Michigan continues to foster an environment for businesses to grow and flourish. Michigan’s most recent effort to generate favorable business conditions has been the creation of the Michigan business court system. Michigan business courts were created to ensure accurate, consistent and predictable results for business and commercial disputes, despite the complexities routinely involved in these matters. The new courts seek to intertwine business expertise with technology to efficiently provide low-cost dispute resolution.
The Michigan business court system goes into effect on January 1, 2013. However, the State Court Administrative Office (“SCAO”) anticipates that all required, new business courts will not begin placing cases on their business dockets until July 1, 2013.
Michigan business courts will have jurisdiction over commercial disputes in which the amount involved exceeds $25,000. Because the jurisdiction of the courts is limited to commercial disputes, only certain types of cases will qualify for this new system. In order for a matter to be resolved by a business court, it must involve a claim related to:
- Information technology, software or website development, maintenance or hosting;
- Internal organization and/or operation of a business entity;
- Contractual agreements or business dealings;
- Commercial transactions;
- Business or commercial insurance policies; or
- Commercial real property.
The business courts will not resolve a case where the claims are based solely on:
- Personal injury or wrongful death claims against health care providers;
- Product liability where the claimant is an individual;
- Family matters;
- Probate;
- Criminal;
- Condemnation;
- Appeals from lower courts or administrative agencies; or
- Landlord-Tenant matters involving residential properties.
It should be noted that the business courts will take cases that involve a mix of commercial and non-commercial claims. However, it is possible that a case could be transferred between a business court and the applicable circuit court during the litigation process based on the addition or removal of parties and claims.
The business courts aim to increase the efficiency and effectiveness of the judicial process in several ways. First, the parties to a case in the business court system will have the option to have their dispute resolved by a business judge, who will likely have significant knowledge and experience with business cases.
Second, the court system will integrate electronic communications into its operations. The courts will utilize audio, video and internet conferencing to conduct hearings and proceedings. Virtual court rooms and electronic filings will help reduce the costs and increase the efficiency of the litigation process.
Finally, it is anticipated that the business courts will have an alternative dispute resolution process to help parties resolve disputes before a trial is necessary. This process is just one of the procedures and minimum standards currently being developed by the SCAO for the Michigan business courts. The proposed rules for the Michigan business courts are scheduled to be distributed by January 1, 2013.
Each Michigan circuit court with three or more judges is required to establish a business court. The SCAO has indicated that each qualifying circuit court must submit a business court plan to the SCAO and Supreme Court for approval by May 1, 2013. Circuits with less than three judges are permitted to seek approval for a business court at any time. To date, Kent, Macomb, Oakland and Wayne counties have already established business courts. Michigan businesses should anticipate additional business courts in communities such as Washtenaw, Genesee, Ingham, Saginaw and Kalamazoo counties. It is also likely that a few Northern Michigan communities will establish business courts under the new system.
To find out more about the Michigan business court system and its impact on business litigation, please contact an attorney in Fraser Trebilcock’s Litigation Practice Group or Michael James at mjames@fraserlawfirm.com, 517-377-0823 or www.fraserlawfirm.com. Michael James, a senior attorney at Fraser Trebilcock provides representation and counseling related to all facets of business enterprise and healthcare matters.