Large arbitration cases of $10 million or more can now create new processes to fit a case and go around certain established rules under a new pilot program launched today by the Financial Industry Regulatory Authority, or FINRA.
The move from the independent securities regulator comes as the number of large arbitration cases has increased, Linda Fienberg, president of FINRA dispute resolution, said in a statement. “We wanted to introduce a more formal approach to give parties greater flexibility and more control over the administration of their case,” Fienberg said.
Participation in the pilot is voluntary and requires additional costs from both sides in a given case, particularly when it comes any additional fees for arbitrators or costs for other facilities that may be chosen.
Both are areas where the new pilot program will allow for more choice, including where to hold arbitration hearings and more say in arbitrator selection and qualifications. Non-FINRA arbitrators may also be selected for the cases.
Communication may also be tweaked to create new process for exchanging case information prior to a hearing, with the additional option for more depositions and interrogatories.
In order to participate in the pilot, all parties also have to have legal representation.