FINRA proposal to accelerate arbitration case processing in some circumstances

The Financial Industry Regulatory Authority, “FINRA” operates the largest arbitration forum in the United States for the resolution of disputes between customers and member firms, as well as between brokerage firm employees and their firms.

FINRA is proposing to add a new rule to the Code of Arbitration Procedure to allow any party to request accelerated processing of an arbitration proceeding if they: (1) are at least 75 years old; or (2) certify that they have received a medical diagnosis and prognosis, and that based on that information they have a reasonable belief that accelerated processing is necessary to prevent prejudicing their interest in the arbitration. Regulatory Notice 22-09.

The Director of Dispute Resolution Services would make an objective determination as to whether the requesting party is at least 75 or has submitted the required certification. If the Director determines that the requesting party qualifies for accelerated processing, the proposal would shorten the timeframe to complete the arbitration as follows:

• Turnaround Time. The proposal would provide that a panel in an accelerated case shall endeavor to render the award within 10 months or less and set discovery, briefing and motions deadlines, and schedule hearing sessions, consistent with doing so.

• Serving an Answer. The proposal would shorten the deadline for an answer to a statement of claim from 45 to 30 days.

• Responding to a Third-Party Claim. The proposal would shorten the deadline for a response to a third-party claim from 45 to 30 days.

• Completing Arbitrator Lists. The proposal would shorten the deadline to return the ranked arbitrator lists to FINRA staff from 20 days to 10 days.

• Discovery in Customer Cases. The proposal would shorten the deadline to produce documents listed in Production Lists in customer cases from 60 days to 35 days.

• Other Discovery Requests. The proposal would shorten the deadline to respond to requests for other information or documents from 60 days to 30 days.

The current provisions of the Code authorizing the panel to rule on a party’s objection to producing a requested document or information, extend or modify any deadline upon motion of a party, and decide discovery-related motions would still apply under the proposal, and would allow the panel to modify the default discovery deadlines under the proposal.