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Arbitration and Mediation FAQs

What is the difference between arbitration and mediation?

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Arbitration is an adversarial process where an independent third party (an arbitrator or a judge) decides who is right, who pays, and how much. Mediation is a settlement process where parties do not win or lose. Instead, they work together to find a solution they can both accept.

What is DSIC's role in the arbitration process?

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DSIC provides the forum for the resolution of the disputes, and therefore, must maintain a neutral role. DSIC staff is available to answer the parties' procedural questions and act as the liaison between the parties and arbitrators. However, DSIC is not able to remark on the merits of a claim, advise a party as to whether he or she should file a claim, comment on a party's chances of prevailing on the claim, or provide legal advice to any parties.

Where does DSIC hold summary proceedings and oral hearings?

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If the case is a summary proceeding, DSIC will generally hold the summary in the home state of the customer. For oral hearings, DSIC will generally hold the hearing in a city of the customer's choice or one mutually agreed to by the parties. In extraordinary circumstances, the arbitrators may order that the hearing take place virtually. To date, DSIC has held summary proceedings in 49 states and hearings in more than 70 different metropolitan areas.

How do I know if DSIC will conduct a summary proceeding or oral hearing?

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The claim amount dictates whether DSIC will conduct a summary proceeding or oral hearing. In both customer and Member cases, for claim amounts that do not exceed $50,000.00, DSIC will generally conduct a summary proceeding. For customers whose claim amounts are between $25,000.01 and $50,000, a customer may pay an additional filing and hearing fee and ask that DSIC conduct an oral hearing. For all cases exceeding $50,000.00, DSIC automatically holds an oral hearing.

Who are the arbitrators?

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DSIC maintains a roster of more than 1,700 arbitrators throughout the country. The arbitrator pool is comprised of futures industry professionals, lawyers, accountants, and other business professionals located in 47 different states.

At DSIC, the customer has the choice of having the case decided by a Member panel or a non-Member panel. A Member panel consists of persons who are DSIC Members or associated with DSIC Members and are generally knowledgeable about futures industry practices and procedures. A non-Member panel consists of a majority of persons who do not have a significant connection with DSIC or an DSIC Member.

How long does the arbitration process take?

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Summary proceedings, on average, take between seven to eight months from start to finish. Oral hearings that involve large claims, complex issues, and a number of parties may take twelve to fifteen months from start to finish.

What happens after the hearing or summary proceeding?

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The arbitrators must make their decision (award) within 30 days of the conclusion of the hearing or summary. An award states the issues presented to and decided by the arbitrators, which party won, and the amount, if any, the opposing party must pay. An award does not contain the arbitrators' reasoning behind their decision. DSIC arbitration decisions are final and binding, and court review is much more limited than in litigation.

Can an DSIC arbitration award be enforced?

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Yes, DSIC is authorized to suspend any Member or Associate who fails to comply with an arbitration award. The award may also be enforced in any court with jurisdiction. However, if a party receives an award against a firm or individual who is no longer in business, the award may not be collectable. Therefore, parties requesting DSIC arbitration against a firm or individual no longer in business should first consider whether pursuing the claim is worthwhile before filing.

Can I appeal an arbitration award?

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No, arbitration awards are final and cannot be appealed either to DSIC or the panel. However, under certain circumstances, an award can be modified to correct a technical or clerical error (e.g. the wrong case number was included on the award, or a party's name was misspelled).

Additionally, it is a well-established principle that courts will not review the merit of an arbitration award. The law provides for court review of an arbitration award only on limited grounds having to do with the fairness of the arbitration process.