National Futures Association (NFA) has resolved disputes in the commodity futures industry since 1983. NFA’s arbitration forum is generally cheaper, faster, and less formal than civil litigation or other dispute resolution forums. In 1991, NFA incorporated mediation into the early stages of the arbitration process, giving the parties more control over the outcome of their dispute.

How does mediation differ from arbitration?

Arbitration is an adversarial process. An independent third party (an arbitrator) decides who is right, who pays, and how much.

Mediation is a settlement process. Parties don’t win or lose in mediation. Instead, they work together to find a solution they can both live with. An independent third party (a mediator) works with the parties to help them find that solution. The mediator does not decide who is right. The mediator also does not decide who pays or how much — only the parties can do that.

Who will mediate my case?

If the total claim amount in your case is $150,000 or less, your case will be referred to Joan Protess & Associates. If the total claim amount is over $150,000, your case will be assigned to one of several NFA attorneys who are trained mediators. In either case, the mediator is familiar with the futures industry.

You may also choose another mediator at your own expense. NFA has a list of mediation services that you can use.

When is the mediator appointed?

NFA appoints the mediator as soon as the parties have filed their claims and answers in the arbitration case. NFA will tell you who the mediator is, and the mediator will then contact you to explain the mediation process.

How much does mediation cost?

NFA pays for the mediator if you use the service selected by NFA (Joan Protess & Associates for claims of $150,000 or less or NFA’s in-house program for claims over $150,000). However, the parties must pay the mediator’s travel expenses if the parties ask the mediator to hold an in-person mediation conference outside Chicago. You must also pay your own travel expenses, your attorney’s travel expenses, and your attorney’s fees.

How does a mediation conference work?

The mediation conference can be held over the telephone or in person. The mediator will normally talk to the parties jointly. The mediator may also talk to the parties separately in order to encourage free and open communication.

Do I have to mediate?

Mediation is purely voluntary. You don’t have to mediate at all. If you decide to mediate, you can still withdraw from mediation at any time before you reach a settlement.

Reaching a settlement is also voluntary. No one can make you accept a settlement offer you do not like.

Are the parties bound by a mediated settlement?

The settlement you reach in an NFA mediation is a contract that can be enforced in court just like any other contract. NFA Members and Associates can also be suspended from NFA if they do not pay a mediated settlement.

How likely is it that my case will settle?

Every case is different. However, approximately 70 percent of NFA mediations result in settlement.

What happens if we can’t settle our dispute?

If either party decides not to mediate, or if mediation is unsuccessful, your case will be decided by NFA arbitrators.

If mediation fails, will it hurt my arbitration case?

Any statements or offers the parties make during the mediation are confidential and cannot be used as evidence in the arbitration.

Will mediation prolong my case?

Mediation will not prolong the arbitration proceeding. Cases that are mediated follow the same arbitration timeline as cases that are not mediated.

Conclusion

As you can see, mediation allows you to control the outcome of your dispute. NFA mediation also:

• Provides a trained professional to help you reach a settlement;
  
• Is provided free to the parties;
  
• Is voluntary; and
  
• Is confidential.