Simplified Arbitrations

Three Ways to Present Your Case to Arbitrators

Public customers under the Customer Code of Arbitration and claimants under the Industry Code of Arbitration (Codes) in which the amount in dispute is $50,000 or less (not including interest and expenses), can choose one of three ways to present their case to an arbitrator. All provisions of the Codes apply to these cases, except where noted.

If no hearing is requested, an arbitrator will decide the case based on the parties’ pleadings and other written submissions. These cases are also referred to as “paper” cases because an arbitrator makes a decision based solely on the documents submitted.

  1. No Hearing - Arbitrator Decides Case After Reviewing Parties’ Written Submissions

    If no hearing is requested, an arbitrator will decide the case based on the parties’ pleadings and other written submissions. These cases are also referred to as “paper” cases because an arbitrator makes a decision based solely on the documents submitted.

  2. Special Proceeding

    A Special Proceeding provides an abbreviated hearing by video that incorporates many aspects of a standard arbitration hearing. However, Special Proceedings differ from regular hearings in the following ways:

    • An arbitrator will hear the case by video conference unless the customer (in a customer case) or claimant (in an industry case) requests at least 60 days before the first scheduled hearing that it be held by telephone, or all parties agree to another type of hearing;
    • Claimants, collectively, and respondents, collectively, each have two hours to present their cases and one-half hour for rebuttal and closing statements;
    • The hearing will be completed in one day with no more than two hearing sessions;
    • The parties may not question an opposing party’s witnesses;
    • The parties may not call an opposing party as a witness.

    For more detailed information about Special Proceedings, please see Regulatory Notice 18-21.

    If a party wishes to have interpretation services at the hearing, generally, the requesting party will be responsible for arranging the service and any related costs. A party experiencing financial difficulties can submit a request for a waiver of interpretation services fees to their arbitration case administrator no later than 60 days before the video conference. If the waiver is granted, FINRA will be responsible for arranging interpretation services and the cost of the interpreter. For more information about requirements for a waiver request, please see: Fees.

  3. Regular Hearing

    The parties and arbitrator will follow the regular provisions of the Code of Arbitration Procedure and appear at an in-person hearing. With regular hearings there are no limits on the length of a hearing, questioning an opposing party’s witness or calling an opposing party as a witness. For more information about the process, please see: FINRA’s Arbitration Process.

Important Note: If a public customer or claimant under the Codes does not expressly choose either a Special Proceeding or Regular Hearing, an arbitrator will decide the case based on parties’ pleadings and other written submissions. For a complete discussion of an arbitrator’s responsibilities during a Special Proceeding, please watch this short video:

 

Timeline

On average, simplified cases considered on the papers are decided substantially faster than standard hearing cases. For current case processing times, please see our Dispute Resolution Statistics webpage.

Fees

Claimants must submit filing fees at the time of filing the Statement of Claim or request a hardship waiver. The amount of this fee is based on the total amount of the claim including any punitive and treble damages but excluding interest and expenses. Filing fees for Simplified Cases range from $50 to $600 depending on the size of the claim. To determine the filing fee please use FINRA’s Arbitration Filing Fee Calculator. Parties who choose to have an arbitrator decide their case based on written submissions, without an in-person hearing, will not incur any hearing fees.

Parties experiencing financial difficulties can request a waiver of fees. FINRA requires a party to send documents to support his or her hardship request, such as tax returns, bank records, pay stubs or other evidence of financial hardship. If a party is unable to provide these documents, he or she may submit an affidavit attesting to financial hardship. For more information, please see: Arbitration Fee Waivers. 

Discovery

  • Customer Cases

    The parties may request documents and other information from each other under FINRA Rule 12800. All requests for the production of documents and other information must be served on all other parties, and filed with FINRA, within 30 days from the date that the last answer is due. Any response or objection to a discovery request must be served on all other parties, and filed with FINRA, within 10 days of receipt of the discovery request.

    FINRA Rule 12505 provides that parties must cooperate to the fullest extent practicable in the exchange of documents and information to expedite the arbitration. Failure to cooperate in the exchange of documents and information as required under the Code may result in sanctions. The arbitrator will resolve any discovery disputes.

    FINRA provides the Discovery Guide for customer cases only, which outlines documents that the parties should exchange without arbitrator or staff intervention. The Discovery Guide contains two document production lists. The document production lists in the Discovery Guide as described in FINRA Rule 12506 do not apply to simplified arbitrations decided on the papers or decided by special proceeding. However, if a customer requests a regular hearing pursuant to FINRA Rule 12800(c)(3)(A), the regular provisions of the Code, including the Discovery Guide, apply. If a party is unsure what to expect during the discovery process, the Discovery Guide is a helpful reference to manage expectations regarding documents the other party might request.

    For more information on discovery, please see our Discovery webpage.

  • Industry Cases

    The parties may request documents and other information from each other under FINRA Rule 13800. All requests for the production of documents and other information must be served on all other parties, and filed with FINRA, within 30 days from the date that the last answer is due. Any response or objection to a discovery request must be served on all other parties, and filed with FINRA, within 10 days of receipt of the discovery request.

    FINRA Rule 13505 provides that parties must cooperate to the fullest extent practicable in the exchange of documents and information to expedite the arbitration. Failure to cooperate in the exchange of documents and information as required under the Code may result in sanctions. The arbitrator will resolve any discovery disputes.

    For more information on discovery, please see our Discovery webpage.

Increases in Amount in Dispute

If any party to a simplified arbitration increases the amount in dispute to more than $50,000, the arbitration will no longer be administered under this rule, and the regular provisions of the Code will apply.

View the following resources for additional information: