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The mediation of securities brokerage disputes is a newly emerging
approach which has gained considerable interest over the past several
years. The mediation of a securities brokerage dispute involves the
selection of a single mutually acceptable mediator who would devote time
and experienced mediation skills towards an effort to resolve a customer
dispute through intensive discussion and negotiation sessions With the
clients and attorneys on both sides of a customer dispute.
Mediation services are available under the auspices of the National
Association of Securities Dealers, Inc., as well as through a number of
private mediation services. Typically, mediators are experienced business
people and include individuals who have worked as brokerage firm managers,
attorneys, judges and/or accountants. They are paid by the parties
pursuant to a negotiated fee arrangement.
Although the results of a mediation session are not binding, in 85% of
the cases which are mediated, investors are satisfied with the settlement
approach ultimately arrived at by the mediator and agree to settle their
claims with brokerage firms along the guidelines of terms reached by the
mediator.
Advantages of mediation include reduced arbitration hearing session
fees, reduced expert witness fees and significantly less time spent in the
discovery and hearing process associated with arbitration. With an 85%
settlement rate, mediation is an approach which should be considered by
investors in consultation with counsel.
A party who is unhappy with the results of mediation and who does not
agree to settle in accordance with a mediator's recommendation will have a
right to pursue his or her claim through arbitration or litigation, if
applicable, if their rights to pursue the same have been properly
reserved.
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