Beyond Delaware

For 200 years the Delaware Chancery Court existed without competition. In the last 15 years, however, an increasing number of states have enacted legislation or issued administrative orders to create a dedicated business courts or procedures for managing business-related disputes.

In most cases, the motivation for these new initiatives was to ease the burden on existing trial court systems, develop judicial expertise on par with the lawyers arguing the cases before state or municipal judges, and, in some instances, to appear more business friendly.

In recent months, lawmakers in West Virginia and Mississippi have announced plans to study the feasibility of establishing a specialized business court. In July, New Hampshire Gov. John Lynch signed into law a bill to establish a business court, modeled after its family court. The intent was to create a system where a superior court judge will handle all business and commercial disputes, allowing cases to be resolved quicker and improve overall court efficiency. The court can also steer businesses toward court-sponsored mediation and arbitration, saving money on court administration costs and private arbitration fees.

“Businesses move at a different speed and they need this docket to make justice more accessible to them and accommodate the speed at which they move today. And this new business docket fits in with our goal of making the judicial process more affordable and understandable," New Hampshire Supreme Court Chief Justice John T. Broderick Jr.said at the time of the bill’s passage.

Certain municipalities—Manhattan, Boston, Las Vegas and Reno, Nev., Orlando, Fla., Cook County, Ill., for some—and the states of Maine, Rhode Island, North Carolina, among others have dedicated business courts. Jurisdictions that claim a business court typically have a specific set of judges assigned to hear business and commercial cases from beginning to end. But “business court” doesn’t accurately describe each state’s effort, either. For instance, the Philadelphia Court of Common Pleas’ Commerce Case Management Program (or “Commerce Court” for short) was created not by an act of legislation but by an administrative order to assign judges to hear a specific subset of cases taken from the trial court’s general docket.

Could these states’ efforts really challenge Delaware’s supremacy as the nation’s business court? Not likely. More than half of all American businesses are incorporated in Delaware and 60 percent of the Fortune 500, according to the state’s division of corporations, making Delaware the jurisdiction of choice for disputes. The reason so many businesses chose to incorporate there is to have a court on its side. With two centuries of case law, Delaware decision-making is generally more predictable and the reputation of the state’s judges for integrity and intelligence is unparalleled.

Delaware lawmakers take seriously the threat of competition, however. Not long after its southern neighbor enacted legislation in 2000 to establish procedures for circuit courts to adjudicate technology-related disputes, Delaware adopted a similar initiative. In a nod to its northern neighbor’s judicial prowess, Maryland was hoping to gain an edge in legal opinions related to more complex business issues involving computers and biotechnology. As Delaware’s own state motto asserts: “It’s good being first.”

Top Business Courts                       Established 

Delaware Court of Chancery             1792 

Cook County, Illinois                          1992