AboutTimmy Chou Expertise I am a experienced Mediator and a partner in a management consulting firm. As a mediator I work as a third-party neutral and specialize in partnership/shareholder disputes, management/labor issues, company culture difficulties, and family-owned business problems. I can help describe why alternative dispute resolution may be a good choice for you. As an experienced management consultant I may be able to offer creative ideas to help resolve your organizational and business problems and disputes. "If you say conflict, I say opportunity".
Question Do you do arbitratiions for the NASD? What is your opinion of this system where the National Association of SECURITIE DEALERS picks the forum where investors arbitrate. Is there a way to find out who arbitrators are without first filing an arbitration? Is it a stacked deck? They say investors win 50% but they mean in 50% of the cases investor gets at least a dollar when the dispute may be over thousands. That's not clearly a "win" is it?
Answer Thank you for your question!
Mediators act as neutral third parties to disputes and never "get involved" in judging the merits of conflict, but merely use special techniques to help the parties decide how to negotiate their own settlement.
I do not have personal experience with the NASD from a dispute resolution perspective, but I do know a few things that may be helpful. First, though the NASD has set up the "forum" and created the structure to conduct these resolutions, the model used is patterned after the very successful model used by the AAA, government and other bodies. There is fair reason to trust that the process is not flawed. Also, the arbitors and mediators are not employees of the NASD and are governed by serious ethics rules dictated by our professional associations and state licensing laws.
I am not certain but typically the assignment of an arbitor is first considered on the basis of case content and then by random selection. This is typical and I would expect it to be followed at NASD.
Winning is another matter. Arbitrations are frequently a compromise. Perhaps a claimant may take home only a dollar in a particular case, and he might even have a rock solid case. However, after the costs and time of litigation are considered, he may still be a dollar ahead of a protracted litigation. These are not always probabilities that can be easily calculated.
I do not believe any party is required to accept an arbitrated settlement (but I could be wrong) and can always litigate if desired.
You can check with the AAA or www.acrnet.org to get more information. It may be possible to speak with an arbitor and get a better sense of the typical process.
These are some ideas. Feel free to follow up with additional questions.
The pros and cons of the types of resolution methods follows.
GOOD LUCK!
Arbitration, Mediation, and Litigation
Arbitration: the referral of a dispute to one or more impartial persons for final and binding determination outside of the judicial system
Benefits of Arbitration:
Confidential, no public record
Limited exchange of documentation, information
Quick, don’t have to wait for a court date
Arbitrators have expertise in the subject matter and are trained in conflict resolution
Cheaper than litigation
Preserves business relationships
Negatives of Arbitration
It’s a compromise, no %100 winner
Complex arbitration can be costly
If not satisfied, may litigate the arbitration procedure
Poor results with an unskilled arbitrator
Both parties must agree to cooperate in the process
Mediation: the process by which parties submit their dispute to a neutral third party (the mediator) who works with the parties to reach a settlement of their dispute.
Benefits of Mediation:
Neutral mediator can objectively suggest alternatives not considered before
Parties are directly engaged in negotiating the settlement
Can be quicker than litigation
Less costly than litigation
Preserves business relationships
85% of American Arbitration Association cases mediated find successful solutions
Negatives of Mediation
may not reach a binding decision
unskilled mediator
Litigation: using the judicial system to resolve disputes
Benefits of litigation:
a clear winner and loser
uses a prescribed set of procedures
more predictable outcomes
is final
Negatives of Litigation:
waiting for court dates can do more harm
usually more expensive than mediation and arbitration
part of the public record
