Texas business owners should prepare for a significant shift in how high-value commercial disputes are handled. In 2023, the Texas Legislature authorized the creation of Texas Business Courts, a specialized court system designed to improve the resolution of complex business and commercial litigation.
These courts are set to open in September 2024 in Texas’ five major metropolitan areas, with plans to expand into rural areas as the Legislature sees fit.
In this Business Law Breakdown, Paul Skeith, founder and business attorney practicing in Austin, Texas outlines exactly what business owners should know about this new court.
What Do Texas Business Courts Handle?
Texas business courts are designed to handle high-value business and commercial disputes, ensuring that cases are heard by judges with deep experience in complex business litigation and transactions. Unlike traditional district courts, which hear a variety
of civil and criminal cases, these specialized courts will focus solely on business-related matters.
The courts will have concurrent jurisdiction with district courts, meaning that certain cases can be filed in either court system. However, business courts offer a distinct advantage: they are staffed by judges with at least 10 years of experience in business law, providing a higher level of expertise and efficiency in handling commercial disputes.
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What Types of Cases Will Business Courts Handle?
The Texas Business Courts will focus on high-stakes litigation, including:
- Contract disputes of $10 million or more
- Finance code and business code disputes
- Corporate disputes involving at least $5 million or publicly traded companies
- Other qualified transactions involving large-scale business dealings
How Will the Business Courts Benefit Texas Businesses?
The new system is designed to provide faster, more predictable outcomes for business owners facing complex legal issues. These key benefits include:
Faster Resolutions
Business disputes often take months—or even years—to resolve in traditional courts. The new system aims to streamline proceedings, reducing delays.
Consistency in Legal Decisions
Judges in these courts will issue written opinions, helping to establish more predictable legal precedents and reducing uncertainty in business litigation.
Expertise in Business Law
Unlike general district courts, these courts will be led by judges with significant business law experience, ensuring informed decisions in commercial disputes.
A Dedicated Court of Appeals
The new system includes a specialized Court of Appeals, ensuring that business-related appeals are handled by judges who understand the complexities of corporate litigation.
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How Should Business Owners Prepare?
With the Texas Business Courts set to open in September 2024, business owners should start considering how this new system might impact their operations. Two key steps to take now:
Consider Using Business Courts for Dispute Resolution
If your business is involved in commercial litigation, you may benefit from opting for the business court system instead of traditional district courts.
Update Your Contracts
When drafting new contracts, businesses should consider including a clause that specifies disputes will be resolved in the Texas business courts. This could provide a faster and more predictable resolution in case of a legal disagreement.
This new Texas business court marks a major development in how commercial disputes are handled in the state. By providing expert judges, consistent rulings, and a more efficient legal process, these courts are expected to be a game-changer for Texas businesses.
As the system rolls out, business owners should consult with their legal advisors to determine the best approach for integrating this new option into their contract and dispute resolution strategies.
If you have questions about how the Texas business courts could affect your business and how to navigate updating your contracts, consider contacting Richards Rodriguez & Skeith. Our business and transactional services ensure you are making strategic decisions for your Texas business.
