News & Events

News & Events

7.5.2012

New FINRA Arbitration Program Strives For Flexibility

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Lane Powell Shareholder Chris Wells was quoted in a July 3 Law360 article titled “New FINRA Arbitration Program Strives For Flexibility.” The article discusses the Financial Industry Regulatory Authority’s (“FINRA”) pilot program for claims of $10 million or more, which will allow parties to hire their own arbitrators and set custom qualifications for those arbitrators. The self-regulatory body will also permit expanded discovery with depositions and interrogatories, and give parties the option to develop their own procedures for exchanging information prior to hearings. Wells commented on FINRA’s new pilot program.

“I do like the idea of expanded discovery and maybe some depositions. The flexibility is nice to have,” said Christopher B. Wells, head of Lane Powell PC’s broker-dealer group. “But after trying a lot of cases in court and a lot of cases in arbitrations, I think I can get by without depositions. Sometimes depositions help prepare the other side, and FINRA arbitration [cases] are really more dependent on document discovery.”

Wells noted that the pilot program, while welcome, does little to address the larger issues surrounding arbitration. For one, appealing an arbitration decision will remain the sticky proposition it currently is. Few arbitration awards are overturned, and Wells expects that will continue to be the case under FINRA’s program.

But Wells and other attorneys said they were glad to see FINRA was tinkering with its dispute-resolution process in hopes of improving it. They said arbitration is a critical alternative to the clogged judicial system.

Read the article (PDF).