FINRA arbitrations may never be the same because FINRA recently proposed to redefine “public arbitrator” to exclude anyone from the financial industry from falling within that definition. Couple that proposal with the existing ability of a claimant to select an all public panel and you have a totally new arbitration system.
What does this proposal mean for the long-term future of arbitration? For one, I believe that it will make arbitrations more expensive. You may ask, how so?
When there was an industry arbitrator on the panel, parties sometimes tried to “use” that person as their expert by trying to convince the industry arbitrator of their side in the hope that the industry person would convince the other panel members of their position.
Now, it is likely that both sides will have to have their own experts on liability and/or damages because you will no longer have an industry voice. Although some may see this as a good thing, it will certainly cost both sides of the aisle more money. It appears as though the only real winners will be the experts.
Regardless if you represent the interests of a firm or a customer, you will likely be spending more money to take the claims through conclusion. Start lining up your experts now or be left in the dust.
* photo from freedigitalphotos.net