Who pays for the costs of securities arbitration hearings?

The cost for securities arbitration hearings depends on the situation. Generally, the party initiating the arbitration will pay the filing fee as well as other related costs. The initiating party will also be responsible for paying the arbitrator’s fees and any additional costs, such as travel, for hearings held outside of Virginia. The non-initiating party is generally expected to pay their own attorneys’ fees and other costs. In Virginia, the state Supreme Court’s Rules of Professional Conduct require attorneys to advise their clients of the potential for financial risks and to provide an estimate of the total cost of the arbitration before they begin. The estimate should include filing fees, administrative costs, legal fees and other related costs. If the dispute is heard by the Financial Industry Regulatory Authority (FINRA), then the parties must pay their own costs and fees, including any expert witnesses or other fees that may be necessary. Certain organizations, such as FINRA, which handles most securities arbitrations, have their own fee schedules which the parties should review and understand prior to initiating the arbitration. For example, FINRA sets a schedule of fees for filing, hearing sessions, and any awards based on the amount at stake in the arbitration. In addition, the American Arbitration Association (AAA) maintains its own fee schedule for certain arbitration proceedings. Generally, parties to a securities arbitration in Virginia will both be responsible for the costs associated with the hearing and the arbitrator’s fees. It is important for parties to understand their costs before initiating a securities arbitration in order to make an informed decision.

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Who pays for the costs of securities arbitration hearings?

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