Securities and investor related disputes can be mediated, arbitrated or both. Mediation and arbitration have much in common. Both mediation and arbitration are dispute resolution mechanisms intended to be fair, expedient, and cost effective. There are, however, several differences between the securities arbitration process versus the securities mediation process.
The Securities Mediation Process:
Securities mediation is, among other things, voluntary, informal, less expensive, and non-binding.
- Mediation Is Voluntary. The mediating parties decide who the mediator will be, when the mediation will take place, and how the mediated dispute will be settled or resolved.
- Mediation Is Informal. In mediation, an impartial person referred to as a mediator participates in negotiations between the mediating parties. The mediation process is quite informal.
- Mediation Is Inexpensive. The mediation process is typically less expensive than arbitration or litigation.
- Mediation Is Non-Binding. Unlike other forms of dispute resolution, such as arbitration and litigation, the mediator typically does not impose a solution or decide your case. Instead, the mediator guides or helps the parties to reach or create their own solution. Mediation parties may still arbitrate their dispute if they are unable to agree on a mediation settlement.
Mediation can be a true “win-win” solution. The mediator’s role is to help or assist the mediation parties find a mutually acceptable solution, settlement or resolution to their controversy or dispute. According to FINRA, since the inception of it mediation program in 1995, more than 6,000 cases have been filed in mediation. According to FINRA, parties who mediate in FINRA’s mediation forum resolve four out of every five disputes, an 80% settlement rate.
The Securities Arbitration Process:
Securities arbitration is, among other things, impartial, quick and expedient, cheap, informal, convenient, fair and final and binding.
- Arbitration Is Impartial. Based on the size of your securities claim, your arbitration dispute will be heard by one or more impartial arbitrators. Arbitrators are typically selected by the parties through an automated system that produces arbitrator lists. Parties may remove any listed arbitrator for any reason. They are encouraged to rank the remaining arbitrators, according to preference. Securities arbitration is impartial.
- Arbitration Is Fast, Cost-Effective and Informal. Arbitration is generally faster, less expensive, and less formal than litigation in court. Arbitrators typically try to issue their securities arbitration award within 30 business days after the close of the securities arbitration proceeding.
- Arbitration Is Convenient. Arbitrations can be heard by FINRA, for example, in 47 cities nationwide. In cases involving securities investors, hearing locations are typically closest to the investor’s residence at the time the dispute arose. Securities arbitration is convenient.
- Arbitration Is Fair. Securities arbitration is fair.During the securities arbitration hearing, parties make brief opening statements explaining what they intend to prove and what relief (e.g., money damages) is sought. Parties have the opportunity to present documents and witnesses in support of their positions, to object to documents and to question witnesses presented by other parties, and to make closing remarks to summarize their positions.
- Arbitration Is Final and Binding. Securites arbitration is final and binding.Arbitrators evaluate the evidence and arguments presented and reach a final and binding decision (the “award”). Awards are only subject to court review, if at all, on very limited grounds.
According to FINRA, it handles 7,000 arbitration cases annually.
If You Have Questions About Securities Arbitration or Mediation, Or Believe You May Have A Claim That You Would Like Arbitrated Or Mediated, Contact A Securities and Investment Attorney.
-Mediate or Arbitrate A Securities Claim-
