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The script is in a regular typeface size. Information in brackets, in italics, is intended to clarify a point for the arbitrator and does not need to be read to the parties. The arbitration panel must be prepared for the conference call and have its schedule/calendar available. The conference operator may call you up to five minutes before or after the appointed time.
The panel Chairperson has the responsibility to record the agreements reached during the conference on the Initial Prehearing Conference Scheduling Order (Scheduling Order). The Chairperson should submit the enclosed Scheduling Order to FINRA Dispute Resolution within 48 hours. The Chairperson may do so by electronic mail or facsimile transmission.
The Initial Prehearing Conference (IPHC) procedures set forth below should be followed, but may, in the panel’s discretion, be varied to allow all parties a full and fair opportunity to present their respective positions. If a member of the FINRA Dispute Resolution staff participates in the conference, he or she should speak with the Chairperson before the IPHC to discuss their respective parts of the script. If a staff member is present, he/she will begin by introducing the arbitrators. If a staff member is not present, the Chairperson will perform this function.
Ill the parties or their representatives introduce themselves and any others who are listening on their end of the line? Since we cannot see each other, please continue to identify yourself by name whenever you speak.
This shall include all disclosures previously made, including any disclosures resulting from the Arbitrator Disclosure Checklist, in addition to new disclosures. Arbitrators are reminded that any change in their classification as a public or non-public arbitrator must also be disclosed.
As Chairperson, I have the following disclosures convey disclosure, if appropriate.
If not, inquire as to whether each arbitrator has read and reviewed FINRA’s Temporary and Permanent Arbitrator Disqualification Criteria, the Arbitrator Disclosure Checklist, and the Arbitrator Disclosure Report. If an arbitrator has not received and reviewed the above items, he/she is not permitted to rule on any item on today’s agenda. If he/she has reviewed the items, then administer the oath as follows:
“Do you, as an arbitrator(s) selected to hear this matter in controversy, solemnly swear or affirm that you are not an employer of, employed by, or related by blood or marriage to any of the parties or witnesses whose names have been disclosed to you; that you have no direct or indirect interest in this matter; that you know of no existing or past financial, business, professional, family, or social relationship which would impair you from performing your duties; and that you will decide the controversy in a fair manner, and render a just award?
Do you swear or affirm that, based on FINRA Dispute Resolution’s Temporary and Permanent Arbitrator Disqualification Criteria, you are not temporarily or permanently disqualified from being a FINRA arbitrator?
Having reviewed the Arbitrator Disclosure Checklist, do you certify that you have made all disclosures of items on the Arbitrator Disclosure Checklist?
Do you swear or affirm that your Arbitrator Disclosure Report is accurate, current, and up to date, and that you have no additional disclosures to make?”
The Chairperson should make sure that the oaths are executed in writing and given to the FINRA Dispute Resolution staff for completion of the case file.
If one of the parties has failed to submit a signed Submission Agreement, please advise the parties of the following:
Any party that has not yet filed a Submission Agreement or otherwise objected to jurisdiction must do so within 30 days or may be subject to sanctions as provided in the Codes of Arbitration Procedure (Codes).
FINRA Dispute Resolution mediators are trained and experienced in helping parties resolve their disputes. In addition, many are experienced arbitrators, attorneys, and securities industry professionals knowledgeable in employment and securities issues.
The mediation process is designed to proceed on a parallel track with this arbitration, so it does not interfere with the scheduled hearing dates or other matters agreed to during the course of this prehearing conference. If you are interested in mediation, contact the staff member assigned to this case for more information.
Please select either G or H below, as appropriate, to schedule hearing dates.
We begin with the scheduling of hearing dates and we remind the parties that it is better to set aside extra dates to avoid delay in the arbitration process. Expeditious resolution of disputes is one of the goals of arbitration. Therefore, the commencement of evidentiary hearings within nine months or less after this conference is the goal of FINRA and the arbitrators. It is understood that there may be times when this is not feasible. However, the commencement of hearings more than nine months after this conference should be the exception.
The arbitrators promise to avoid causing postponements, absent a genuine emergency. We also pledge to be prepared and on time for all conferences and hearings. In exchange, we expect the parties and counsel to avoid unnecessary postponements, to be prepared, and to be on time, for all conferences and hearings.
Have the parties agreed to hearing dates for consideration by the panel?
1. If yes, discuss the dates with the panel.
2. If no, find out how many days will be required. Continue by requesting the parties’ availability for the hearings, on a month-by-month basis, until sufficient dates have been selected.
We have been informed that this is an expedited case involving senior or seriously ill parties. FINRA’s procedures call for the scheduling of hearing dates that will expedite the process, but still provide a reasonable amount of time for case preparation. We remind the parties that it is better to set aside extra dates to avoid delay in the arbitration process.
The arbitrators promise to avoid causing postponements, absent a genuine emergency. We also pledge to be prepared and on time for all conferences and hearings. In exchange, we expect the parties and counsel to avoid unnecessary postponements, to be prepared, and to be on time, for all conferences and hearings.
Have the parties agreed to hearing dates for consideration by the panel?
1. If yes, discuss the dates with the panel.
2. If no, find out how many days will be required. Continue by requesting the parties’ availability for the hearings, on a month-by-month basis, until sufficient dates have been selected.
The arbitrators wish to remind the parties that FINRA rules require you to fully cooperate with one another with respect to the exchange of documents and information.
The following paragraph is for cases in which counsel represents all parties only.
We want to remind the parties about FINRA’s successful, voluntary Discovery Arbitrator Pilot program. A discovery arbitrator is a lawyer with experience in discovery matters that decides all discovery issues. The discovery arbitrator does not sit on the panel that decides the case. Once the hearing starts, the discovery arbitrator’s authority ends. As a voluntary pilot, only parties that stipulate to use the discovery arbitrator may participate. Parties who are interested in the pilot should contact the FINRA staff member assigned to this case or visit FINRA’s Web Site at www.finra.org.
The following two paragraphs are for public customer cases only.
We would like to confirm that all parties have received a copy of the Discovery Guide available for use in customer arbitrations. Has everyone received a copy? If anyone has not received a copy, advise the FINRA Dispute Resolution staff to send a copy to the party who has not received the Guide.
The Discovery Guide provides guidance regarding documents that are presumed discoverable. With few exceptions, these documents should be exchanged automatically without the intervention of the panel.
The preceding two paragraphs are for public customer cases only.
The arbitrators wish to remind the parties that the panel will not tolerate any abuse of the discovery process. Discovery abuse undermines the integrity and fairness of the FINRA forum. If necessary, the panel will consider a full range of sanctions in order to address discovery abuse by any party.
We would like to hear from the parties regarding the status and progress of their discovery proceedings to date.
Do the parties wish to stipulate to any deadlines or cutoff dates with respect to the filing of discovery requests and motions? If so, please memorialize the parties’ agreement in the IPHC Scheduling Order.
Do the parties wish to schedule a tentative telephonic hearing with the Chairperson to address unresolved discovery disputes? If so, please memorialize the date and time in the IPHC Scheduling Order.
If the parties are going to submit any additional documents regarding discovery for consideration by the panel, they should do so at least 10 days in advance of the scheduled discovery conference.
Please be advised that arbitrators will be compensated for decisions rendered on discovery-related motions on the papers. Each arbitrator that participates in deciding the discovery-related motion will receive $200. A single motion includes the motion and any opposition/replies sent in response to that motion.
The panel will allocate the cost of the honoraria to the parties at the conclusion of the case. FINRA rules also provide a $200 honorarium for arbitrators that decide contested subpoena requests. The honorarium shall be paid on a per case basis.
Under Rule 12503/13503, written motions, other than Motions to Dismiss, must be served at least 20 days before a scheduled evidentiary hearing, unless the panel decides otherwise. Parties have 10 days to respond to a motion, unless the moving party agrees to an extension or the Director or panel decides otherwise. Motions and responses must be served directly on each other party at the same time and in the same manner, and must be filed with the Director, with additional copies for each arbitrator.
Motions to Dismiss, governed by Rules 12504/13504 and 12206/13206, have different submission and response deadlines.
FINRA rules allow parties to make prehearing motions in writing or orally during any hearing session. Note that there are specific rules for motions to dismiss that differ from the general motion practice rules.
Do the parties intend to file any prehearing motions? If so, please indentify which motions you intend to file.
If the parties indicate that they intend to file prehearing motions, the panel should set up a briefing schedule for the motions. The briefing schedule for all motions, including Motions to Dismiss, should be memorialized in the Initial Pre-hearing Conference Scheduling Order. If applicable, the panel should specify in the Order the different time frames for a Motion to Dismiss.
If so, set deadlines for the submission of the briefs and request that the parties attach all cases cited. The briefs should be simultaneously exchanged by the parties and submitted to FINRA Dispute Resolution.
If the parties agree to this process, the Chairperson should record the parties’ agreement in the Order. The Chairperson should ensure that all correspondence that should be transmitted directly to the panel is listed in the Order. If all parties and arbitrators agree to use electronic mail or facsimile, the Order should reflect all parties’ and all arbitrators’ electronic mail addresses or fax numbers. The Order should also indicate the appropriate confidentiality message that all parties and arbitrators are encouraged to use in their electronic mail messages and facsimile transmissions.
If a party requests to hold the hearing in an alternative hearing location, i.e. not in one of the 73 designated hearing locations, you should advise the parties that they will be responsible for paying the arbitrators’ travel and expenses. Also, if the hearing was originally scheduled to take place in one of Dispute Resolution’s four regional offices (Boca Raton, Chicago, Los Angeles, or New York), and the panelists grant a party’s request to proceed in an alternative hearing location, please advise the parties that they are responsible for securing and paying for the conference room rental and tape recording costs.
Read the dates and information you recorded in the Order.
Please do not expect the staff to send letters reminding you of your deadlines. The deadlines are your responsibility.
Parties shall submit the appropriate number of copies to staff and shall simultaneously serve one another. Parties are reminded again to use the same form of service with one another as used when filing with FINRA Dispute Resolution, and to do so simultaneously.
Thank you for your participation.
Executive Session:
Reconnect with a Verizon operator pursuant to the instructions you received at the outset of the call. Confirm with the operator that only the arbitrators are on the line.
Assessment of IPHC: Discuss and decide whether and how the fee for the IPHC shall be apportioned (who bears the cost) if the matter settles without a hearing.
NOTE: Outstanding forum fees that have not yet been resolved or assessed by the panel, the parties or another Rule will be divided equally among the parties when settling parties fail to allocate fees in their settlement agreements.
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