The Difference Between a FINRA Arbitration and a FINRA Mediation

Soreide Law Group is often involved in both mediations and arbitrations, and are asked quite frequently what the difference is between the two. Below is a brief summary on what FINRA considers an arbitration and a mediation.

An arbitration is adjudicated which is a legal process by which an arbitrator reviews evidence and argumentation including legal reasoning set forth by opposing parties or litigants and comes to a decision which determines rights and obligations between the parties involved. The arbitrators control the outcome and they are given the power to decide. Their decision is final and binding. During the arbitration there is often extensive discovery required and the parties present their case and testify under oath. The arbitrator listens to the facts and evidence and will render the win/lose award. This process is formal with the attorneys controlling the participation. The arbitrator's decision is based on the facts, evidence and the law. An arbitration is more expensive than a mediation but not as expensive as traditional litigation. The arbitration is private but the decisions are made available to the public.

In a mediation the process is expedited with the parties controlling the outcome. The mediator has no power to decide, and the settlement is given only with party approval. The mediation is informal and the parties are active participants exchanging information that will help assist in reaching a resolution. This exchange of information is voluntary and is often limited. The parties are able to vent their feelings and engage in problem solving. The meetings are joint and private between individuals and their attorneys. The outcome is based on the needs of the parties and the results are mutually satisfactory. A mediation is low cost. The mediation remains private and confidential.

The Soreide Law Group represents investors nationwide before FINRA the Financial Industry Regulatory Authority. If you sustained losses due to your stock broker or financial advisor’s recommendations call 888-760-6552.