The Coronavirus Impact on FINRA Arbitration and Mediation

FINRA recently announced that it has postponed all in-person arbitration and mediation proceedings through July 3, 2020. FINRA staff are currently contacting parties to reschedule hearings or offer the option to consider virtual hearing services (via Zoom or teleconference).

FINRA reminded parties that postponement would not effect any deadlines, so parties should still be prepared to exchange discovery and meet other deadlines, unless the parties agree to extend those applicable deadlines.

FINRA also announced that it would be waiving postponement fees if parties stipulate to adjourn in-person hearings scheduled from July 6, 2020 through September 4, 2020. According to FINRA, in order to to avoid these fees, the parties are required to notify FINRA of the adjournment at least 20 days prior to the first scheduled hearing date.

The question remains whether a Zoom hearing or teleconference is appropriate for your situation. The all-too-comical lawyer answer of “it depends” is a fit response here. Some of the items that I would personally consider before agreeing to a Zoom or telephonic hearing are:

  • Who are the parties involved?
  • Where is the hearing expected to be when the proceeding is resumed from adjournment?
  • What is the matter at issue? Is it employment-related, customer claim, or expungement?
  • What are the damages alleged? A claim for $10,000 in investment losses could be ripe for a Zoom hearing where a $5mm loss probably warrants an in-person hearing. Also, an expungement proceeding could probably proceed through Zoom.
  • What are the ages of the primary and secondary witnesses?
  • Are the primary and secondary witnesses healthy? Do you expect them to remain healthy through September?
  • How complex is the case?
  • Can you hold the attention of the panel remotely?
  • Do you expect there to be a lot of documentary evidence? Powerpoint presentations? In my opinion, physical evidence tends to present better in-person.
  • Do all of the parties have technology that would permit a Zoom or teleconference?

I would imagine that the volume of cases heard through remote means don’t skyrocket based simply on FINRA’s invitation. It takes both sides to agree to a remote hearing, and that is always a difficult task in adversarial proceedings.

Leave a Reply

%d bloggers like this: