While passage of the legislation is unlikely in the Senate, where a similar bill lacks one Republican co-sponsor, experts on both sides of the issue point to the fact that leading Republicans have stated on the record this year that they want to look at securities arbitration as a window of opportunity for arbitration reform.

Earlier this year, Senate Judiciary Committee Chairman Lindsey Graham (R-S.C.) said, “What’s good for business is not necessarily good for individuals. ... It bothers me that when you sign up for a product or service, you are giving away your rights." He addeed that the committee would take a "long and hard look at how arbitration can be improved" this year. "We will try to find some middle ground. ... There have to be fairness standards.”

Friedman said he thought the House bill needed a good deal of work and would prefer that it offered investors the right to choose arbitration at the outset of a relationship.

“I have my accounts with Merrill and this statute would retroactively nullify the arbitration clause I signed with them,” said Friedman, who left Finra six years ago and is now editor of Securities Arbitration Alert and a professor of law at Fordham University.

Friedman said if given the choice by Merrill Lynch, he would sign the mandatory arbitration clause all over again. “I would sign it absolutely. Court is very expensive and in the state of New York cases are subject to three levels of appeals. Court cases take a long time and are very costly,” he said.

Arbitration has another benefit, said Friedman. "Finra will enforce arbitration as well. If a broker or firm doesn’t pay, they’ll take away your license,” he said.

PIABA’s Lazaro said consumers need to be able to choose for themselves.

“I think it is important that investors have the option to resolve disputes in their forum of choice," he said. "These contracts force investors to give up their right to a jury trial at the outset of a relationship, when a dispute is pretty inconceivable to investors."

“I think the bill in the Senate is less likely to get out committee, but it is certainly increasing attention on mandatory arbitration and the problems that exist,” he said.

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