Challenging the Arbitrator: Motions to Recuse

In a FINRA Arbitration, parties are permitted to challenge the appointment of an arbitrator to their case. Parties may challenge the arbitrator directly by filing a Motion to Recuse. Alternatively, a party’s challenge may be made directly to FINRA in the form of a Challenge for Cause or by filing a Director’s Authority to Remove request.

In the event that all parties ask an arbitrator to recuse from the panel, the arbitrator should honor the request and recuse. Recusal under these circumstances is required under the Code of Ethics.

If fewer than all parties request that an arbitrator recuse themselves from the panel, an arbitrator should do so unless, after carefully considering the matter, the arbitrator determines that the reason for the challenge is not substantial, and the arbitrator can nevertheless act and decide the case impartially and fairly.

Arbitrators will not feel offended if they are asked to recuse themselves from a case since such requests are generally not based on the ability or competence of an arbitrator. In some instances, an arbitrator may voluntarily choose to withdraw from a case. Even if the case has already proceeded, it may be less expensive for the parties if an arbitrator steps down in the middle of the proceeding than for the parties to complete the proceeding and file a motion to vacate the award. However, whether arbitrators choose to step down should be balanced by the significance of the disclosure, the disclosed relationships and the prejudice to the parties.

About the Author: Ken Strongman (www.kpstrongman.com) has years of experience and a growing national reputation as a mediator and arbitrator. He has successfully resolved more than a thousand disputes in the fields of construction defects, real estate, intellectual property, and employment. He is also a Mediator and Arbitrator for FINRA.