Trends in FINRA Arbitration in Massachusetts, Maine, & New Hampshire

According to FINRA, arbitration case filings in 2016 (3,681) were about 7 percent ahead of the number of total case filings in 2015 (3,435).  The number of customer disputes, which account for 70% of the total number of disputes filed, is up about 8%.  The number of intra-industry disputes is up about 6%.  FINRA nearly kept pace with this modest bump in filings by closing 4% more cases in 2016 than it had in 2015.  The turnaround time from filing to a standard decision in 2016 was 16.7 months. The turnaround time from filing to simplified decision was less than half that time period, 7 months.  

How many cases were filed in New England states?  According to FINRA:

Augusta, Maine -- 5

Boston, Massachusetts -- 59 

Hartford, Connecticut -- 37

Manchester, New Hampshire -- 7

Montpelier, Vermont -- 3

Providence, Rhode Island -- 8

How many FINRA arbitration decisions were issued in 2016?

Augusta, Maine -- 2

Boston, Massachusetts -- 24

Hartford, Connecticut -- 9

Manchester, New Hampshire -- 5

Montpelier, Vermont -- 1

Providence, Rhode Island -- 7

This compares with hotbeds of FINRA arbitration in San Jan, Puerto Rico (890 case filings), New York City (536 case filings), and Boca Raton, FL (287 case filings).

Statute of Limitations in Maine Arbitration

How long is too long to wait before a securities arbitration claim can be asserted?  There's no simple answer.  Many factors go into the mix in fixing deadlines, including (of critical importance) the nature of the claim.  Another factor is whether the claim is subject to arbitration. 

In Maine -- as in many other states -- the generally applicable deadline for filing legal claims (the statute of limitations) does not apply in arbitration.  The default statute of limitations applicable to most Maine civil actions is six years after a cause of action accrues.  14 M.R.S. §752 (“All civil actions shall be commenced within 6 years after the cause of action accrues and not afterwards … except as otherwise specifically provided.”).  Under Maine law, however, the statute of limitations does not apply to arbitration because arbitration is not an action an action at law.  Lewiston Firefighters Assoc. v. Lewiston, 354 A.2d 154, 167 (Me. 1976) (“Arbitration is not an action at law and the statute is not, therefore, an automatic bar to . . . recovery.”).  

But under Maine law a claimant cannot wait forever to assert a claim.  Arbitrators may consider the equitable affirmative defense of laches, whether a claimant has waited “an unreasonable length of time” and thereby induced the other party to rely “in good faith on the other party’s non-action” and “change his position” accordingly.  Id. at 168.  A laches defense is equitable in nature and “addressed to the [arbitration panel’s] conscience.”  Id.  Its touchstone is “fairness” under the “particular factual circumstances” of a claim.  Id.  Because laches is an affirmative defense, the defendant bears the burden of proof to show that it applies.    In customer disputes it is almost always necessary for a panel to allow a claimant to present his or her proof at a final hearing before determining whether a claim is timely (in whole or part) or whether an award should be reduced for some reason due to the passage of time.