You may get to choose a panel without brokerage reps. By Anne Kates Smith, Executive Editor January 3, 2011 Clients who open accounts at broker-dealers must agree to mandatory arbitration if there's a dispute. A proposed rule would give investors more say in who hears their case. Lawyer Jacob Zamansky represents plaintiffs in financial-services arbitration.Currently, arbitration panels, which are authorized to decide claims over $25,000, consist of two public arbitrators and one nonpublic arbitrator. Who are these people? Arbitrators have to have five years of business or professional experience and go through some basic, online training. A lot of retired people -- such as businessmen, teachers and accountants -- enjoy being public arbitrators. It pays, but not a lot. You need some college but don't have to have a PhD; any intelligent person who has gone through some training can do it. Nonpublic arbitrators, or industry participants, are people who've worked in the securities industry. There's a chairman, who could be a lawyer like me. Investors may soon have the option of choosing an all-public panel of arbitrators. But why should they? Doesn't an industry representative have more expertise? There's the issue of bias, sometimes real, sometimes just perceived. When you go into court, in front of a jury, they're ordinary folks, a cross section of America -- and that works pretty well. Juries have no vested interest in the dispute and no specific experience. I don't think there's the need for industry expertise that there was. With millions of people trading stocks in accounts and 401(k)s, investing is not such a mystery anymore. Every once in a while you may have a complicated case involving options or derivatives where you might want an industry arbitrator. The new financial-reform law gives the Securities and Exchange Commission power to prohibit mandatory arbitration. Will that happen? Arbitration works well in the securities industry. Investors win about half the time, although they might recover only a fraction of their losses. Do you end the system or try to improve it? This public-arbitrator proposal is a big improvement. What's the best way for investors to boost their chances in arbitration? Keep good records. A lot of arbitrations come down to "he said, she said." Brokers keep notes, but customers rarely do. They should keep a log and confirm things in an e-mail to their broker.