Dispute resolution in the financial services sector

Abstract

This thesis is not about arbitration nor about ADR's (alternative dispute resolution), generally. The thesis mentions arbitration and ADR's as appropriate alternatives (if the context requires) to the resolution of financial services disputes, but does not aim at examining arbitral procedures or principles of mediation in detail. This is done en passant, as the need arises. The aim, on the other hand, is to give an overview of the potential disputes that may arise in the financial services sector, distinguishing between regulatory and private disputes. How should a financial services dispute be defined? How common are financial services disputes and more importantly how are these disputes currently being handled? Chapter 4 examines financial services disputes that have been filed before our courts during the years 2000, 2001, 2002 and 2003. It results for instance, in the banking sector, that 90% of the cases filed by Bank of Valletta plc during the said years, were determined within a couple of months of their being filed, clearly indicating that the cases were either admitted or that the defendant did not bother to defend the case, begging the question whether these disputes should end up in court in the first case. On 25 May 2004, a Bill was published introducing a procedure, applicable to claims that do exceed the amount of Lm5,000, whereby if a judicial letter is filed against a debtor, (in relation to claims that are certain, liquid and due) and such letter remains uncontested for 30 days from notification, then the judicial act will constitute an executive title. This is a positive response to those claims that are not even contested. X owes an amount, X does not even contest the claim - one cannot even speak of a dispute! So why end up in court? Moreover, the Bill is also proposing the introduction of mandatory arbitration in motor traffic disputes and other areas of law such as condominium disputes. Court is only one piece in the puzzle of dispute resolution and the financial services sector cannot remain unaware or indifferent to the benefits offered by arbitration and ADR generally.