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INSURANCE COVERAGE CASES IN THE NEW BUSINESS COURTS

posted on February 18, 2014 by Willingham & Cote

 

            Effective January 1, 2013, the Legislature enacted the Business Court statute, and circuit courts across Michigan have gradually been implementing the legislation.  Each circuit court must create a special business docket.  In larger circuits, one or more judges are assigned specifically to handle business docket cases.

            Basically, all “business or commercial disputes” will be assigned to the business court.  The definition of that term is broad.  Insurance coverage cases will be assigned to the business court if they involve commercial policies or dwelling package or similar policies.  However, coverage disputes involving only an insured individual consumer (such as with a homeowner’s policy) will generally not be considered a business dispute.  As to motor vehicle insurance coverage cases, those will not be assigned to the business court unless there are two or more insurers involved in the case.  An action will be assigned to the business court if any part of the action involves a business dispute, even if there are other aspects that are not commercial in nature.  This provision considerably broadens the business court’s scope. 

            Where the underlying tort case is pending in the same circuit, the chief judge has the discretion to assign the insurance coverage case to the same judge who is handling the underlying case, or he may assign the coverage case to the business court if it involves a commercial policy or is otherwise within the business court’s scope.

            In general, business court cases will involve a more hands-on approach by the court.  There are provisions for the court to be directly involved in the case early in the process, and there are procedures for early ADR.  Presumably, judges handling solely or primarily business court cases will have more expertise in business matters including insurance coverage cases.  The statute states that one of the goals is to increase the accuracy, consistency and predictability of decisions in commercial cases.  

            Many courts have adopted local administrative rules providing for pilot projects to study to effectiveness of the new business courts.

            


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