November 29, 2010
The ability of parties in a FINRA arbitration to choose an all-public panel can only enhance the credibility of FINRA arbitrations, result in fairer awards and the perception of fairer awards, and increase the viability of the arbitration process itself. Unless FINRA takes very active steps, like this one, to make its form of arbitration truly superior to others (e.g., JAMS, AAA), as objective as reasonably possible, and flexible enough to reduce the current widespread impression of its industry-partiality (whether true or not), FINRA arbitration will be Balkanized or emasculated altogether. Due to its volume of cases, FINRA has the opportunity to prevent this, and to become a true leader in providing modern, cost-effective, timely dispute resolution of complex matters. It should do everything possible to modernize and empower the process, including making the arbitrator selection process as transparent, fair, and informational as possible.
This step is a major move in that direction.