In Parada v. Superior Court, No. G041339 (Cal.App.4th 2009), the California Fourth District Court of Appeal held that an arbitration clause in contracts between an investment company and its customers requiring a three-arbitrator panel was unconscionable, and therefore unenforceable, where the company failed to justify it. The court held that the arbitration provision was unconscionable because it was "deliberately for the improper purpose of discouraging or preventing its customers from vindicating their rights." The court noted that the investment contracts were "contracts of adhesion," because they were drafted by the party of superior bargaining strength and left the other parties merely the ability to accept or reject them. The court concluded that investors would have difficulty paying the high costs of using three arbitrators and the investment company failed to explain the need for multiple arbitrators.

This decision provides support for the notion that, when a wide disparity of bargaining power exists between parties (and particularly where one party is an individual), the stronger party cannot require the weaker party to submit to a three-arbitrator panel, at least not without some justification.