- What Is Mediation?
- When Can I Request Mediation During a FINRA, AAA, or JAMS Case?
- Does FINRA Choose the Mediator?
- What Is the Success Rate for Parties Who Decide to Mediate Through FINRA?
- Where/How Is Mediation Generally Held?
- Is Mediation Confidential?
- What Should I Expect From the Mediation Process?
- Will Respondent's Counsel Start out With a Very Low “Demand” Number?
Mediation is an informal route to dispute resolution, which is typically faster and less expensive than litigation or arbitration. Through mediation, both parties have the common goal of reaching a settlement. One main difference from other forms of dispute resolution is that mediation is a voluntary negotiation process, facilitated by an impartial third-party mediator. Three typical arbitration forums for investors are the Financial Industry Regulatory Authority’s (“FINRA”) mediation program, American Arbitration Association’s (“AAA”) mediation program, and JAMS’ mediation forums.
You may request mediation at any point during your arbitration case.
No, the parties can work together in agreeing on a third-party mediator.
According to the FINRA website, the success rate in reaching a settlement is 80%, available at: https://www.finra.org/arbitration-mediation/mediation-overview.
The AAA reported an 85% success rate in 2020.
In a pre-COVID world, mediations were typically held in conference rooms. However, now, there is flexibility in terms of in-person mediation and/or recreating the feeling of in-person mediation, through video applications, such as Zoom.
Yes. Mediation, whether you settle or not, is completely confidential, and the details cannot be discussed with anyone outside of the mediation itself. Further, you cannot discuss your case if it does not settle.
Mediations typically are for one full day (for example, a mediation session may last from 10 a.m. until 5 p.m.). They will usually, but not always, begin with one joint session, including both parties, counsel, and the mediator. Counsel will introduce their clients (you), and the mediator will explain the mediation process as well as relevant confidentiality rules. Then, one party’s counsel will make a “demand” or their starting number. The rest of the day will essentially consist of negotiations between the claimant’s counsel and the respondent’s counsel.
This is very likely as it is their starting point. As the claimant investor, you cannot enter mediation with the expectation that the respondent will make a demand equivalent to or close to your actual losses. This is why both parties engage in negotiation throughout the day, with the goal to end with a number both sides agree to. It is said that in a successful mediation, both sides are a little unhappy; respondents are unhappy they paid as much as they did, and claimants always want more. Our clients, at Malecki Law, have been very successful in mediation and are happy with their results. It is always best to have experienced securities law counsel.