The Neutral Corner 2-2019:  FINRA-ODR Updates Arbitrators and Mediators on the Authority’s Latest Activities
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The Neutral Corner, the FINRA Office of Dispute Resolution’s newsletter for neutrals serving its dispute resolution forum, issues now on a quarterly basis; while the newsletter usually has a feature article, the latest edition is filled with short squibs on a variety of interesting topics. After covering the latest case filing statistics (down 22% YOY through May 2019), TNC approaches the Portal, FINRA-ODR's Web-based claim filing and processing system, from several angles (changes, registration and video assistance). Staff announce that the replacement of the IPHC Order, converting the form from a PDF to a fully integrated Portal document, has graduated to the next step: removal of the PDF from the Portal, absent a specific arbitrator request to use the old format. General dismissal and postponement orders can also be completed and submitted through the Portal.

Events, Rules & Recent Decisions

Next up, the staff previews the September 10, 2019 PLI-sponsored "Securities Arbitration 2019," which typically features a team of staff members from FINRA-ODR. This program "will provide practical tips for litigating and arbitrating elder abuse claims and strategies for knowing when and which claims are ripe for mediation." Ethical issues, diversity efforts, and future trends will fill the schedule.  FINRA neutrals will receive a 25% discount over the modest $1,850 registration fee. FINRA will, of course, report, as it does in TNC, on recent rule approvals.  Amendments to Rules 12512/13513 (RN 19-20, eff. 7/1/19) will assist third-parties who wish to oppose subpoenas or other arbitral orders (on the topic of third-party subpoenas, see the recent decision in Next Level Planning v. Prudential Ins. Co.).

Mediation in the Limelight

FINRA-ODR achieved a fantastic 89% success rate on the mediation front in the first five months of this year. New cases in agreement rose 6% during the YOY period. In the small claims area, in particular, where telephonic mediations have proven popular, FINRA has been running a 90% settlement rate. FINRA doesn't provide figures on how often this process is used, but its virtues extend beyond facilitating resolutions. FINRA indicates that the program serves mediator training objectives and aids seniors in particular. Mediator disclosures inform parties of frequency of service, success rates, and the types of cases mediated. Mediators are encouraged to keep their reports current and to provide references -- an oft-requested item. The affirmation date is automatically updated when an arbitrator submits the Arbitrator Oath

Reminders, Advice & Counseling

Back to the Portal, FINRA-OacDR reminds arbitrators that they should regularly update their disclosure reports by logging on to the Portal and accessing their bios and case information. Parties look for updating information and FINRA, since 2017, discloses when reports were last revised or affirmed.  Finally, the staff fields some questions from arbitrators about arbitrator classifications and awarding attorneys' fees. Consider this: a contract attorney who, otherwise qualifies as a Public Arbitrator becomes Non-Public for two years after working as a contract attorney for a law firm that meets the "$50K or 10%" revenue test. As to attorneys' fees, FINRA-DR staff cannot advise on the law, but they do counsel not doing independent legal research on the subject.

(ed: Arbitrators want to do the "right thing," and some think that experienced staff should just go ahead and tell them what that is. TNC does an excellent job of straddling the line between informing and training its neutrals, while avoiding the trap of offering substantive advice on legal and procedural matters.) (SAC Ref. No. 2019-27-01)

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