The Investment Industry Regulatory Organization of Canada board of directors has approved two changes aimed at increasing investor participation in the self-regulatory organization’s arbitration program, IIROC said Friday.

IIROC is amending the program by increasing the award limit to $500,000 from $100,000, and giving investors the option to eliminate the arbitrator’s discretion to award costs against a party, under certain conditions.

The changes, which are effective immediately for new cases, are the result for consultations from stakeholders.

“We believe that the higher award limit will make arbitration a more viable option for investors,” said Susan Wolburgh Jenah, IIROC president and CEO, in a release.

During the consultations, stakeholders also raised concerns that the potential for adverse legal cost awards against investors could deter them from choosing arbitration as a means of dispute resolution with IIROC-regulated firms.

Under the new rules of procedure, investors can now opt at the commencement of a proceeding to eliminate cost awards, with each party then being responsible for its own legal costs.

Costs against a party can still be awarded where the arbitrator “finds that a party has acted in manner that may be characterized as unfair, vexatious, improper or in bad faith, or where the party’s actions have unnecessarily and unreasonably prolonged proceedings.”

Firms and individuals involved in the arbitration program are also generally equally responsible for arbitration fees, which include costs of the arbitrator’s services and administrative costs.

“Clients of IIROC-regulated firms have access to a number of dispute resolution alternatives and can select the option which best suits their specific needs and circumstances,” Wolburgh Jenah noted.

In addition to arbitration, the other dispute resolution options are:

> the free Ombudsman for Banking Services and Investments, which can recommend compensation of up to $350,000;

> the free voluntary mediation service offered to residents of Quebec by the Autorité des marchés financiers, in which participation is voluntary for both firm and individual; and

> legal action through the courts.

IE