this could be when the complaint is filed, whereas for defendant it is usually when a motion for dismissal on the pleadings is brought.[12]
Rule 11-h adds another layer of consideration to the decision to opt in. Being in New York’s Commercial Division now means that parties are expected to have a more concrete notion of their estimated damages before entering into full blown discovery. They must also have a firmer sense of who their likely witnesses are and the documents that support their claims. The extent of parties’ knowledge on these areas will, in turn, affect the calculus governing whether the Commercial Division is the preferred forum over New York’s general trial court. It is also worth noting here that when parties and their counsel confront the topics encompassed by the initial disclosures rule at the outset of litigation, regardless of whether they end up deciding to invoke the Commercial Division’s jurisdiction, they are nonetheless compelled to make a realistic evaluation of potential recovery or liability early on in a case.
For now, it remains to be seen how the actual application of Commercial Rule 11-h will play out in the courtroom. It is, however, clear that the new rule highlights the importance of seeking counsel from an attorney well versed in Commercial Division practice and that has
litigated a multitude of intricate business transactions and closely-held business disputes in that forum.
[1]N.Y. Comp. Codes R. & Regs. tit. 22, § 202.70, Commercial Division Rule 11-h(a)(1)(B)(i). Commercial Division Rule 7 provides that a preliminary conference shall be held within 45 days of assignment of the case to a Commercial Division justice, and Commercial Division Rule 8 states that the parties must engage in a consultation with each other before such conference.
[2]N.Y. Comp. Codes R. & Regs. tit. 22, § 202.70, Commercial Division Rule 11-h(a)(1)(A)(i).
[3]N.Y. Comp. Codes R. & Regs. tit. 22, § 202.70, Commercial Division Rule 11-h(a)(1)(A)(ii).
[4]N.Y. Comp. Codes R. & Regs. tit. 22, § 202.70, Commercial Division Rule 11-h(a)(1)(A)(i).
[5]N.Y. Comp. Codes R. & Regs. tit. 22, § 202.70, Commercial Division Rule 11-h(b).
[6]N.Y. Comp. Codes R. & Regs. tit. 22, § 202.70, Commercial Division Rule 11-h(c).
[7]N.Y. Comp. Codes R. & Regs. tit. 22, § 202.70, Commercial Division Rule 11-h(c).
[8]N.Y. Comp. Codes R. & Regs. tit. 22, § 202.70, Commercial Division Rule 11-h(a)(2).
[9]Fed. R. Civ. P. 26 (a)(1)(A)(ii).
[10]N.Y. Comp. Codes R. & Regs. tit. 22, § 202.70, Commercial Division Rule 11-h(a)(1)(A)(ii).
[11]Memorandum from the Commercial Division Advisory Council, dated November 19, 2024, p.2, accessible at https://www.nycourts.gov/LegacyPDFS/rules/comments/pdf/RequestForPublicComment-CommercialDivision-InitialDisclosures-020725.pdf.
[12]As in the federal courts, motions for dismissal on the pleadings are more likely than an answer to be the first paper filed by defendants in the Commercial Division.
[View source.]
