Arbitration is an alternative to litigation or mediation in order to resolve a dispute. Arbitration panels are composed of one or three arbitrators who are selected by the parties. They read the pleadings filed by the parties, listen to the arguments, study the documentary and/or testimonial evidence, and render a decision. The panel's decision, called an "award," is final and binding on all the parties. All parties must abide by the award, unless it is successfully challenged in court within the statutory time period. Arbitration is generally confidential, and documents submitted in arbitration are not publicly-available, unlike court-related filings. However, if an award is issued at the conclusion of the case, FINRA posts it in its Arbitration Awards Online Database, which is publicly available.
|Time||On average, an arbitration can take a little over a year to complete from the time the claim is filed until an award is rendered. The turnaround time varies, and can be affected by many factors, including the number of parties and witnesses involved, the complexity of the issues, the volume of discovery and the schedules of the parties and arbitrators.View dispute resolution statistics for yearly data.|
|Cost||The cost of an arbitration case varies. Cost is affected by the amount of the claim, the number of hearing sessions, number of discovery motions, and any postponements. View our fees section for more information.|
Arbitration cases are eligible to be heard in FINRA's forum if the following criteria are met:
|Required Investor Arbitration||An investor must arbitrate at FINRA if:|
Required Industry Arbitration
A broker or a brokerage firm must arbitrate at FINRA if:
If an investor requests arbitration, a broker or a brokerage firm must arbitrate at FINRA.
Exception to required industry arbitration:
If you are a broker and your dispute involves an issue of employment discrimination, including sexual harassment, the dispute is not required to be arbitrated unless the parties agreed to arbitrate it, either before or after the issue arose.
|Resolution and Results||The resolution of arbitration cases vary. Some are decided by the arbitrators; others are resolved by settlement of the parties or through mediation. In a significant number of cases, investors receive monetary or non-monetary relief, either from an award rendered by the panel or a settlement of the parties. For more information on how cases close and how often customers are awarded damages, view our dispute resolution statistics.|
|Legal Representation||You should consider hiring an attorney to represent you during the arbitration proceedings to provide direction and advice. Even if you do not choose to hire an attorney, the other parties may have counsel. Generally, brokerage firms are represented by an attorney. If you cannot afford an attorney, some law schools provide legal representation through securities arbitration clinics. For more information, view our section on how to find legal representation.|
|Arbitration Process||View our arbitration process section for a description of the steps required to complete an arbitration.|