There are a number of options available to investors to resolve disputes with dealer members, including the Program. Up until recently, the award limit under the program was $100,000 which in many instances, did not provide sufficient recovery for investors, who would then turn to the courts as a means of obtaining compensation from the dealer member. With the increase award limit, the Program just became more attractive to investors. Coupled with the increase award limit, arbitration is a faster process and more cost-effective than suing in court. Many might say that with the higher limits, the Program is a real choice for investors to use as a recourse to resolve disputes with the dealer members.
In increasing the award, IIROC has also implemented a change to the rules of procedure under the Program to permit a claimant at the commencement of the arbitration proceeding to opt to eliminate the arbitrator’s discretion to award costs against a party, unless the arbitrator finds that the party has acted in a manner that may be characterized as unfair, vexatious, improper, in bad faith or has unnecessarily and unreasonably prolonged proceedings. The opt-out relates to cost awards, which includes legal fees and expert fees. Some argue that placing the authority in the hands of the investor to unilaterally decide to eliminate cost awards is unfair. IIROC takes the position that there still remains discretion in the hands of the arbitrator to award costs in certain circumstances.
