Compliance and Regulatory Alerts  |  03-30-22

FINRA Proposes Rule to Speed Up Arbitration for Seriously Ill or Elderly Claimants

FINRA Proposes Rule to Speed Up Arbitration for Seriously Ill or Elderly Claimants

In an effort to ensure that seriously ill or are elderly claimants are able to “participate meaningfully” in FINRA arbitration proceedings, FINRA proposed amendments to the Code of Arbitration Procedure to accelerate certain case processing deadlines. Under the proposed rule, parties to the proceeding must request the expedited deadlines.

Under its existing program, FINRA can accelerate certain processes, such as arbitrator selection, scheduling, and executing the final awards, on a voluntary basis. Currently, FINRA does not provide for “shortened, rule-based processing deadlines for parties” or offer any related guidance. FINRA determined that its current program “has not resulted in meaningfully shortened case processing times.”

Under the proposed rule, claimants 75 years or older, or those who certify to a “medical diagnosis and prognosis” and reasonably believe that an “accelerated processing is necessary to prevent prejudicing their interest,” can request a determination by the Director of Dispute Resolution to shorten the time it takes to complete the arbitration. If approved, the timeframe for completion of the process, which includes discovery, motions, hearings, and the award, would be set at 10 months or less. Deadlines for each part of the process would be  reduced (e.g. time allowed for serving an answer reduced from 45 days to 30 days).

FINRA requested comments on all aspects of the proposal and prompted responses with specific questions for arbitrators concerning their practical experiences. Comments are due May 16, 2022.

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