Recently, the Financial Industry Regulatory Authority (“FINRA”) launched a new pilot program offering parties in small claims cases free or low-cost telephone mediation. This program is voluntary and open to all cases involving claims of $50,000 or less.
According to FINRA, mediators would serve on a pro bono basis on cases involving claims of $25,000 or less in damages. There would also be a “reduced-fee” mediation cost ($50 per hour) on cases with damage claims between $25,000.01 and $50,000. Furthermore, FINRA says it will not charge any administrative fee for these cases.
FINRA has long provided a forum for arbitration resolution for industry disputes involving broker-dealers. Additionally, FINRA has recently opened its arbitration forum to registered investment advisers as well (more information on this at JLG’s blog posting dated October 26, 2012). With this move, FINRA believes that this lower-cost alternative will benefit dispute resolution forum users by eliminating the travel and preparation costs typically associated with in-person mediation, provide greater convenience and flexibility, and is a practical alternative for all parties involved. Parties interested in participating in the pilot can notify FINRA by visiting www.finra.org/arbitrationmediation/smallclaims.
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