Judicial Arbitration/Mediation Services (JAMS)

JAMS Dispute Resolution Provides Consumers with a Forum to Adjudicate Complaints against a Wide Variety of Companies

JAMS is one of the most popular arbitration forums where a company will require a consumer to file their case should a dispute arise. When first formed in 1979, the JAMS roster of arbitrators was comprised entirely of retired judges, with JAMS being an acronym for “Judicial Arbitration and Mediation Services.” Today, JAMS still contracts some of the most prestigious retired judges and attorneys as arbitrators to preside over the cases.

It is becoming increasingly popular for companies to bury arbitration clauses in their agreements and contracts with consumers. This includes many everyday transactions in which the average consumer engages, from cell phone service agreements to contracts with educational institutions. Many investment professionals that are not FINRA-registered brokerage firms, such as Registered Investment Advisors, will also specify JAMS or another similar forum, AAA, as the forum where a client must file their complaint.

However, just because the case is being resolved in arbitration rather than court does not mean that it is a more relaxed or informal process. Disputes filed in JAMS result in binding arbitration awards. Simply put, just like when a judge renders a decision in court, the arbitrator’s award is final, and can only be vacated under extremely limited circumstances. There are also quirks in JAMS arbitration rules that are not common in court. For these reasons, it is important that you hire attorneys that are experienced in handling cases in JAMS as soon as you are contemplating filing a case.

One of the issues that you will need to address before the case is even filed is which set of JAMS Rules will govern your case. JAMS has a number of different procedures and rules that govern important issues, such as which party(s) are responsible for JAMS arbitration expenses and the scope of discovery. In order to be enforceable, arbitration clauses generally must specify the arbitration forum and the specific rules or procedures that will govern the arbitration. For example, the two most common rules in JAMS are the Comprehensive Rules and the Streamlined Rules. The Streamlined Rules generally apply to cases in which the claim and or/counterclaim do not exceed $250,000 (exclusive of interest an attorneys’ fees), whereas the Comprehensive Rules are the default rules for cases exceeding $250,000 in damages.

Another important distinction is whether a case may be classified as a “Consumer” arbitration. Pursuant to JAMS’ Consumer Arbitration Minimum Standards, the consumer is only required to pay the initial $250 filing fee for their case, and the company that they are suing must pay all other JAMS expenses, which get expensive quickly. Unlike in court, in JAMS, the arbitrators charge hourly for their time, ranging from $400 to $1,000 per hour. JAMS also requires payment of large deposits to cover these arbitrator fees before they will even schedule the initial scheduling call. If a case is not declared as a consumer case, then the claimant and defendant are required to split these costs evenly, which can easily amount to at least $50,000 per case or more in many circumstances. Thus, it is important to hire an attorney before you file a case so that they can review the arbitration clause and ensure that the case is filed in the proper forum, and under the correct rules and procedures. The assessment of tens, if not hundreds of thousands of dollars of arbitrator expenses solely on the Respondent could be an important bargaining chip in your case. Otherwise, if mishandled, this can quickly turn into an extremely expensive mistake for a consumer.

In order to commence an arbitration in JAMS, the following documents must be filed with JAMS and served on the Respondent(s):

  • Demand for Arbitration;
  • A Copy of the Agreement to Arbitrate; and
  • Proof of Service on the Respondent(s).

JAMS has a demand form that must be completed by the claimant in every case to commence the arbitration. The form requires contact information for the parties, and basic information about the dispute and arbitrability of the dispute. There is a section on the form where the Claimant should provide a brief description of the dispute – such as a summary of the facts, the causes of action, and the remedies sought. However, it is common for a Claimant to instead file a long, formal demand, similar to what may be filed in court. Unlike in court, a Respondent is not required to file an Answer to the demand. The Respondent is generally given the option to file an Answer within fourteen days of receipt of the complaint, however if not, then any claim or counterclaim is deemed denied and the Respondent will have the opportunity at the arbitration hearing to raise its defenses (See Rule 9(e) of JAMS Comprehensive Rules and Rule 7(e) of JAMS Streamlined Rules). Another difference between court and arbitration is the necessary service required. Unlike court, which requires formal service of a complaint by a process server or sheriff, the proof of service for a JAMS complaint only requires a copy of a receipt, such as a FedEx, UPS, or Certified Mail receipt.

After a case is filed, the parties will be sent a commencement packet with a list of seven arbitrators. One arbitrator will be appointed to preside over the case. Each party must rank can strike up to two arbitrators, and must rank the other arbitrators. Striking an arbitrator means JAMS cannot appoint that arbitrator to the case. A substantial amount of due diligence into each arbitrator is necessary in order to appoint an arbitrator that will give you the highest likelihood of success. JAMS provides minimal information about each arbitrator, so you need an attorney that can spend the time and resources digging into each arbitrator’s personal and professional background. The “Strike Lists” are usually due within one week of receipt and JAMS appoints an arbitrator based on the lists submitted by each side. When the arbitrator is assigned, a conflict disclosure is sent to the parties, and JAMS will schedule an initial pre-hearing conference call with the arbitrator and the parties to schedule the arbitration hearing, and any other due dates, such as discovery and motion due dates.

Dispositive motions, such as motions to dismiss or motions of summary judgment or summary disposition are generally discouraged in arbitration. This is a stark contrast to court, where these types of motions are commonplace. JAMS Comprehensive Rule 18 requires the party seeking summary disposition to first file a request to move for summary disposition before any motion is filed. The motion can only be filed if the party shows that the proposed motion is “likely to succeed and dispose or narrow the issues of the case.” JAMS Streamlined Rules do not specifically allow for the filing of any dispositive motions.

After the arbitrator is assigned and schedule is set, discovery begins. In JAMS, the discovery rules vaguely require the exchange of all non-privileged, relevant documents and information and the identification of witnesses. (Rule 17 of the JAMS Comprehensive Rules and Rule 13 of the JAMS Streamlined Rules). Typically, in order to obtain relevant documents and information, the parties will file requests for documents and, potentially, interrogatories which are requests for information. The parties will have the opportunity to object to each other’s requests and if discovery disputes cannot be resolved between the parties, they can file motions to compel with the arbitrator to decide which documents must be produced and interrogatories must be answered.

One of the major differences between discovery in court and arbitration is that, while depositions of parties or witnesses are common in court cases, they are not allowed or extremely limited in arbitration. Comprehensive Rule 17(b) permits each side to take the deposition of only one witness, unless the arbitrator orders additional depositions. Conversely, the Streamlined Rules do not allow for any depositions. Another indication of how limited discovery is under the Streamlined Rules is that the exchange of documents and information be completed within fourteen (14) calendar days after all pleadings or notices have been received. It is important to have any attorney that understands the limitations in discovery in arbitration. Otherwise, if they simply agree to things like depositions, they will be agreeing to making the case more expensive for you, and allowing discovery that Respondent may otherwise not have access to that can be detrimental to your case. Additionally, it is important that your attorney has experience handling your specific type of consumer dispute. For example, if you are suing an investment advisor, critical documents, like compliance and supervision documents are necessary to meet your burden of proof at a hearing. Cases can be won and lost in discovery.

Prior to the arbitration hearing, the parties must exchange “Pre-Hearing Submissions” (Streamlined Rule 15 and Comprehensive Rule 20). Under both rules, the Pre-hearing Submissions include 1) a list of witnesses, including expert, 2) a short description of the anticipated testimony of witnesses and length of testimony, and 3) a list of exhibits. While not specifically contemplated in the Streamlined Rules, exchange of expert witness reports is also typical in the pre-hearing exchange if a party is calling an expert. Under the JAMS Rules, pre-hearing briefs may also be exchanged prior to the hearing. In the pre-hearing brief, the parties provide a description of the facts, causes of action, and damages, and the evidence and testimony that they expect will be presented at the hearing,

Before going to a final arbitration hearing, the parties may explore settlement negotiations or mediation. Parties may engage in settlement negotiation simply between the parties, or they may engage the services of a mediator. Many JAMS neutrals are qualified to serve as arbitrators or they can be used as mediators. A mediator is a third-party neutral who evaluates the strengths and weaknesses of the case and assist the parties in resolving their case. Mediation is voluntary. Even if a mediation is unsuccessful as far as reaching a settlement, it is generally a good opportunity for each side the flush out and understand the issues of the case before heading to a final arbitration hearing.

The structure of a final arbitration hearing typically includes opening statements, the presentation of each sides case in chief, which includes witness testimony and the introduction of documentary evidence, and closing statements. In some circumstances, the parties may submit post-hearing briefs addressing specific issues requested by the arbitrator, or that otherwise summarize their position based on the testimony and documents entered as evidence. The arbitrator has thirty days after conclusion of the arbitration hearing, or after submission of post-hearing briefs, to render an Arbitration Award. The Arbitration Award in JAMS is usually a reasoned award, explaining the arbitrator’s analysis of the evidence and law, and the award of damages, if any. These awards are final and absent truly extraordinary circumstances, will not be overturned by a court of law.

The attorneys at Stoltmann Law Offices have tried JAMS arbitration cases for clients since 2007. We have counseled hundreds of clients through the JAMS process over the years and secured tens of millions of dollars in recover for our clients. Our experience in JAMS arbitration is unmatched.

Chicago Investment Fraud Attorneys Offering Nationwide Representation to Investors

If you have suffered financial losses because of the negligence or fraud of your financial advisor or broker through unsuitable investment recommendations, over-concentration, churning, misrepresenting risks, conversion or selling away, you have legal rights and options to pursue recovery of those losses.

Stoltmann Law Securities Investment Fraud Attorneys

Let’s Connect and Talk

Since its inception in March 2005, Stoltmann Law Offices, P.C. has dedicated its practice to representing investors in lawsuits and arbitration claims against brokers, financial advisors, investment advisors, and the companies they work for. Our Chicago investment fraud attorneys offer their clients a combined 35 years of experience fighting for investor rights from offices in Chicago, Illinois and suburban Barrington, Illinois and Downers Grove, Illinois.

The attorneys at Stoltmann Law Offices have dedicated their life’s work to representing investors who have been cheated or defrauded by those professionals they trusted with their hard-earned money and retirement savings, recovering in excess of $200 million for investors over the years.

Tell us your story

The #1 Most Trusted Investment Fraud Attorneys in Chicago

This field is for validation purposes and should be left unchanged.

Trusted Investment Fraud Attorneys Chicago IL