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Arbitration
Arbitration, in contrast with mediation, is a formal and binding process. To begin, you submit an arbitration claim to the regulator that supervises the firm with which you have the dispute. In arbitration, an official arbitrator or panel of arbitrators reviews the evidence you and the brokerage firm provide, makes a decision, and sets the amount of any award. You don’t have much control over the outcome of arbitration proceedings, which is determined by the arbitrator or arbitrators without consulting either you or the other party.
The decision that binds
Whereas mediation is non-binding, once you enter arbitration, the final decision is binding, which means there’s no way to appeal it. Except in extremely rare cases, you’ll no longer be able to pursue your case in the courts. Also, unlike a court’s decision, arbitrators needn’t reveal their factual findings or legal reasoning. Arbitration tends to be cheaper than litigation but, due to arbitration fees and attorney bills, generally more expensive than mediation. Its adversarial nature generally makes it difficult to preserve professional or personal relationships between you and the firm or adviser with whom you have the dispute. |
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