FINRA DRS Posts Stats Through 2Q: Customer Claims Are Even with 2020, While Industry Claims Continue to Plummet. And the COVID-19 Pending Cases Backlog is Really Gone
FINRA Dispute Resolution Services (“DRS”) posted case statistics through June, with the overall case filing trends essentially unchanged from prior months.
In brief, the headlines are: 1) overall arbitration filings through June – 1,533 cases – are down 18%, about the same as in May; 2) customer claims are now unchanged from 2020; 3) industry disputes are almost halved, down 40%; and 4) for the tenth month in a row, pending cases declined (and as discussed below, the COVID-induced backlog remains completely gone). Overall arbitration turnaround times were 13.7 months, with hearing cases now taking 15.2 months. There were just 223 mediation cases in agreement, a 7% decrease (up from May’s minus 16%). The settlement rate remains high at 86% (it had been 84% in May). There are now 8,323 DRS arbitrators, 3,955 public and 4,368 non-public. Both panels saw declines in June.
Virtual Arbitrations at FINRA
FINRA’s “Virtual Arbitration Hearings” category shows that, since FINRA started cancelling in-person hearings in March 2020, 380 cases were conducted with one or more hearings via Zoom (143 customer and 237 industry cases). There were 318 joint motions for virtual hearings (113 customer and 205 industry cases). As reported in SAA 2021-10 (Mar. 18), DRS in March posted two new stats on its Website that allow users to gauge results in hearings conducted by Zoom: Awards on the Merits of the Case with One or More Zoom Evidentiary Hearings and Awards on the Merits of the Case with In-Person Evidentiary Hearings are both listed under the category, Result of Customer Claimant Arbitration Award Cases (Regular Hearing Only. DRS resumed in-person hearings in all 69 locations on August 2; the impact on these stats remains to be seen.
COVID-19 Pending Cases Backlog is Still Gone
Recall that we had reported for months that pending cases had grown in the wake of the onset of the pandemic and in-person hearing cancellations. We later reported that parties and counsel appeared to have grown more familiar with virtual hearings and that, as a result, the pending cases backlog had been shrinking. We more recently reported that as of May, it was completely gone; in fact, there had been a net reduction in pending cases since the pandemic started. Those trends continued in June. The last ten months have each experienced declines in pending cases, reflecting a 816 case reduction from last year’s high water mark of 5,415 open cases in August 2020. This now leaves a cumulative decrease of 182 pending cases since March 2020.
(ed: *Again, kudos to FINRA DRS for eliminating the backlog. We had said before that we would be retiring this stat, but we couldn’t resist the temptation to see if the trend was holding. **We wonder why the number of both public and non-public arbitrators declined last month (the latter for the second month in a row)? ***We will analyze AAA’s stats through 2Q as soon as they are posted.)