By James Yellen*
The FINRA dispute resolution market largely dried up as COVID-19 hit major cities starting in March 2020. While employment and broker-dealer disputes in 2020 were way up (plus 31%) and constituted almost half (47%) of all new arbitration filings, customer complaint filings for 2020 declined by 12 percent. In his January 2021 NYSBA Journal article, Zoom & Greet!” 2021’s Way To Meet, Network and Socialize at Annual Meeting and Beyond, author Michael Fox reported that the number one downloaded free app in 2020 according to Apple was Zoom. One year earlier, in 2019, Zoom did not even grace the top twenty. There is no doubt that mediators contributed to that growth, as the advantages of Zoom mediation have become ever more apparent since COVID lockdowns began in March 2020. Using his real-life experience as a mediator, the author in this article demonstrates why virtual mediation is a useful tool that should persist even after the pandemic eases.
Virtual Arbitration vs. Mediation: Some Comparisons
As we turn the calendar to 2021, it is helpful to compare, at least anecdotally, how the Coronavirus pandemic has impacted FINRA disputes resolved through arbitration versus mediation. Though less formal than court proceedings, FINRA arbitrations are, at their core, trials. And FINRA practitioners have been slow to embrace remote arbitration. Practitioners cite concerns about technical difficulties, privacy breaches, distractions and interruptions, and missed opportunities to meaningfully connect with witnesses. It is also more difficult for counsel to “read the room” in a Zoom arbitration. In a live proceeding, the panel shouldn’t telegraph how a witness or an argument is landing, but sometimes an advocate picks up clues; a quick look towards the end of the conference room table can speak volumes. Which arbitrator jotted something down during critical testimony? When do the panel members exchange glances? When do they pass notes to one another? These clues are more difficult to discern in a virtual arbitration. You can tell whether the panel members are staring at their screens; you can’t tell whether they’re looking at you, opposing counsel, a witness, a document, or last night’s ball game.
None of these arbitration-specific concerns, however, impact the effectiveness of Zoom mediations. Indeed, in some respects, Zoom mediations may prove to be both more convenient and effective in helping parties resolve disputes. Considering the mediation process, it is perhaps unsurprising that in the past year, we have primarily had positive experiences in Zoom mediation.
Mediating By Zoom: A Real-life Account
Zoom mediations typically begin with the parties and counsel in a common virtual room. This is almost, by definition, a joint session, even if all that occurs is the mediator explaining the schedule for the day and the ground rules for the mediation. After the joint session, the mediator hosts follow-up “caucus” sessions held in private breakout rooms, which are almost identical to pre-Zoom mediations. During these sessions, the parties and counsel meet privately with the mediator. If the mediator senses an impasse and needs to connect with counsel alone and away from the clients, it can be easily done with yet another virtual breakout room.
Much like an in-person session, a Zoom mediation is both informal and interactive; the mediator works to get the parties to agree, and the parties “work the ref,” so to speak. This stands in sharp contrast to practitioners’ experiences in Zoom arbitration, where the unwieldiness of documents and exhibits and the “inability to read” the arbitrators serve as impediments, in large part because arbitration itself is both more formal and less interactive. To unpack this, let’s peek behind the curtain and look at the dynamics of an actual Zoom mediation I conducted recently.
The parties, their counsel, and I began the session “together” on Zoom. Respondent’s counsel wanted to say “a few words.” Historically, I have not been a fan of opening statements. In my experience, it is harder to reach an agreement when the parties start off by digging into their adversarial positions. However, it is also important to defer to counsel if they would like to say a few words, which is what I did. Respondent’s counsel’s words led to more (and louder) words by Claimant’s counsel, and still more (and still louder) words by the Claimant, who took advantage of the joint session by unleashing two years of pent-up anger and emotion, at one point yelling “You are a loser and a liar!” at the Respondent.
The “double L” invective actually allowed the Claimant to vent directly at the Respondent in a way that, in my view, was less likely to have occurred had the parties been face-to-face. That is not to say that in-person mediations cannot get heated; they can, and they do. But in a Zoom mediation, things escalate differently. Interpersonal tools that might otherwise suppress an emotional outburst (picture a lawyer extending an arm in front of a worked-up client to signal that it’s time to stop talking) are unavailable. And raising one’s voice at a screen may be less intimidating than raising one’s voice at the person sitting across the table. On the flip side, if your opponent is being too loud and aggressive in a Zoom mediation session, you can literally “lower the volume” to quiet things down; this arguably allows one side to let off steam without scalding the other side too badly.
Was the high-decibel joint session “unproductive”? In the short term, yes. Everyone’s hackles were up, and it took some time in breakout rooms to calm things down. But for the Claimant, it was also cathartic. The case settled hours later for less than the “bottom line” the Claimant insisted on earlier. I suspect the name-calling and venting actually saved the Respondent some cash at the end of the day.
Conclusion: Zoom Mediation Is Here To Stay
Since the vast majority of FINRA claims settle, and Zoom mediation is the most popular means of settling, it is apparent that nothing succeeds like success. The question then becomes what will happen in a post-pandemic world. Will Zoom mediations be as popular a means of settling employment or market-loss disputes among and between FINRA members?
Having no crystal ball, armed with nothing more than thirty-plus years of experience in the FINRA dispute world, this mediator says the answer is a resounding “Yes.” Zoom mediations are here to stay.
*James Yellen is the Principal of Yellen Arbitration and Mediation Services, Co-Chair of the N.Y.S.B.A. Securities Law and Arbitration Committee, and serves as a member of the Board of Editors of the Securities Arbitration Commentator. He began his career in the Litigation Department at Brown & Wood, now Sidley Austin. He then served as Co-Chair of the Complex Litigation Department at Morgan Stanley Dean Witter, which then merged with Morgan Stanley. Before starting his mediation practice, Yellen was the Executive Director and Senior Attorney in the Morgan Stanley Law Division, where he tried and supervised major arbitration and regulatory matters for the firm. Yellen is an active lecturer and panel participant in securities arbitration, mediation, and legal writing, and served as an Adjunct Professor in the First Year Legal Writing Program at Fordham University School of Law for the past thirty years. Yellen received his law degree from Fordham University School of Law and his undergraduate degree from St. Lawrence University. The author thanks and acknowledges Tressa M. Cunningham, a third-year law student at Fordham University School of Law, for her assistance in the preparation of this article.
 See FINRA, Dispute Resolution Statistics, https://www.finra.org/arbitrationmediation/dispute-resolution-statistics (last visited Jan. 23, 2021).
 Michael L. Fox, “Zoom & Greet!” 2021’s Way To Meet, Network and Socialize at Annual Meeting and Beyond, N.Y. State Bar Ass’n (Dec. 10, 2020), https://nysba.org/zoom-greet-2020s-way-to-meet-network-and-socialize-at-annual-meeting-and-beyond/.
 See id.
 See, e.g., R. Thomas Dunn, Virtual Mediations Are Zooming Forward . . . Jump on Board, Nat’l L. Rev. (Apr. 10, 2020), https://www.natlawreview.com/article/virtual-mediations-are-zooming-forward-jump-board (describing the “silver-linings” of Zoom mediations, such as more streamlined processes, greater control over parties, and newfound cost- and time-efficiencies).
 Similar to a trial, arbitration advocates present cases on behalf of their clients, produce documents and exhibits, and adhere to a strict procedural code. While both arbitration and trials offer binding dispute resolution, arbitration is credited as being “faster, cheaper, and less complex.” FINRA’s Dispute Resolution Process, FINRA, https://www.finra.org/sites/default/files/Education/p117486.pdf (last visited Jan 23, 2021); Investor Bulletin: Broker-Dealer/Customer Arbitration, SEC Off. of Inv. Educ. & Advoc. (Dec. 20, 2016), https://www.sec.gov/oiea/investor-alerts-bulletins/ib_arbitration.html.
 See, e.g., Stephen Douglas Bonney, Labor Arbitration in the Time of Coronavirus: Who’s Ready for Video Hearings?, Arb. Info (May 12, 2020), https://law.missouri.edu/arbitrationinfo/2020/05/12/labor-arbitration-in-the-time-of-coronavirus-whos-ready-for-video-hearings/.
 See id.
 See id.
 See id.
 “Once you become comfortable with the technology, Zoom mediation is very much like face to face mediation, but without a lunch buffet.” Ken Shigley, A Dozen Tips for Zoom Mediations, Miles Mediation & Arb. (July 29, 2020), https://www.milesmediation.com/blog/a-dozen-tips-for-zoom-mediations/.
 Diane M. Welsh, a JAMS mediator and arbitrator, now identifies as a Zoom “convert,” reporting countless advantages for mediation sessions, such as increased participation, enhanced civility among parties, more efficient negotiations, and a better ability to de-escalate emotions. See Diane M. Welsh, Why Virtual Mediation Is Here to Stay, The Legal Intelligencer (Jan. 5, 2021), https://www.law.com/thelegalintelligencer/2021/01/05/why-virtual-mediation-is-here-to-stay/.
 See id.; see also Donald L. Swanson, Practicalities of Mediating Via Zoom, Bus. L. Today (Dec. 10, 2020), https://businesslawtoday.org/2020/12/practicalities-mediating-via-zoom/; Mediation Sessions, FINRA, https://www.finra.org/arbitration-mediation/mediation-sessions (last visited Jan. 23, 2021).
 See Dunn, supra note 12.
 A joint session typically marks the beginning of a mediation. The goal of the joint session is to allow the parties to speak to the other party’s decision-maker directly, and without interruption. See id.
 See id.
 See id.