Despite the best intentions of the founders of a business, disputes commonly arise. Whether it be a dispute between the business founders, a dispute amongst an employee and a founder, or a dispute between two businesses, the chances are likely than most businesses will face some kind of legal dispute during the lifetime of the business.
In 2012, Michigan formed special business courts. These courts were formed to remove business disputes from general court, and have specialized judges and procedures to more effectively resolve business disputes. Public Act 333 (“Act) states: The purpose of the new Michigan business courts is to resolve commercial disputes more efficiently, accurately and predictably than when such disputes were handled in courts of general jurisdiction.
The Act defines a business dispute as any of the following:
(ii) An action in which 1 or more of the parties is a business enterprise and the other parties are its or their present or former owners, managers, shareholders, members, directors, officers, agents, employees, suppliers, or competitors, and the claims arise out of those relationships.
Business or commercials disputes include, but are not limited to:
(c) Those arising out of contractual agreements or other business dealings, including licensing, trade secret, intellectual property, antitrust, securities, noncompete, nonsolicitation, and confidentiality agreements if all available administrative remedies are completely exhausted, including, but not limited to, alternative dispute resolution processes prescribed in the agreements.
Thus, the business courts are structured to focus solely on business disputes and the courts do not adjudicate family law or personal injury actions, for example.
There were many reasons to have a specialized business court system. Sometimes, civil courts simply did not have the knowledge to deal with complex business disputes, such as those dealing with intellectual property. The business courts also have an emphasis on arbitration or mediation early in the proceedings, which was not always the case in courts of general jurisdiction. With more businesses being formed every year, the business courts offer a way to reduce the docket of courts of general jurisdiction and place them into a specialized court better suited to resolve and/or adjudicate the dispute.
Not every county has a business court. Currently, most of the courts are in the southern part of Michigan. Business courts are being added slowly to other counties, though. If you have a business, it is wise to see if there is a business court in your county.