Office of Dispute Resolution Launches the Single Arbitrator Pilot Program
Amy E. Hyland (202) 728-8304
Washington, DC – NASD Regulation, Inc., today announced that the Office of Dispute Resolution’s Single Arbitrator Pilot Program will officially be available to parties who seek to arbitrate in the NASD forum beginning May 15. Approved by the Securities and Exchange Commission (SEC) in February, the Arbitration Pilot is a two-year, voluntary program that will allow parties with claims between $50,000.01 and $200,000 to choose one arbitrator, rather than a three-person panel, to decide a case.
"I am delighted that the Single Arbitrator Pilot will be available to forum users, starting next week. This Pilot will result in lower arbitration fees and should afford a quicker resolution of arbitration claims. To ensure the creation of the most well-rounded program, we sought feedback from the Public Investors Arbitration Bar Association (PIABA), the Securities Industry Association (SIA), and the Small Firm Advisory Board of the NASD. Their input has helped shape a program that will enhance the dispute resolution process for all parties," said Linda D. Fienberg, Executive Vice President, NASD Regulation Office of Dispute Resolution.
The Single Arbitrator Pilot will improve the efficiency of communication between parties and also lower the cost of the arbitration process. Under the Pilot, parties may send written materials – including discovery requests and motions – directly to the arbitrator as long as all parties and the Office of Dispute Resolution are provided materials simultaneously. This is a change from the current Code of Arbitration Procedure, which requires parties to send any materials to arbitrators through the Office of Dispute Resolution. In addition, hearing session fees have been reduced in the Pilot Program to reflect the lower arbitrator honoraria.
Parties that participate in the Pilot will receive a list of 15 arbitrators generated by the Neutral List Selection System (NLSS), the Office of Dispute Resolution’s computer-based arbitrator selection system. Upon narrowing the list to three arbitrators, the parties can decide if they would like a single arbitrator and will then have 15 days to agree on which of the three selected arbitrators will hear the case. Cases involving claims of more than $50,000 are usually heard by three arbitrators. The dollar threshold for the Pilot includes attorneys fees, interest and other costs, but does not include filing fees, hearing session fees, member surcharges, and member processing fees. All claims, including counterclaims, third-party claims, and cross-claims, must be contained within the $200,000 limit. A party seeking punitive damages may only do so under the Pilot if both parties agree, and if all claims do not exceed $200,000. The Pilot program is not available to parties who are seeking the resolution of intra-industry or employment disputes.
Investors can obtain more information about NASD Regulation as well as the disciplinary record of any NASD-registered broker or brokerage firm by calling (800) 289-9999.
The NASD Regulation Web site also offers an area dedicated to information on arbitration and mediation. This area provides investors with the Code of Arbitration Procedure, the most recent dispute resolution rule filings, instructions on how to become an arbitrator or mediator, an on-line form for submitting mediation claims, newly approved rules and frequently asked questions (FAQs) about those rules. In addition, the Site provides the phone numbers and addresses for all of the regional Dispute Resolution offices.
NASD Regulation oversees all U.S. stockbrokers and brokerage firms. NASD Regulation, The Nasdaq Stock Market, Inc., and the American Stock Exchange® are subsidiaries of the National Association of Securities Dealers, Inc. (NASD®), the largest securities industry self-regulatory organization in the United States.