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Large Case Pilot - FAQ

1. What is the Voluntary Program for Large Cases?
On July 2, 2012, FINRA launched a voluntary program for large cases in all regions. The program, which will be targeted at cases involving damages claims of at least $10 million, will allow the parties to have more control over the administration of their case. It allows parties in large cases to agree to change FINRA’s administrative procedures. In participating cases, the parties may agree to different methods of arbitrator appointment, discovery, and hearing facilities, among other things.  FINRA will also assign to these cases a specially trained and experienced case administrator. The case administrator and senior regional staff will hold an early administrative conference with the parties to assist the parties with developing a detailed plan for the administration of the case.

2. Why is FINRA Dispute Resolution developing this program?
FINRA Dispute Resolution (DR) receives many cases that involve very substantial amounts in dispute; we are currently administering approximately 200 cases that seek damages of at least $10 million.  While DR’s rules give the parties flexibility to agree on an ad hoc basis to vary from the procedures in the Arbitration Codes, in response to the increasing number of very large cases we want to introduce a somewhat more formal approach to these cases.  FINRA understands that cases involving large monetary damages may require additional flexibility in their administration. In order for these cases to proceed as efficiently as possible, parties may wish to agree to change FINRA’s established procedures and the method for selecting arbitrators.  FINRA is providing the program to better address these needs. 

3. What procedures can the parties agree to change?
Parties may agree to change FINRA’s procedures for arbitrator qualifications and selection, motion practice, discovery, official record of proceedings, hearing facilities, or explained decisions. Where possible, FINRA will also honor any other agreement by the parties regarding the administration of the case.

4. What claims are eligible for the Program?
The program is targeted at cases involving damages claims of at least $10 million. However, any case can participate in the program where all parties agree and are represented by counsel.

5. Will FINRA contact the parties to solicit participation in the Program?
Yes.  FINRA will identify cases that are candidates for the program once the parties submit their initial pleadings. FINRA will send a letter to the parties in those cases describing the program. A FINRA staff member will contact the parties after sending the letter to discuss the program and answer any questions.

6. How do I sign up for the Program?
All parties must agree in order to participate, and should submit their written agreement to FINRA. This written agreement merely evidences the parties’ intent to participate in the Pilot, but does not formalize their participation. After the administrative conference, all parties will submit a signed stipulation describing the detailed plan for the administration of the case, at which point a party will not be able to unilaterally withdraw from the program.

7. What if I already filed a case that I would like to include in the Program?

If all parties agree and if all parties are represented by counsel, the parties may request to participate in the program.

8. When must the parties agree to participate in the Program?
The parties may agree to participate in the program at any time. However, FINRA strongly suggests that the parties agree before list selection commences to avoid a possible delay in the appointment of arbitrators.

9. Can I rescind my agreement if I no longer wish to participate in the Program?
No.  A party cannot unilaterally rescind his or her agreement to participate in the program once the stipulation is executed. However, if all parties agree in writing, parties may discontinue their participation in the program. If arbitrators have already been appointed, they may choose to withdraw from the case if parties agree to discontinue participation. Parties will remain responsible for any fees already accrued pursuant to the program stipulation.  Parties are also responsible for complying with any contractual provisions entered into with any arbitrator.

10. How are the Program procedures different from the standard FINRA procedures?
After the parties agree to participate in the program, FINRA encourages counsel for the parties to meet and confer regarding their preferences for the administration of the case. FINRA will provide the parties with a Voluntary Program for Large Cases Stipulation form, which may be used to memorialize the agreements of the parties. FINRA will hold an early administrative conference to assist parties with developing a detailed plan for the administration of the case.

11. Who will administer my case if I participate in the Program?
FINRA will assign a specially trained and experienced case administrator to the program case. The parties and arbitrators may contact the case administrator directly with any case-related questions and requests.

12. Do I have to select arbitrators from FINRA’s roster?
No, the parties are free to agree to use arbitrators who are not on the FINRA roster. FINRA staff will reach out to these arbitrators and attempt to secure their participation on your panel.

13. Can parties participating in the Program choose FINRA arbitrators with specific experience or qualifications? 
Yes.  FINRA staff will make every effort to fulfill these mutual requests. Alternatively, the parties are free to identify specific FINRA arbitrators who they would like to use.

14. What options are available for arbitrator selection?
Wherever possible, FINRA will accommodate any party agreement regarding arbitrator selection. For example:

  • Parties may agree to specific FINRA or non-FINRA arbitrators
  • Parties may supply a list of arbitrators for selection
  • Parties may agree to one arbitrator and request that FINRA fill any remaining positions
  • Parties may request lists of arbitrators pursuant to FINRA’s standard procedures
  • Parties may request lists of FINRA arbitrators whose qualifications are tailored to the parties’ needs (for instance, parties may request that all arbitrators be attorneys)

15. How will arbitrators be paid under the Program?
FINRA anticipates that, because of the added demands of a large case, parties will compensate the arbitrators at a higher rate than the customary FINRA honoraria provided in the Codes of Arbitration Procedure. The case administrator will facilitate discussions between the parties and arbitrators to agree on arbitrator compensation specifics such as deliberation time, travel time and other expenses.  Based on the agreement, the arbitrators will submit invoices to FINRA, who will then bill the parties for the amounts in excess of the honoraria provided by the Codes.

16. I anticipate that extensive discovery will be necessary in my case.  Will there be additional discovery options if my case proceeds under the Program?

FINRA understands that large cases may have additional discovery requirements that a smaller case may not have. The parties can agree to use interrogatories, depositions, requests for admissions, or any other discovery method.  The parties can also agree to use a discovery arbitrator whose sole role on the case is to decide discovery issues. As is the case in the appointment of the panel, the parties can use a FINRA arbitrator in this role or can suggest a non-FINRA arbitrator for the role.

17. Can the parties agree to have the hearings at a facility not provided by FINRA?  Are there extra costs for this?

Yes.  Parties may agree to conduct the hearings at an alternative hearing facility. Parties may be interested in using a facility which provides larger conference rooms, separate breakout rooms, copying or fax service and enhanced technology such as Wi-Fi capability and videoconferencing.  The rental costs for the hearing facility and any cancellation fees will be assessed to the parties.

18. Are there any other additional costs associated with participating in the Program?
Yes. FINRA will assess an administrative fee of $1,000 for each separately represented party participating in the program. Additionally, depending on the parties’ agreements, there may be additional costs in the form of arbitrator honoraria.  There may also be other costs including those for additional hearing amenities. These additional services will be discussed and agreed upon during the administrative conference.