October is FINRA Mediation Settlement Month

During Mediation Settlement Month, FINRA is reducing their standard mediation fees and costs in order to promote the benefits of mediation. As a longtime securities arbitration lawyer, I am a big supporter of mediation to resolve FINRA securities arbitration claims. The more successful attorneys that I know spend more face-to-face time with mediators than they do before actual arbitrators. With the assistance of a good mediator, even parties that appear to have irreconcilable differences stand a fair chance of reaching a settlement. According to FINRA, 80% of the cases that go to mediation are settled—but this assumes everyone involved is willing to make some compromises.

As part of FINRA’s Mediation Settlement Month promotion, parties who agree to mediation by October 31st and conduct their mediation by December 21st will get a discount on FINRA’s mediation fees. For detailed information, click here to see FINRA’s Mediation Settlement Month flyer.

When is the Best Time to Mediate?

Mediation can occur at any time—even before a securities arbitration claim has been filed. In my experience, parties usually wait until after a claim has been filed and both sides have had a chance to conduct discovery before entertaining mediation. In more contentious cases, the parties may not even consider mediation until very close to the arbitration hearing date.

FINRA Mediation vs. Private Mediation

FINRA’s Mediation Settlement Month promotion is a very effecient way to mediate a case—especially when it involves a non-complex case with an amount in controversy less than $100,000. However, FINRA-sponsored mediation is not the only game in town. Parties can also pursue private mediation and use any mediator that they can mutually agree upon. Private mediation gives the parties greater latitude over the mediation process. For larger and more complex cases, private mediation may be a better alternative.

To sum it all up:

  • Mediation is faster and less expensive than arbitration or litigation.
  • Although the mediation success rate is quite high, parties do not give up any right to arbitrate or litigate their claims if they cannot reach a settlement.
  • FINRA-sponsored mediation is a cost-effective solution, but private mediation may be a better choice for larger more complex cases.
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