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July 31, 2001

Arbitration Filings Are Down

By Gregory Bresiger

The Securities Industry Conference on Arbitration (SICA) plans to "encourage the use of mediation," according to a recently released report. The report also contains several changes in the arbitration code. Among them are an attempt to re-write the code in simple, clear language, allowing parties to an arbitration to request additional arbitrators if those on their A list are unavailable, and procedures for removing an arbitrator after the commencement of a first hearing.

The SICA, in a report of the number of cases filed under the industry's system of arbitration, noted that the total number of cases received in 2000 by the New York Stock Exchange declined to 553 (from 602 the previous year).

The number of public customer cases decided was 116, with about half, 55, decided in favor of the public. The number of cases filed has been declining over the long term. Back in 1990, NYSE cases received were 1,378. In that year, 499 public customer cases were decided, with 256 decided in favor of the customer.

"As SICA's work of establishing a uniform arbitration system for the resolution of securities industry disputes has matured, fewer changes to the Uniform Code of Arbitration are now necessary. Accordingly, SICA has begun to focus on other forms of dispute resolution, specifically mediation," according to the report.

SICA will also now keep statistics on mediation as well as try to standardize mediation procedures so it can use them throughout the securities industry. "It was the consensus that SICA should not endeavor to draft uniform rules of mediation, but rather work to facilitate its use," the report said.