FINRA Announces Voluntary Large Case Pilot Program to Provide Greater Flexibility in Case Administration

On July 2, 2012, the Financial Industry Regulatory Authority (FINRA) launched a voluntary large case pilot program in all regions for cases involving damages claims of at least $10 million.  This pilot program formalizes the previous ad hoc flexibility that parties had to deviate from administrative procedures under the Arbitration Code.   The large case pilot program is intended to improve the efficiency of processing these cases by permitting parties to agree in advance to changes in FINRA procedures for arbitrator qualifications and selection, motion practice, discovery, official record of proceedings, hearing facilities, or explained decisions.

FINRA will identify cases that are candidates for the pilot program after the parties have submitted their initial pleadings.  Cases that have already been filed may request to participate in the pilot program provided that all parties agree to participation and are represented by counsel.

Counsel for parties agreeing to participate in the large case pilot program will be encouraged to meet and confer regarding their preferences for the administration of the case.  FINRA will hold an early administrative conference to assist parties with developing a detailed plan for case administration and will provide the parties with forms to memorialize their agreements.

Under the large case pilot program, the parties may request FINRA arbitrators with specific experience or qualifications, or agree to use arbitrators who are not on the FINRA roster.  FINRA staff will reach out to these arbitrators and attempt to secure their participation on your panel.  The parties can also agree to use interrogatories, depositions, requests for admissions, or any other discovery method.  The parties may mutually request a discovery arbitrator whose sole role on the case is to decide discovery issues. The parties can use a FINRA arbitrator in this role or can suggest a non-FINRA arbitrator for the role.  Finally, under the large case pilot program, parties may agree to conduct the hearings at an alternative hearing facility to satisfy their requirements for larger conference rooms, separate breakout rooms, or enhanced technology.

FINRA will assess an additional administrative fee for each separately represented party participating in the large case pilot program.  Additional costs resulting from the parties’ agreements will be discussed and agreed upon during the administrative conference.

Should you have any questions relating to FINRA or arbitration issues generally, please do not hesitate to contact Attorney Joseph C. Maya in the firm’s Westport office in Fairfield County at 203-221-3100 or at JMaya@Mayalaw.com.