Prospective clients frequently ask me about their “chances” in securities arbitration. Let’s look at the statistics: FINRA reported that as of July 2014, the number of newly filed FINRA arbitration cases was 2,383. By comparison, 3,714 arbitration cases were filed with FINRA in 2013, 4,299 cases were filed in 2012, and 4,729 cases were filed in 2011. For the past decade, the “win” rate of customer initiated arbitrations has never been more 47%. A “win” is a customer case decided by the arbitrators in a hearing or on paper where the customer is awarded some amount of monetary damages or non-monetary relief even if it is only a fraction of the damages or relief sought. Thus, a “win” is any amount awarded to a claimant even if it is only 10% of the damages sought. In the late 80s and early 90s, the “win” rate was occasionally in the 51% – 54% range.
For cases that were decided by the FINRA arbitrators at a hearing or on paper from January through July 2014, 42% were classified as a “win” for customers. For all of 2013, the “win” statistic was 42%. For all of 2012, the “win” statistic was 45%. For 2011, the “win” statistic was 44%. For 2010, the “win” statistic was 47%.
The “win” percentages are not very high. However, one reason is that the better cases for claimants settle before going to hearing and the weaker cases actually get tried and decided by the arbitrators. For a link to the 2014 and earlier FINRA statistics, click here: