Julie Wall spoke at DRI’s Life, Health, Disability & ERISA Seminar in Boston on April 11, 2018. The topic was “Affirmative Claims in ERISA actions.”
FINRA is seeking to amend the Customer and Industry codes to provide for optional streamlined arbitration procedures in matters involving claims of $50,000 or less.
As currently constituted, these FINRA claims are determined (1) based on the parties’ pleadings and submitted materials, or (2) at the request of a claimant, through a full, in person hearing that is not limited in duration and permits cross examination. FINRA determined, however, that parties are often unhappy with arbitration on the papers and the cost associated with a full hearing, along with the prospect of cross examination, may dissuade certain claimants from requesting a hearing.
FINRA is consequently seeking to implement a third arbitration option that falls between the current choices. This proposed intermediate process would generally (1) be held over the telephone, (2) limit claimants and respondents to two hours each to present their case and 30 minutes for rebuttals and closings, (3) limit the proceedings to two hearing sessions in a single day, exclusive of prehearing conferences, (4) remove the opportunity for cross examination, and (5) prevent parties from calling opposing parties as witnesses. Arbitrators would still be permitted to question witnesses and the ability to choose this intermediate process would rest with the claimant.
FINRA submitted the proposed rule change to the SEC in January 2018 for regulatory approval. Should the SEC approve the proposal, FINRA would announce the effective date of the change in a Regulatory Notice to be published not more than 120 days after the approval and the effective date would be no later than 60 days thereafter. The proposed rule change is available on the link below.
Proposed Rule Change