Mediation, Raven told the conference, was used in 49 percent of disputes handled by CPR, negotiation in just under 40 percent, and arbitration in less than 12 percent of cases. NASD rules governing mediation proceedings to resolve disputes between investors and securities firms or disputes between securities firms were approved by the Securities and Exchange Commission on August 1. Raven noted that arbitration, the best-known form of alternative dispute resolution, has undergone a huge increase in demand. The American Arbitration Association reported almost 60,000 cases filed in 1994, double the caseload of 1985. The NASD, which conducts more than 85 percent of arbitrations in the securities industry, reported a record 5,570 cases filed last year.
Mediation is a non-binding negotiation facilitated by an experienced and neutral third party.
It offers potential early resolution of disputes saving both time and money. If mediation is unsuccessful, the parties can still pursue arbitration or litigation. Raven said mediation is unusually flexible and adaptable to the needs of the parties. Under NASD mediation rules, all matters eligible for arbitration under the NASD Code of Arbitration will be eligible for mediation. The NASD has added mediation services under NASD Mediation Director Kenneth Andrichik to its nationwide dispute resolution forum.