COMPLAINTS

IDA Arbitration Program

The following outline published by the Investment Dealers Association provides an outline of the arbitration program available for clients of IDA member firms. Prior to attempting to resolve any dispute it may be advisable to seek legal counsel.

Arbitration for Clients of IDA Member Firms

Resolving disputes amicably, fairly, and quickly is a priority for investment dealers and their clients. Trust and mutual respect are at the heart of any successful client-investment advisor relationship. That's why any disagreement needs to be dealt with quickly, effectively and in a manner that will maintain this positive relationship.

For disputes between a client and a Member firm that cannot be resolved through regular administrative channels within the investment dealer, the Investment Dealers Association of Canada has an innovative program – a prompt, inexpensive and independent arbitration process for disputes up to $100,000.

The program is available to all clients of IDA Member firms. Arbitration was first introduced in British Columbia in 1993, in Quebec in 1996, in Ontario, Alberta, Saskatchewan and Manitoba in 1999, and in New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland in 2000.

As the self-regulatory organization of the Canadian securities industry, the IDA enforces rules and regulations regarding the sales, business and financial practices of its Member firms. The IDA investigates complaints and will impose penalties where regulatory violations have taken place. The IDA does not have the regulatory authority to compensate clients. This is properly a matter for the legal system, either through arbitration, where it is available, or the courts.

What is arbitration?

Arbitration is a method of resolving a dispute in which the parties to the dispute ask an independent arbitrator to listen to their facts and arguments and to decide how the dispute should be resolved. The arbitrator then decides on the resolution of the dispute.

Arbitration has its own set of straightforward rules that are established by provincial legislation. An arbitrator's decision is binding. In choosing arbitration, the parties give up the right to pursue the matter further through the courts and they sign an agreement to this effect at the beginning of the arbitration process. Parties can choose to be represented by a lawyer during the arbitration process but this is not a requirement.

Arbitrations are conducted by a neutral agency that provides arbitrators who are usually retired judges and lawyers knowledgeable about the securities industry. All aspects of the proceedings are confidential and all the hearings private, unless both parties agree otherwise.

What are the advantages of arbitration?

Going to court can involve significant costs and lengthy waits. In some provinces, the average time before a case goes to trial is two years and the costs for each party can average $37,500. In comparison, the IDA program is structured to ensure that a typical complaint can be resolved within a time frame of approximately three months at a fraction of the cost. Arbitration is particularly appropriate when the amounts in question are too small to warrant high legal costs.

What does arbitration cost?

Costs will be significantly less than pursuing the matter through the courts. It's not unusual for a typical dispute to be handled in an arbitration session lasting less than a day. Total costs (including a filing fee, the arbitrator's hourly rates, room rentals and other disbursements) can be expected to range between $3,000 to $4,000 for a typical dispute. Costs are generally split equally between the parties, but the arbitrator can make a different determination.

Each party is responsible for their own legal fees, if they choose to be represented by counsel.

How does the arbitration program work?

It's important to realize that the program is available solely at the client's option. If a client decides to resolve a dispute through the arbitration process, participation by the IDA Member firm is mandatory. It's the client's choice.

Before arbitration can be considered, the client must try to resolve the problem with the Member firm. The problem can be discussed with the investment advisor or, if that fails to resolve the problem, with a more senior person in the organization, such as the branch or sales manager, or the firm's compliance officer. If the dispute is still not resolved, a client may then proceed to arbitration.

What kinds of disputes are eligible for arbitration?

A claim may be eligible for arbitration if:

Attempts have been made to resolve the dispute with the investment dealer and
The amount claimed does not exceed $100,000 and

Events in dispute* have occurred on or after:

January 1, 1992	in British Columbia
January 1, 1996	in Québec
June 30, 1998	in Ontario
July 1, 1999	in Manitoba, Alberta and Saskatchewan
June 30, 1999	in New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland

* Eligibility dates reflect the introduction dates of the programs.

How should a claim be filed?

A sumary of the dispute should be prepared including the amount in question; details of attempts to resolve the matter with the investment dealer; and appropriate supporting documents such as client account statements.

Send the material with the client's name, address and telephone number to the appropriate arbitration organization (see Arbitration Programs).

What happens if a claim is eligible for arbitration?

If a claim meets the eligibility criteria, the parties will be provided with a list of potential arbitrators from which to choose. Once an arbitrator has been selected, a date will be set for the arbitration hearing. If both parties cannot agree on an arbitrator, the arbitration organization will appoint one.

ARBITRATION PROGRAMS

For clients based in Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland:

ADR Chambers
c/o The Honourable John Webber, Q.C.
Suite 1100, 48 Yonge Street
Toronto, Ontario M5E 1G6
Tel. (416) 362-8555
Fax (416) 362-8825
1-800-856-5154
web site: www.adrchambers.com
E-Mail: adr@adrchambers.com

For clients based in Québec:

Québec National and International Commercial Arbitration Centre
c/o Gilbert Noreau
Édifice La Fabrique
Suite 90, 295, Charest Blvd. East
Québec, Québec G1K 3G8
Tel. (418) 649-1374 in Québec City
Tel. (514) 393-3794 in Montréal
Fax (418) 649-0845
E-Mail: cacniq@cacniq.org

For clients based in Alberta, Manitoba, Saskatchewan and British Columbia:

British Columbia International Commercial Arbitration Centre
c/o Peter Grove
1140 - 1090 West Georgia Street
Vancouver, British Columbia V6E 3V7
Tel. (604) 684-2821
Outside the Lower Mainland: (877) 684-2821
Fax (604) 684-2825
web site: www.bcicac.com
E-Mail: options@bcicac.com

Complaints