The continuing Covid pandemic has prompted Finra to postpone all in-person arbitration and mediation hearings through December 4 and instead have all proceedings conducted through teleconferencing.

Currently, only a handful of Finra's 70 hearing locations meet the public health guidelines issued by the Center for Disease Control (CDC) guidance for activities such as in-person hearings, Finra Dispute Resolution Services (DRS) said in a statement.

“We recognize that this decision may cause inconvenience and we do not make it lightly,” DFS said in a statement.

“If you have an in-person hearing or mediation session scheduled through this date, you will be contacted by Finra DRS staff to discuss virtual hearing options or reschedule. Please note that postponing a hearing will not affect other case deadlines,” the organization said. All case deadlines will continue to apply and must be met unless the parties jointly agree otherwise, Finra said.

Further, Finra said it will waive postponement fees when parties stipulate to postpone in-person hearing dates scheduled through December 31. To avoid postponement fees, parties must provide written notice of the stipulation to postpone more than 20 days prior to the first scheduled hearing date. Parties that postpone in-person hearing dates should also consider changing other case deadlines, Finra said.

“One of the key things is, we will have Finra staff on every Finra hearing to serve as host, unless the arbitrators want to serve as host. That’s a huge resource and allows the arbitrators to focus on the case and staff can take care of the technical side,” including Zoom break out rooms, Richard Berry, executive vice president and director of Finra's Dispute Resolution Services said in a new Finra arbitration webinar. 

Finra staff are also available to do mock Zoom arbitrations and to facilitate break out rooms so that attorneys can talk to co-counsel and clients to enable private conversations, Berry said.

Finra said it considered moving forward with in-person hearings in locations that demonstrated public health conditions consistent with CDC guidelines. However, it decided to postpone hearings due to arbitrator concerns about participating in in-person hearings, as well as state and local quarantine orders affecting participants who would need to travel to the hearing locations.

Securities attorneys on both sides of the aisle say they are finding that as they get the hang of the virtual Zoom technology used for hearings, they like the ease and control the forum provides.

Troy Ford, an attorney at Beck Redden LLP, said he was “riding the wave of the future" after completing a first arbitration on Zoom regarding an intellectual property dispute earlier this month. Opposing counsel was in Washington, D.C., and Maryland, and there were witnesses in Florida, Canada and Texas, with thousands of exhibits, Ford said. “We had an occasional freeze frame but overall it was a good way to present and receive evidence,” Ford said on Twitter.

Sam Edwards, president of the Public Investors Arbitration Bar Association (PIABA), said he also has just finished a Finra arbitration on Zoom. “My first one. I actually thought it worked really well,” he said. Edwards said the technology gave him the ability to control the evidence and to call witnesses from all over the country. “I can actually see preferring it to an in-person arbitration once we all get a little better at it.”

From a “pure cost savings alone, you don’t have clients flying in from all over the country for five questions, which is certainly not cost- or time efficient. From virtue of using Zoom you can call witnesses from around the country that may be minor but material, but that you might forego if you had to fly people in,” Jeff Kaplan, a partner at Dimond Kaplan & Rothstein P.A., said.