Dispute Resolution Mechanisms
Depending upon the type of dispute you have and the type of organization you are dealing with there may be several avenues open to you. The following are some of the ways that disputes are resolved.
Small Claims Court
Small claims court provides lower cost access to the court system to sue for small amounts (up to $10,000 in Ontario). It is possible to represent yourself, and guides are available from the small claims court. There is a fee when you file your claim. Unless you have considerable knowledge of both the industry and the legal system it may be appropriate to engage a lawyer to represent you. If you win the judge may award legal costs as defined by the court.
You can negotiate directly with the company. This should be with senior management. If your broker happens to be a bad one, you will not resolve the problem by talking to him. Most individuals will not fare well in this type of negotiation, and therefore it may be appropriate to engage expert assistance.
If the company you are dealing with is a bank, or owned by a bank, you have the option of appealing to the bank ombudsman. If he is unable to resolve your dispute, you can then take your complaint to the Ombudsman for Banking Services & Investments. The advantages of this option is that it is generally low cost, and if you do not agree with the recommendation of the ombudsman you are free to pursue other options.
Regulatory authorities will not get your money back. They may investigate to determine if rules have been breached and may even fine or suspend your broker. Even when rules are breached they may only issue a reprimand. If your broker is disciplined for breach of rules it may help to strengthen your case as you pursue other options. It may be appropriate to pursue direct negotiation or the ombudsman before complaining to the regulators in the event that your broker’s company has the ethics and morality to do what is right and resolve the dispute.
If you are unable to resolve your dispute through direct negotiation or the ombudsman you may be able to engage a mediator to attempt to resolve your dispute. To do this both sides must agree to mediate and then agree upon a mediator. The mediator could be anyone who specializes in mediation. A number of retired judges offer this service. The mediator should be one that has experience with the type of dispute that you have.
Arbitration is another option that is available provided that both sides agree to arbitration and agree upon an arbitrator. If you are dealing with a member of the Investment Dealers Association, there is a program that provides for arbitration provided your dispute falls within certain criteria. If you suit the criteria you can request arbitration and the IDA member is required to participate. This option may be preferable to civil litigation in some cases and has the advantage generally of shorter times and lower costs than civil litigation. The main disadvantage is that the decision is final and binding. So, if you decide on this option you should ensure that you have done everything you can to bring out all of the facts that support your complaint.
Prior to entering civil litigation you should explore all of the options available and determine a course of action that should lead to the resolution of your dispute. You should develop a plan with a time frame. Cases need to be managed and there will be many delays along the way.
While it may be a fairly simple process to initiate a Statement of Claim, you can rest assured that the defense has a large arsenal at their disposal and generally employ delaying tactics. They can agree to court appointed dispute resolution and then opt out at the last minute. They can introduce motions to have the case thrown out which introduces delay to determine court time and additional costs to argue the motion. There are examinations for discovery that can also be delayed. Defense lawyers generally have full schedules and seem to use this as an excuse for further delay.
Therefore, you need to select a lawyer that is well experienced in litigation and also has a good knowledge of the particular industry with which you are dealing. You must be prepared to stay the course. If you do win at court, the defense has the right to appeal to the higher court. If you also win at this level, the defense has the right to appeal to the Supreme Court. In the same way, if you lose, you also have the right to appeal.
It is because of the length of time and the costs involved to pursue a case to completion that many investors will agree to an out of court settlement to resolve their dispute.
The Final Resolution
In order to prepare yourself for resolving the dispute you will need to consider your situation. Generally, any offer to settle will be for an amount which seems less than you consider fair, but you must consider several factors.How long will it take to get a court decision?
These are issues that you will face during your pursuit of resolving your dispute. The decisions you will be faced with should be made by you in consultation with expert help. You need to be aware of all the alternatives and you need to understand the costs in money and time. Your decision on how to proceed is yours alone. Good Luck!
The Good News
Many investors have resolved their disputes by various means. A few have been able to negotiate settlements for themselves. They are the minority. Many have employed experts to negotiate on their behalf and have been successful in gaining restitution. Some have gone to ombudsmen to have their dispute resolved. Many have used mediation and arbitration to resolve their disputes. Many have started civil litigation and settled out of court by negotiation or mediation. Some have gone to court and received settlements. Armand Laflamme fought for ten years and received a Supreme Court decision. There are a number of court decisions that provide support for investors in their civil suits.
To have your dispute resolved you simply need the determination to pursue your complaint. Submitting your complaint to the regulators may provide you with some ammunition, but it will not get your money back. You need to pursue a course of action aimed at getting restitution.