More Commentary on Industry Arbitration
There’s a timely article up at Bloomberg regarding the ongoing back and forth between the securities industry and claimants’ bar regard the fairness of mandatory industry arbitration. The article cites the recent survey on claimant perceptions of arbitration fairness commissioned by the Securities Industry Conference on Arbitration ("SICA"), and conducted by the Investor Rights Clinic at Pace University Law School.
The SICA survey, together with a to-be-expected rebuttal piece from SIFMA, point out the sharp differences in perception regarding whether the current arbitration system is fundamentally biased toward firms. The SICA survey pointed to, for example, the declining numbers of hearings ending in awards, as well as the increasing number of early settlements. Does this show that the system is increasingly stacked against investors? Does it indicate, rather, that firms identify meritorious cases and settle, rather than defend through a hearing? Can any generalizations be drawn about the large number of industry and public arbitrators, other than that every lawyer and firm in this area – whether on the claimant or defense side – has had both fair results and real head-scratchers.
One thing is clear: both investors’ groups and state regulators will continue to push FINRA to make its arbitration forum more investor-friendly – or to eliminate mandatory arbitration entirely.
Forgive my ignorance, but isn't it accurate that there is no publically available list of arbitrators? Thus if you are thinking about arbitration you have almost no idea of the kind of people who will hear your case?
True, you get a tiny list of candidates later in the process; but on what basis can you object if you think other arbitrators might be worse? This is particularly true, I think, now that Industry arbitrators who have served a couple of years suddenly become "public" in what most certainly be the most magical transformation since Cinderella.