January often marks the end of a rest period. Right after the holiday break, things start to pick back up again. You’ll be happy to know your Dispute Resolution section is hard at work. We are pleased to share an innovative article from Section Executive member, Khalil Mechantaf, Q.Arb. highlighting challenges around power imbalances and to bring you a recap of the ADR Institute of Canada (ADRIC) National Conference. Read on!
Power Imbalance in ADR: Understanding Its Impact and How to Address It, Khalil Mechantaf, Q. Arb
Alternative Dispute Resolution (ADR) has become an essential mechanism for resolving disputes outside the traditional courtroom setting. Whether through mediation or arbitration, ADR offers flexibility, efficiency, and confidentiality. However, one critical challenge that can undermine its fairness and effectiveness is power imbalance. This article explores the key questions surrounding power imbalance in ADR processes, specifically what it is, where it arises, why it matters, and how it can be addressed, along with its consequences, and practical strategies to mitigate its effects.
What is power imbalance?
At its core, power imbalance refers to a situation where one party holds significantly more influence than the other. This influence can stem from financial resources, legal knowledge, experience, emotional resilience, or even structural advantages within a contractual relationship. When such disparities exist, they can distort the fairness of the ADR process, making it harder for the weaker party to assert its rights or negotiate on equal footing.
Power imbalance is not inherently malicious or automatically fatal to the process. In some cases, it can even serve legitimate purposes, such as enforcing compliance with safety standards or environmental regulations. However, when it impedes a party’s ability to present its case or leads to an unconscionable outcome, it becomes problematic and may vitiate the process entirely.
Where does power imbalance arise?
Power imbalance can manifest at different stages of the ADR process. The seeds of imbalance are often sown long before a dispute arises. Standard form contracts drafted by large corporations frequently include ADR clauses that favor the stronger party. A landmark example is the Supreme Court of Canada’s decision in Uber Technologies Inc. v. Heller (2020 SCC 16). In this case, Uber’s arbitration clause required disputes to be resolved in the Netherlands, imposing prohibitive costs on the driver. The Court found this clause unconscionable because it combined inequality of bargaining power with an improvident bargain. Similarly, in Davis v. Amazon Canada Fulfillment Services (2025 ONCA 421), the Ontario Court of Appeal examined arbitration clauses with class action waivers. While the Court upheld Amazon’s clause, it emphasized that enforceability depends on whether the agreement exhibits features such as excessive costs or unfair procedural restrictions, issues that plagued Uber’s clause.
Even when the ADR clause is valid, imbalance can influence the process itself. For instance, a party with greater resources may dominate the selection of arbitrators or mediators, hire multiple experts, or employ aggressive tactics that intimidate the other side. In mediation, the stronger party may control the tone and pace of discussions, leaving the weaker party feeling sidelined.
Power dynamics often peak during settlement talks. A financially strained party may accept unfavorable terms simply to avoid mounting costs. Conversely, a dismissive attitude from the stronger party can pressure the weaker party into concessions. These dynamics are particularly evident in consumer disputes, landlord-tenant conflicts, and contractor-subcontractor relationships.
Why it matters?
Several factors contribute to power disparities in ADR. One important source is informational. Repeat users of ADR processes often possess higher knowledge of rules, strategies, and legal nuances, intimidating less experienced parties. Other sources are structural, such as contractual hierarchies including prime contractor-subcontractor relationships, which can create asymmetries in access to relevant information. Further, the ability to coerce or reward, common in payment disputes, can distort negotiations. The debtor usually has the upper hand in terms of controlling the pace and scope of the negotiations.
Recognizing imbalance early is crucial for neutrals and counsel. Some of the common indicators include deliberate delays of the dispute resolution process or control over essential resources, such as evidence, or dismissive behavior suggesting indifference to the outcome, often seen when one party can absorb losses more easily. Unchecked power imbalance can erode the fundamental principles of ADR. Indeed, given that ADR relies on parties making voluntary, and informed, decisions, when one party feels coerced or incapable of influencing the outcome, this principal collapses.
When safeguards mitigate power imbalance
Mitigating imbalance requires proactive measures.
In Mediation, adjusting the format for preventing influence can go a long way. For example, switching to private caucuses can assist the weaker party, while mediators clarify complex points, ensure collaborative tone, and terminate sessions if a party cannot comprehend or weigh settlement terms.
In Arbitration, arbitrators can impose cost for obstructive behavior, draw adverse inferences from non-disclosure, and encourage procedural good faith, specifically when it is a contractual obligation. Best practices, such as those outlined in the ADR Institute of Canada’s Code of Conduct, emphasize fairness, transparency, and impartiality throughout the process.
Conclusion
Power imbalance is an inevitable reality in many disputes, but it need not derail the ADR process. By recognizing its sources, understanding its consequences, and implementing safeguards, neutrals and counsel can preserve the integrity of ADR and ensure that parties resolve their disputes on a level playing field. Ultimately, fairness in ADR is not just about the outcome, it is about the process that leads there.
ADRIC National Conference, Pathways to Dispute Resolution
This fall, the Dispute Resolution section had the pleasure of sponsoring our Vice Chair, Paulette DeKelver, to attend the ADR Institute of Canada National Conference, Pathways to Dispute Resolution.
The conference brought together lawyers and non-lawyers, all dispute resolution practitioners, from many regions across Canada with the common goals of building connections and sharing diverse and innovative practices. There was much to talk about in mediation and arbitration practices given the speed of change in our current world.
Over 70 speakers presented on topics ranging from military precision in mediation approaches to the impact of tariffs on arbitration, and conflict management in health care to insight on new ADRIC rules for Interim Arbitrators.
The conference hosted 35 informative sessions over 2 days. Two intriguing sessions, among many Paulette attended, were “ADRIC Indigenous Pathways”, a national effort to increase indigenous representation and inclusion in the field of ADR, and “Breaking Patterns, Building Peace”, where Kim Korven, a former prolific divorce lawyer, spoke about using dispute resolution to create genuine psychological safety and redefining the paradigm of divorce. Our Section Executive’s very own Khalil Mechantaf, presented jointly on “Bench to Boardroom: How AI is Redefining the Management of Conflict.” Khalil’s presentation was succinct and practical and yet the points he and fellow panel members made gestured to larger implications for our field as a whole.
Overall the conference sponsorship was a resounding success and helped our section build relationships across sectors and regions and gain many keen insights.
We are looking forward more exciting engagement in the months to come!