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<xTITLE>FINRA DRS Postpones In-Person Hearings Through December 4, but Posts Info on Reopening Plans</xTITLE>

FINRA DRS Postpones In-Person Hearings Through December 4, but Posts Info on Reopening Plans

by George Friedman
September 2020 George Friedman

This article was first published on the Securities Arbitration Alert (SAA) blog, here.

FINRA’s Office of Dispute Resolution Services (“DRS”) has again administratively postponed all in-person arbitration and mediation hearings but has posted  guidance on its plans to resume in-person hearings.

The latest announcement includes hearings through December 4; the previous date was October 30. As was the case before, the September 9 announcement adds: “Please note that postponing a hearing will not affect other case deadlines. All case deadlines will continue to apply and must be timely met unless the parties jointly agree otherwise.” The updated announcement offers fee waivers for stipulated postponement of hearings set for December 7 – December 31. Says DRS: “To avoid postponement fees, parties must provide written notice of the stipulation to adjourn more than 20 days prior to the first scheduled hearing date. Parties stipulating to adjourn in-person hearing dates should also consider stipulating to changing other case deadlines.”

Safety Considerations and a New Chart

The announcement also describes safety considerations for resumption of in-person hearings. DRS: “looks to permit in-person hearings to resume generally, [and] it has partnered with public health experts to develop criteria to help inform whether the public health conditions in a particular hearing location are conducive to safe participation for all…. Another key factor in the resumption of hearings are the requirements of state and local governments regarding activities within their jurisdictions.”  The Authority’s Website now posts a chart, Arbitration & Mediation Hearing Locations (with Scheduled Cases) That Met Public Health Conditions Consistent with CDC Guidance. Thus far, only the Pittsburgh and Syracuse hearing locations have met the CDC standards (ed: Pittsburgh made the October list, but dropped off for November). Why were in-person hearings not resumed? Says FINRA: “FINRA administratively postponed hearings in the locations due to arbitrator concern with participating at in-person hearings at this time, or state and local quarantine orders affecting participants who would need to travel to the hearing locations.”

Process for Resumption of In-Person Hearings and a New Option

DRS has established a procedure for resuming in-person hearings. About six weeks out: “in consultation with public health experts, FINRA will assess the public health conditions in a hearing location and communicate with hearing participants about whether a location’s conditions could  enable the hearing to proceed in-person.” DRS may postpone scheduled hearings: 1) if conditions change for the worse; 2) a participant can’t comply with state and local quarantine or other public health requirements; or 3) “one or more arbitration panel members on the case are unwilling to participate in-person, or if it determines that other circumstances require postponement.” New this month is an option to proceed in-person irrespective of whether DRS has resumed such hearings, specifically: “Note that if all parties and arbitrators agree to proceed in-person based on their own assessment of public health conditions, the case may proceed provided that the in-person hearing participants comply with all applicable state and local orders related to the COVID-19 pandemic.”

Safety Protocol

DRS has also published its protocol for ensuring participant safety (ed: repeated verbatim):

  • Hearings will be held in venues large enough to allow social distancing;
  • Cleaning and sanitizing stations will be provided in each room;
  • Masks will be required for all participants and arrangements will be made to provide masks to participants who do not have them;
  • Separate breakout rooms will be provided for each party with their counsel and the arbitrators so that each group can meet privately and maintain social distancing;
  • Plexiglas dividers or face shields will be provided in the event that testifying witnesses must remove their masks;
  • Each participant will be required to complete a written health questionnaire certifying that they have not tested positive for COVID-19 and do not have symptoms related to COVID-19, and to the best of their knowledge, they have not been exposed to someone who has tested positive for or shown any symptoms of COVID-19 within the two weeks preceding the hearing; and
  • Participants will be provided with information on best practices for traveling and staying in hotels under current circumstances.

(ed: *We’re again not surprised about the shifting postponed hearing date. **Virtual hearings via Zoom remain an option. ***Kudos to FINRA for clear communication and proactive thinking. ****We correctly predicted that in-person hearings would resume on a rolling basis.)



George H. Friedman is the publisher and Editor-in-Chief of the Securities Arbitration Alert, a weekly online publication covering the latest developments in financial services arbitration and mediation. He is also the principal of George H. Friedman Consulting, LLC, providing expert advice on arbitration and mediation in general and the FINRA dispute resolution forum in particular.

He is former Executive Vice President - Dispute Resolution of the Financial Industry Regulatory Authority (“FINRA”), a position he held through January 2013. He held the same title at NASD, which consolidated with NYSE Member Regulation to form FINRA in 2007. In this capacity, he was in overall charge of FINRA's dispute resolution program, carried out by the company's four regional offices and 72 hearing locations in the United States and abroad, 200 employees, and an annual budget of $50 million. He also served as Secretary of the Securities Industry Conference on Arbitration. He has been referred to by the U.S. Court of Appeals—4th Circuit as a “leading arbitration expert.” He is a member of the American Arbitration Association's National Roster of Neutrals.

Mr. Friedman is an Adjunct Professor of Law at Fordham Law School, where he has taught a course on alternative dispute resolution since 1996. He is Chairman of the Board of Directors of Arbitration Resolution Services, Inc. of Coral Springs, Florida. Arbitration Resolution Services is an innovative online arbitration services company facilitating an affordable alternative to costly courtroom litigation and in-person arbitration for resolving Business-to-Business, Business-to-Individual, and Vehicle and Property Damage disputes. ARS is unique in that its entire process can be completed online through the company website.

In his extensive dispute resolution career, he previously held a variety of positions of responsibility at the American Arbitration Association, most recently as Senior Vice President from 1994 to 1998. He joined NASD in 1998 as Senior Vice President of NASD's Dispute Resolution Division, and was named Executive Vice President in 2002.

Mr. Friedman received a B.A. in Political Science from Queens College, and a Juris Doctor from Rutgers Law School - Newark, where he was an editor of the Law Review. He is admitted to the New York and New Jersey Bars and the United States Supreme Court, and is a Certified Regulatory and Compliance Professional. Mr. Friedman is a member of the Securities Experts Roundtable, and of several bar associations. He is past chair of the Committee on Alternative Dispute Resolution of the New York County Lawyers Association. He is a member of the Banking Advisory Committee of Bergen (NJ) Community College.

Mr. Friedman has lectured extensively on the subject of alternative dispute resolution, and has the distinction of being one of the architects of the American Arbitration Association’s Due Process Fairness Protocols for both employment arbitration and health care dispute resolution, and assisted in creating the Consumer Due Process Protocol. He has published often, with articles appearing in the Securities Arbitration Commentator, the ABA's Dispute Resolution Magazine, the New York Law Journal, the Rutgers Law Review, and the National Law Journal. He has blogs at Arbitration Resolution Services, Inc., the Securities Arbitration Commentator, and the World Future Society, among others.

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