For most people, the arbitration process is uncharted waters. You may be wondering: How do I even get started? What forms and fees are required? How long will this take?
This guide will walk you through the key steps of filing a FINRA arbitration claim, from drafting your statement of claim to participating in hearings. We’ll also share tips to help you file a compelling claim and avoid common missteps along the way.
Whether you have an investment-related dispute with a brokerage firm or disagree with a business partner, understanding the arbitration process is crucial to advocating for your rights. Let’s dive in.
An Intro to Arbitration: Your Alternative to Court
First things first – what exactly is arbitration? Think of it like going to court with some key advantages:
- It’s faster – Arbitration usually resolves cases within a year, while litigation drags on.
- It’s more affordable – Attorney fees and other costs are lower for arbitration.
- It’s private – Unlike public court records, arbitration keeps the dispute confidential.
- It’s less complex – The rules and procedures are simpler without all the red tape.
With arbitration, an impartial third-party arbitrator reviews arguments from both sides and makes a final, binding decision. This is instead of a drawn-out battle in court.
Arbitration offers a more efficient way to settle disputes outside of court. But every case has its own needs. We always recommend consulting a lawyer to decide if arbitration or mediation better fits your situation.
Now, let’s walk through the step-by-step process to file an arbitration claim.
Step 1: Draft and File Your Statement of Claim
The statement of claim initiates arbitration proceedings and lays out your position. Think of it as telling your side of the story.
You’ll want to succinctly explain:
- Background facts on your relationship with the other party
- What events or agreements led to the dispute
- Exactly how the other party caused you harm
- What specific relief or damages you are seeking
Support your statement with any evidence or relevant documents. But keep focused on the most pertinent details. You’ll have a chance to provide additional support later on.
Once your statement of claim is polished, you’ll submit it to the arbitration institution along with administrative fees to open a case.
Step 2: The Respondent Provides an Answer
After you serve notice to the other party (known as the respondent), they will have a chance to reply to your statement of claim by submitting an answer.
The answer allows them to admit, deny, or provide additional context around your version of events. They may also make counterclaims alleging you are liable.
This initial exchange of perspectives kicks off the adversarial arbitration process.
Step 3: An Arbitrator is Appointed
Now that both sides have outlined their positions, it’s time to appoint the neutral party who will decide the case.
In some cases, an arbitration institution provides a default process for selecting qualified arbitrators based on background and expertise.
However, parties can also agree on an arbitrator mutually acceptable to both sides. The key is finding someone fair and competent to weigh the evidence.
Once an arbitrator is chosen, they will work with the parties to establish procedural rules and deadlines. This helps set clear expectations upfront.
Step 4: Discovery Commences
During the discovery phase, the parties exchange relevant information and documents to prepare for hearings.
You may submit requests asking the respondent to provide materials that support your claims. They can do the same regarding any counterclaims against you.
Discovery enables you to strengthen your case and anticipate arguments the other side might make. It prevents any trial by ambush at hearings down the road.
Step 5: Pre-Hearing Conferences Clarify Issues
As you get closer to presenting your case, pre-hearing conferences allow the arbitrator to identify points of agreement and narrow down remaining issues.
These meetings provide an opportunity to discuss logistics like the schedule for hearings and the scope of testimony and evidence allowed.
Pre-hearing conferences keep the proceedings focused and organized. They help avoid wasting time on irrelevant arguments.
Step 6: Make Your Case in Arbitration Hearings
The hearing is your chance to make arguments, present evidence, question witnesses, and respond to the other party’s claims.
During the hearing, the arbitrator will assess credibility and weigh facts to reach a final binding decision.
Hearings often feel less formal than court. But you still need to bring your A-game when presenting your case. Thorough preparation and strategic thinking are key.
Step 7: The Arbitrator Issues an Award
Finally, after carefully reviewing all the evidence and legal arguments, the arbitrator will make a decision known as the arbitration award.
The award delivers resolution by addressing submitted claims and assigning responsibility for any damages. This becomes a legally binding outcome that can be enforced through the courts if necessary.
And with the arbitrator’s decision, the alternative dispute resolution process comes to a close.
Tips for Filing a Successful Arbitration Claim
Now that you understand the standard arbitration process, let’s look at some tips to help you pursue a strong claim:
Organize Supporting Documents and Evidence
Start pulling together any emails, contacts, notes, or expert analyses backing up your allegations. These documents will bolster your statement of claim.
Make copies of evidence to share through discovery. And be ready to explain how each document fits into your overall narrative.
Know the Rules and Procedures
Carefully review the arbitration institution’s rules and procedures. Every forum has its own practices. So, read the guidelines closely.
Missing deadlines or making procedural mistakes could undermine your case down the road. Do your homework upfront.
Send Notices and Documents by the Book
Follow notification requirements to a T when serving the statement of claim. Sloppiness won’t cut it.
Likewise, take protocol seriously during discovery and information exchanges. You want your documents and actions to hold up through hearings.
Remain Solution-Focused
Of course, your goal is a favorable outcome. But don’t lose sight of reaching a fair resolution and putting the dispute behind you.
Maintain realistic expectations, collaborate where possible, and stay flexible. This constructive mindset serves you well.
Pick Arbitrators Carefully
Research arbitrator backgrounds and experience. Does their expertise align with the substance of your dispute?
Look for seasoned professionals who instill confidence in their judgment and impartiality. They carry a lot of weight.
Work with Experienced Legal Counsel
An attorney well-versed in arbitration can help avoid procedural pitfalls and strengthen your case theory.
They will know how to admit compelling evidence, question witnesses effectively, and anticipate the respondent’s tactics.
Do You Need Help Fighting an Arbitration Claim?
Hopefully, you now have a better understanding of the arbitration process and its many moving parts. But don’t just take our word for it. Reach out to the compliance team at My RIA Lawyer to learn more and get your questions answered.
Their team of seasoned attorneys provides strategic FINRA arbitration defense, and they’re always happy to offer an initial consultation to review your case details and provide an honest take. Whether arbitration, mediation or another approach, their goal is to find the smartest path forward.
Don’t stay stuck at step one. Get the legal expertise you deserve. Visit My RIA Lawyer online today at https://www.myrialawyer.com/.