You’ve Filed a Claim – Now What? Arbitrator Selection and Prehearing Conferences

By Mary Ann Hanke, Fall 2016 Student Intern

You have filed a statement of claim, and forty-five days have passed and the answer is officially due. Regardless of whether the Respondents in your claim have actually answered, FINRA will begin the next step in the process, which is arbitrator selection.

If you have a claim under $50,000, your case will follow according to FINRA’s Simplified Arbitration rules. In summary, you will have a shorter case timeline and you will have the option to request an arbitration hearing or just have your case decided based on the materials and pleadings you have filed. There are pros and cons to choosing or not choosing a paper case, so discuss this with your attorney before filing your statement of claim. If you do choose a hearing, you will have at most one arbitrator decide your case.

If your claim is between $50,000 and $100,000, your case will also be decided by one arbitrator. If your claim is over $100,000, three arbitrators will decide your case. In all cases where there are arbitrators, the selection process will follow similar procedures. This post, however, will focus on the types of small cases where there would only be one arbitrator.

To start the selection process, for all claims under $100,000, FINRA will send you and the Respondents the same list of ten names. These are names of FINRA chair-qualified public arbitrators. Along with the names, you will receive their arbitrator disclosure reports. These reports contain some background information and case history per arbitrator.

After receiving the list, you should do a little more research on the arbitrators. This is important because you have the opportunity to strike four of the ten names, and you will want to make sure you are strategically striking the right ones. In fact, each separately represented party has the opportunity to do this elimination round. Then, each party turns in to FINRA their list of six remaining names, ranked from 1 to 6, and FINRA will choose the highest ranked arbitrator remaining from the combined lists. If there is none, then FINRA will randomly select one from its database of chair-qualified arbitrators.

Once an arbitrator is selected, you may still be able to challenge the selection for cause for the following reasons: opinion and bias, personal and business relationships, current or previous involvement, financial interest, or was an expert witness in the matter.

Once you have your arbitrator, the first Initial Prehearing Conference will be scheduled. This meeting is the first time that you will have a chance to meet with the opposing side and the arbitrator to set the case schedule. After this meeting, you will have a much better idea of the timeline and what to expect in the upcoming steps before arbitration.

What’s next? Discovery…