The Investment Dealers Association of Canada (IDA), which functions half as a regulator and half as the brokerage industrys trade group, is pushing to have an arbitration system in place by year-end.
Although Quebec and British Columbia have had exchange-run arbitration systems in place for the past several years, and the IDA recently installed its own system in Ontario, investors have been slow to embrace the practice.
We believe there are advantages to arbitration for investors as well as our members, and we intend to move this practice forward on a national basis, says Joseph Oliver, president of the IDA in Toronto.
Under an IDA proposal, the trade group would create a system of provincial-based arbitration forums run by independent dispute resolution firms. The IDA would like the panels to be made up of retired judges and lawyers. At least one member of the three-person arbitration panels would be from outside the industry.
Oliver says the key to the programs success will be getting the word out about the benefits of arbitration. But that message has not taken root in Canada. Since 1993, when arbitration was introduced in British Columbia, only 25 cases have been heard. The IDA believes almost three-quarters of the cases that now end up in court could be steered into arbitration.
Although most IDA members support the initiative, some in the industry have concerns.
Im not sure the industry needs an all-out effort to tell customers how easy it is to fight their brokers, especially now when we may be facing a bear market, says one Toronto-based rep.