Originally from Alternatives to the High Cost of Litigation

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Over the course of my career, I have heard many critical, even prejudicial, comments about arbitrators who adjudicate cases for the Financial Industry Regulatory Authority, best known as FINRA. Yet I continue to be proud to serve as a FINRA arbitrator.

Some claim that listing FINRA arbitration on a CV suggests an arbitrator is not good enough to compete for major commercial cases. Others say that no arbitrator would work for the pittance FINRA pays if the arbitrator could get more lucrative appointments. Or that FINRA arbitrators aren’t really “serious” arbitrators because they don’t have to follow the law—a claim that will remind those with long memories of the Supreme Court’s 1953 dismissive view of the caliber of arbitrators generally and of what it perceived as a looseness in the arbitration process in Wilko v. Swan, 347 U.S. 427 (1953) (available at http://bit.ly/36WGlIr), an opinion the Court only ultimately overruled in Rodriquez De Quijas v. Shearson/Lehman Bros. Inc., 490 U.S. 477, 485 (1989) (see accompanying box on page 172).

People often rate the quality of a good or service by its price. The cheaper something is, the less valuable it is likely to be. By this metric, FINRA arbitrators are marked as low-quality private judges because they are paid very little compared to most arbitrators and, for that matter, judges.