State house passes collaborative law bill again.

Byline: Bill Cresenzo

A bill that would provide a framework for how North Carolina attorneys can proceed when clients on all sides want to resolve their civil and business disputes without resorting to litigation has cleared the state's House of Representatives for the second time and is now awaiting action in the state Senate.

The Uniform Collaborative Law Act, House Bill 32, is a proposed law that would allow disputing parties to negotiate settlements using principles of collaborative law that have long been used in family court disputes but have recently begun garnering more interest from attorneys handling other types of disputes.

While attorneys have always been free to resolve disputes using such techniques, their use has so far been fairly rare outside of the family law context. John Sarratt, an attorney with Harris, Sarratt & Hodges in Raleigh and president of the N.C. Collaborative Civil Law Association said the bill would be an important advance because it would put the regulations regarding collaborative law in one place in the state's statutes.

If passed, the new law would automatically stay the statute of limitations once parties have notified a court that they have agreed to participate in the collaborative process. It would also apply privilege protections to any communications made as part of the process and codify one of the defining features of collaborative lawthat the attorneys who advise each party, and their firms, are contractually prohibited from serving as counsel if the process breaks down and parties proceed to traditional litigation.

The bill cleared the House on Feb. 27 in a 91-25 vote and has been referred to the Committee On Rules and Operations of the Senate. An identical version passed the House in 2018, but the Senate didn't take it up.

Stop, collaborate and listen

Sarratt said he's hopeful the bill will pass this time. Sarratt said that collaborative negotiation costs a fraction of the price of litigation, and that while a case might last five years in Superior Court, the typical collaboration negotiation case is resolved within five weeks.

"It's quicker, it's cheaper, it's confidential, and the parties are working together to come to a mutually satisfying agreement," he said. "They are sitting down to say, 'How they can solve this problem?'"

Right now, there are statutes regarding collaborative law negotiations that apply to family court, and the new law would add that framework to civil and business law...