Neutral Corner - December 2002

NASD to Provide Online Chairperson Training

On November 5, 2002, NASD announced that its Dispute Resolution Division will provide Chairperson Training online in 2003. This online arbitrator training program—Dispute Resolution's first—will replace current Chairperson Training, which consists of precourse self-study reading, followed by in-person classroom training.

"We are delighted to offer online Chairperson Training to NASD's roster of arbitrators. This Web-based capacity will give us the opportunity to enhance the skills of our chair panelists and make the forum more efficient, faster, and less costly for all participants," said Linda Fienberg, President of NASD Dispute Resolution.

NASD selected FIRE Solutions, Inc. (FIRE) to assist in converting an updated version of the current Chairperson Training curriculum to a Web-based format. FIRE also will manage the administrative and technical aspects of the new online program. To answer trainee questions, the new program will provide electronic mail and telephone access to NASD trainers.

“Working together, NASD Dispute Resolution and FIRE Solutions believe we will provide a high-impact training initiative that will scale nationally in a flexible, efficient, and results-oriented manner,” said Juliana Lutzi, CEO of FIRE Solutions. “The result will be an arbitrator training program that benefits the investing public, financial services firms, and continues the effectiveness of the arbitration process.”

NASD also conducts Panel Member Training programs in many locations. Panel Member Training is required of all newly approved arbitrators and consists of precourse self-study reading and face-to-face classroom learning. At the conclusion of panel member classroom training, arbitrators must pass a test based on the reading material and classroom instruction.

Messages from the Editor

New York Office to Relocate

In the latter part of January 2003, NASD plans to relocate the Dispute Resolution office located in New York City to One Liberty Plaza, 27th Floor. For more information, stay tuned to our Web Site and this newsletter.


We are delighted to inform you that, effective January 1, 2003, John Barlow, Rick Berry, Barbara Brady, and Rose Schindler have been promoted to Associate Vice Presidents, and Shari Sturm has been promoted to Regional Director - Mid-Atlantic Region.

John Barlow, Regional Director of the NASD Dispute Resolution Midwest Regional Office, joined NASD in 1986 as a staff attorney after serving as an enforcement attorney in the Illinois Securities Department under Secretary of State and future Governor Jim Edgar. He has managed the Midwest Regional Office since January 1990 and has participated in various Dispute Resolution initiatives including staff liaison to the National Arbitration and Mediation Committee on the new injunctions rule. He actively participates as a speaker on dispute resolution before various bar associations and enjoys training new arbitrators.

Rick Berry joined NASD Dispute Resolution in 1995 as a Staff Attorney in the San Francisco Office. He later established and administered the NASD Dispute Resolution satellite office in Los Angeles. A year ago, Rick was promoted to his current position of Director of Case Administration in the New York Office. He brings to his job a zeal for innovation, a focus on providing constituents with excellent customer service, and a commitment to assisting staff members to perform their duties. In the short space of a year, he has already had an enormous impact on the quality of our case administration services.

Barbara Brady, Director of Neutral Management, joined NASD Dispute Resolution in 2000, and holds the same position today. Barbara joined NASD after more than 20 years with the American Arbitration Association. Having spent her entire career in alternative dispute resolution, she is committed to the process and to public service. Since joining NASD, Barbara has developed new and innovative ways to enhance the quality and training of the neutral roster. In fact, she recently received an Excellence in Service Award. She manages her department with professionalism and efficiency, and has developed a strong sense of departmental teamwork.

Rose Schindler, Director of our Southeast Regional Office, joined NASD Dispute Resolution in 1996 as Regional Director for the Southeast Region, and holds the same position today. She brings to her job a strong commitment to excellence and customer service. She recently received an Excellence in Service Award. Together with her staff, she has transformed the Southeast Regional Office into a high-quality performing office.

Shari Sturm joined NASD Dispute Resolution in 1987 as a staff attorney. She worked in the New York Office until December 1992 when she opened the first NASD Dispute Resolution satellite office in Washington, DC. The Office has grown considerably since that time, and now handles over 1,100 cases annually. Shari has been instrumental in developing NASD Dispute Resolution training programs and enjoys training arbitrators. Shari brings to her new position an enthusiasm for the process, an understanding of case management, and a commitment to her staff.

Please join us in congratulating John, Rick, Barbara, Rose, and Shari.

Search for Industry Neutrals for Merrill Lynch Claims Resolution Process Ends

The Administrator of the Merrill Lynch Claims Resolution Process received over 400 inquiries from arbitrators interested in serving as securities industry neutrals in arbitration hearings conducted under the Claim Resolution Process established as part of the settlement of the Cremin v. Merrill Lynch, Pierce, Fenner & Smith Inc. gender discrimination class action. Consequently, the search for securities industry neutrals has ended. For more information on this initiative, see the October 2002 edition of The Neutral Corner.

Arbitration Statistics Through the End of November 2002

Filings through November

2002:   7,081
2001:   6,305
2000:   5,113

Close-outs through November

2002:   5,400
2001:   5,038
2000:   4,940

View additional statistics.

Editor's Note

In addition to your comments, feedback, or questions on the material presented in this publication and other arbitration and mediation issues, The Neutral Corner invites readers to submit articles on important issues of law and procedure relating to mediation, arbitration, or other alternative dispute resolution processes.

Please send your article to Tom Wynn, Editor, The Neutral Corner, NASD Dispute Resolution, 125 Broad Street, 36th Floor, NY, NY 10004. Call the Editor at (212) 858-4392 for editorial guidelines.

Direct Communications Pilot Program Survey

by John C. Barlow, Associate Vice President & Regional Director, Midwest Region,
NASD Dispute Resolution

The National Arbitration and Mediation Committee (NAMC), NASD Dispute Resolution's advisory group, recommended that Dispute Resolution conduct a pilot program to determine whether direct party communications with presiding arbitrators enhance the arbitration process. This article explains the development of the direct communications pilot program. It also highlights the positive results of the NASD survey of the program.

The Midwest Regional Office of NASD Dispute Resolution (Chicago Office) developed parameters for case eligibility in the pilot. To help implement the pilot, the Chicago Office also provided Chairpersons in eligible cases with a modified Initial Prehearing Conference (IPHC) Script and Scheduling Order. The case eligibility parameters follow:

  1. All parties must be represented by counsel;
  2. All counsel and arbitrators must unanimously agree to the direct communication procedures during the IPHC;
  3. Direct party transmissions to the arbitrators may include only those items (e.g., motions to compel and responses), specifically listed by the Chairperson in the IPHC Scheduling Order;
  4. Parties may use regular mail, overnight courier, or facsimile to make direct transmissions to the arbitrators. Parties also may use electronic mail transmissions provided all arbitrators and parties have this capability;
  5. Parties must provide NASD staff with all items directly transmitted to arbitrators, using the same arbitrator transmission method; and,
  6. Parties cannot communicate orally with the arbitrators.

In June 2001, the Chicago Office began the pilot program. During the program, a total of 839 cases were eligible for participation in the pilot. Of these, parties and arbitrators unanimously agreed to the direct communication procedures in 255 cases or in 30 per cent of all eligible cases.

In June 2002, the Chicago Office conducted a survey to ascertain the effectiveness of the one-year project. The survey resulted in a 32 percent return rate, having been sent to 850 party representatives or arbitrators, with a total of 268 responses-75 from party representatives and 193 from arbitrators.

Representatives and arbitrators who filed survey responses expressed affirmative views of direct party communications with the presiding arbitrators. Some of those views are set forth below.

Selected Survey Results

73% of the participant party representatives favored direct party communication with the arbitrators.

69% of the participant arbitrators favored direct party communication with the arbitrators.

NASD Dispute Resolution is studying the conclusions of the Direct Communications Pilot Program Survey for purposes of improving case administration. View survey results.

Question & Answer on Arbitrator Honoraria

Question: I am currently serving on a case that had five more hearings than expected. I think I'm entitled to a greater honorarium than the usual $200 per session. Should I speak to the parties?

Answer: No. It is inappropriate for an arbitrator to discuss his or her honorarium with the parties. Unlike certain other arbitration forums, NASD Dispute Resolution does not charge the parties directly for honoraria paid to the arbitrators. Arbitrators are compensated from forum fees charged to the parties for hearings held under the Code of Arbitration Procedure (Code). The honorarium set forth in the Code is a set rate and not subject to negotiation.

In fact, arbitrators acknowledge and affirm in the arbitrator application that the honorarium due them is set forth in the Code. See the updated NASD Arbitrator Application.


Linda D. Fienberg
NASD Dispute Resolution

George H. Friedman
Executive Vice President
NASD Dispute Resolution

Jean Feeney
Associate Vice President &Chief Counsel

Dorothy Popp
Associate Vice President, Operations

Kenneth L. Andrichik
Vice President,
Mediation & Business Strategies

Barbara L. Brady
Associate Vice President &
Director, Neutral Management

Richard Berry
Associate Vice President &
Director, Case Administration

John C. Barlow
Associate Vice President &
Regional Director, Midwest Region

Elizabeth R. Clancy
Associate Vice President &
Regional Director, Northeast Region

Judith Hale Norris
Associate Vice President &
Regional Director, Western Region

Rose Schindler
Associate Vice President &
Regional Director, Southeast Region

Shari Sturm
Regional Director,
Mid-Atlantic Region

Tom Wynn
Editor, The Neutral Corner

NASD Dispute Resolution Offices

Northeast Region
125 Broad Street
36th Floor
New York, NY 10004-2193
(212) 858-4400
Fax: (212) 509-9041

Mid-Atlantic Region
1735 K Street, NW
Washington, DC 20006
(202) 728-8958
Fax: (202) 728-6952

Southeast Region
Boca Center Tower 1
5200 Town Center Circle
Suite 400
Boca Raton, FL 33486
(561) 416-0277
Fax: (561) 416-2267

Western Region
300 S. Grand Avenue
Suite 900
Los Angeles, CA 90071
(213) 613-2680
Fax: (213) 613-2677

Midwest Region
10 S. LaSalle Street
Suite 1110
Chicago, IL 60603-1002
(312) 899-4440
Fax: (312) 236-9239