The New Superior Court Rule 16.1: The Revamping and Reviving of an Old 'Favorite'

Effective January 1, 2018, The Superior Court of Delaware adopted a new Civil Rule of Procedure, Rule 16.1. This new rule is an adaptation of the former rule, which had called for mandatory non-binding arbitration in cases meeting certain requirements and with values falling below the jurisdictional limits. In response to concerns expressed by the bar, the old rule was abolished in March 2008. The new rule was promulgated as an attempt to address the concerns raised under the old rule, predominantly related to discovery and delay in trial scheduling.

The court first instituted a compulsory Alternative Dispute Resolution (ADR) program in 1987. In January 1991, the court officially adopted Rule 16.1, which provided for compulsory ADR in the form of arbitration.

The original Rule 16.1 mandated that civil actions falling within its jurisdiction be submitted to non-binding arbitration prior to the court’s issuance of a Trial Scheduling Order. In order to fall within the jurisdiction of the old rule, the case (with certain enumerated exceptions) had to be one in which: (1) trial was available; (2) monetary damages were sought; (3) any non-monetary claims were nominal; and (4) the claimed damages did not exceed the jurisdictional limit (which changed several times throughout the lifetime of the old rule.)

One of the more contentious provisions of the old rule related to discovery. Under the previous rule, parties entered into compulsory arbitration without first being afforded the opportunity to engage in discovery. The plaintiffs’ bar expressed concern over this provision, noting that the absence of pre-arbitration discovery resulted in parties automatically appealing the arbitrator’s order and demanding trial de novo. It was widely perceived that the compulsory arbitration requirement precluded litigants from obtaining a trial date from the onset of a case, thus delaying the time set for trial and disposition. To illustrate, in 2007, 584 civil cases were disposed of via Rule 16.1 arbitration. On average, it took a total of 333 days from the date of the filing of a complaint to disposition via an arbitrator’s order. Thus, cases not resolved by the old Rule 16.1 arbitration process were delayed by approximately one year.

Ultimately, the court repealed and amended Rule 16. The revised rule took effect on March 1, 2008, and provided that compulsory ADR be included in the court’s Trial Scheduling Order from the onset of the case. Additionally, mediation (not arbitration), for the first time, became the default method of ADR in Delaware. This decision was met with disappointment by members of the personal injury bar, many of whom believed that, “[i]mperfect as it may have been, ‘Rule 16[.1] Arbitrations’ were of great benefit in resolving cases that were significant, but financially difficult to take through a jury trial.” New Procedures for Mandatory Non-Binding Arbitration in Delaware, R. Young (Sept. 12, 2017).

In Spring 2017, a committee appointed by the Delaware Superior Court drafted a proposal for a yet another new Rule 16.1 for consideration. The new Mandatory Non-Binding Arbitration (MNA) rule took effect on January 1, 2018.

Under the MNA rule, all Superior Court civil actions in which a trial for monetary damages is sought and non-monetary claims are nominal are eligible for the MNA process, should the injured party elect same. The jurisdictional limit under the new rule is $50,000.

Included are several provisions geared toward addressing discovery-related concerns expressed by the bar under the old rule. The newest rule calls for both mandatory and discretionary discovery to be undertaken (in a timely fashion) in all civil cases where MNA is requested. For example, subsection (d)(3) states that within five days of filing an answer, the injured party must provide an executed HIPPA authorization to counsel for the defendant. Super. Ct. Civ. R. 16.1(d)(3). The injured party must also produce “all medical records and reports required by Superior Court Rule 3(h)” within five days of filing defense counsel’s Entry of Appearance. Super. Ct. Civ. R. 16.1(d)(4). All expert reports in existence at the time the complaint is filed must be produced to the opposing party within five days of the close of responsive pleadings, should the producing party intend to rely upon same at arbitration. Super. Ct. Civ. R. 16.1(d)(5). Insofar as discretionary discovery is concerned, Subsection (e) of the new rule specifically allows the parties to issue subpoenas to obtain records of treating providers [(e)(1)] and to retain experts for the purpose of medical records review (Independent Medical Examinations are prohibited, however) [(e)(2)].

In a further attempt to expedite the MNA process, the committee promulgated subsection (f) of the new rule, requiring parties to mutually select an arbitrator within 20 days of filing the final responsive pleading. Super. Ct. Civ. R. 16.1(f). Under this new rule, arbitration must be held within 120 days of filing the answer, and the arbitrator who hears the case must issue an order within five days of the arbitration hearing. Super. Ct. Civ. R. 16.1(h)(1) and (l). The rule further states that unless a party files a demand for trial de novo within 20 days of entry of the arbitration order, any party may file a motion for entry of an order of judgment. If granted, the judgment shall be deemed final. Subsection (m)(4)(B) awards costs to any defendant who is awarded a defense verdict or who obtains a verdict equal to or more favorable than the arbitrator’s order when a plaintiff appeals an arbitration order and demands a trial de novo. Super. Ct. Civ. R. 16.1(d)(3).

Most notably, under the new rule, a Trial Scheduling Order will be issued by the trial judge after the close of initial pleadings, thus immediately setting a trial date without the need to wait until an appeal from MNA. Super. Ct. Civ. R. 16.1(h)(2). A plaintiff can now elect to engage in MNA without trepidation that the case will experience undue delay as a result of not having been assigned a trial date from its inception.

The new MNA rule addresses many of the concerns previously raised under the old rule, including mandatory and permissible discovery and delay in trial scheduling. It also assesses penalties for failure to obtain a trial verdict more favorable than the arbitration order. Under the new rule, the parties are charged with meeting court-proscribed deadlines and with running the arbitration process. The initial impression among the bar appears to be widely favorable. Nevertheless, personal injury plaintiffs do not seem to be selecting MNA in most cases thus far filed in 2018. Even in matters where pre-suit settlement demands are less than the jurisdictional monetary limit for MNA, plaintiffs seem to be filing most of their complaints with traditional jury trial demands and proceeding with mediation. Over time, it is possible that the newly enacted rule will shift the preference toward MNA prior to jury trial. But for now, the new rule does not seem to have had much of an impact on personal injury cases filed in Delaware.

*Lisa is an associate in our Wilmington, Delaware office. She can be reached at 302.552.4339 or lmgrubb@mdwcg.com.

_{Defense Digest, Vol. 24, No. 3, September 2018. Defense Digest is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2018 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.}