On January 16, 2013, FINRA announced the launch of a new pilot program designed to reduce costs of mediation for cases that qualify under FINRA’s simplified arbitration process, specifically, cases involving claims under $50,000. Under the new program, which began on January 15th, the costs of mediation would be substantially reduced in a number of respects:
- For claims under $25,000, mediators in FINRA’s program will provide pro bono services, which means they will not charge a fee for their service.
- For claims between $25,000 to $50,000, mediators participating in FINRA’s program have agreed to reduce their standard fee to $50.00 per hour.
- FINRA will not charge any administration fee for these cases.
- The mediation would take place telephonically, eliminating travel expenses for the mediator and the parties.
Linda Fienberg, President of FINRA Dispute Resolution, stated, “Telephone mediation is a lower-cost alternative, and would benefit dispute resolution forum users in many ways. Besides eliminating the travel and preparation costs typically associated with in-person mediation, telephonic mediation offers greater convenience and flexibility, and is a practical alternative for all parties involved.”
While the efficacy of telephonic mediation remains to be seen, FINRA is certainly trying to make its dispute resolution process for small claims faster and less expensive. Last year, FINRA raised the threshold for its simplified arbitration process from $25,000 to $50,000. Under FINRA’s simplified arbitration procedure, investors’ arbitration claims are decided by a single arbitrator without a hearing; the arbitrator makes a decision entirely on the parties’ written submission. The new telephonic mediation program will provide small claims investors with another avenue to resolve their claims at substantially reduced costs. For more information on FINRA’s new pilot program, click here: http://www.finra.org/ArbitrationAndMediation/Mediation/Process/P197659