Option To Choose All Public Panel Effective Immediately
The Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 11-05 on February 1, 2011, stating that effective immediately customers in FINRA arbitration have the option to choose an all public arbitration panel in all cases with three arbitrators. The amended Code of Arbitration Procedure will now allow customers with claims over $100,000 to choose between two panel composition methods. The first method, called the composition rules for majority public panel, is the traditional composition used before the amendment which provides for a panel comprised of a chair-qualified public arbitrator, a public arbitrator and a non-public arbitrator. The second method, called the composition rules for optional all public panel, allows for any party to select an all public arbitration panel. FINRA believes that this option to exclude a non-public arbitrator from the panel deciding a customer’s case will enhance the perception of fairness in the arbitration process.
Under the New Rule 12403, the customer must elect in writing which method they wish to proceed under within 35 days after the service of the statement of claim. If the customer fails to make an affirmative election by the 35 day deadline, FINRA will apply the traditional rule for a majority public panel.