IIROC makes changes to arbitration program

The board of directors of IIROC has approved two key changes to the SRO’s arbitration program, effective immediately for new cases. First, the previous $100,000 reward limit has been increased to $500,000. Second, investors now have the option, under certain conditions, to eliminate the discretion of arbitrators to award costs against a party.

“The higher award limit will make arbitration a more viable option for investors,” IIROC president and CEO Susan Wolburgh Jenah says. “Clients of IIROC-regulated firms have access to a number of dispute resolution alternatives and can select the option which best suits their specific needs and circumstances.”

During the consultations that led to the changes, some expressed concerns that investors might be deterred from choosing arbitration to resolve disputes with IIROC-regulated firms due to fears of adverse legal cost awards.

The new rules allow investors to opt at the beginning of a proceeding to eliminate cost rewards, making each party responsible for its own legal costs. Arbitrators are still able to award costs where a finding of vexatious, unfair or improper conduct is made, however.

The changes are the product of a comprehensive review and evaluation of the arbitration program the IIROC initiated in 2008.

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