Has a stockbroker or financial planner done you wrong?

You might try mediation as a way of getting some money back. Mediation is an alternative to a lawsuit (your ultimate recourse in a dispute with a planner) or to arbitration (mandatory in disputes with brokers).

Most commonly, aggrieved investors will first file the lawsuit or a request for arbitration.

Then the parties exchange documentary information relevant to the dispute (although your lawyer may have to hammer the broker or the planner to get it). After that, the cases usually settle without a formal hearing, especially when experienced lawyers are involved.

"We tend to know where cases will come out,'' says Orlando attorney Robert Dyer," and settlement saves time and money."

Inexperienced lawyers, demanding clients, and pigheaded brokers, however, may press for better deals than they're likely to get. That's when mediation is helpful, Dyer says.

As a neutral third party, the mediator can assess the strengths and weaknesses of each party's position and offer a reality check.

Here's how mediation works. Both sides agree on a mediator, chosen from a list of experienced people whose professional backgrounds are disclosed.

"You want someone who understands the industry,'' says attorney Tom Giachetti of Stark & Stark in Princeton, N.J.

The proceeding starts with a general meeting, where the adversaries and their lawyers present their evidence and their views. Each side then retires to a separate room. The mediator speaks privately to each. He or she explains the relative merits of your case, probes for what you'd need to accept a settlement, and conveys (with permission) the irreducible needs of the other side.

Settlement offers and counter-offers are then carried back and forth. The mediator can't dictate a deal, although he or she can lean on one side more than the other. In the end, the parties will reach a compromise themselves.

Attorney Tom Grady of Naples, Fla., says mediation helps especially when your case is morally strong but legally flawed; when the other side is liable but the damages are unclear; and where there's bad blood between the adversaries.

"It's hard to believe that you can bring combatants into a room and get them to agree to a solution in a day, but the dynamics of the mediation process make it work," says Rick Ryder, editor of the Securities Arbitration Commentator in Maplewood, N.J.


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