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Resolving a dispute? New rules for asking an expert

03 July 2008

Alternative Dispute Resolution (ADR) is considerably less ‘alternative’ than it was five years ago. The Academy of Experts, the professional body for expert witnesses around the world, has just published new rules for expert determination.

And as a result of recent case law, plus changes in court procedure and the Solicitors’ Code of Conduct, businesses and organisations trying to resolve disputes must give serious consideration to using ADR. 

In particular, they should look at using expert determination, a form of ADR that is proving quicker and cheaper than traditional dispute resolution methods.

Expert determination

Expert determination has been used successfully as a means of ADR for many years in a number of niche technical arenas; and the professional body for expert witnesses, the Academy of Experts, recently published new rules for anyone embarking upon this form of ADR.

Expert determination is commonly used in one of two circumstances:

Expert determination can also be highly effective during contract negotiations, where time is limited. Appointing an expert to opine on a technical point in pre-contractual discussions could ensure a deal goes ahead, thus preserving a business relationship.

As the whole process is carried out in private, this form of ADR is also advantageous for organisations concerned about the commercial sensitivity of their dispute. And the process is usually quicker, cheaper and more flexible than court proceedings or arbitration, and is therefore suitable for multi-party disputes.

Where’s the catch?

Unless otherwise agreed between the parties, an expert has no power to award costs in favour of the successful party, and parties usually bear their own costs.

But the main disadvantage is the risk of an unfavourable decision, which parties are contractually bound by. Be aware that whilst there is the potential to challenge an expert’s opinion in the courts, there would need to be a clear reason for doing so.

Note, too, that the law on expert determination is not fully settled, and there is no convention for the enforcement of an expert’s decision abroad. As a result, an expert’s remit is entirely dependent on the contractual provisions of any agreement between the parties, and there are no back-up rules of procedure and process.

Getting the most from an expert

Commercial organisations are becoming increasingly sophisticated when it comes to anticipating potential disputes, and as a result many incorporate ADR clauses in their contracts as standard. However, if this is not the case, and it is decided that expert determination is appropriate, a written agreement should be drawn up between the parties, which governs the procedure.

The agreement should include:

In order to be effective, parties must agree the exact wording of the question(s) to be determined by the expert. The parties will then provide such evidence as they think necessary to the expert, and based on this, the expert will decide whether or not to deal with the matter on a documents-only basis or, if it is necessary, to hold a hearing and/or technical examination. Once determination is completed, the expert will issue his decision in writing in accordance with the agreement.

When deciding who to appoint, choose an expert possessing expertise and technical knowledge relevant to the issue in dispute. Both parties must satisfy themselves as to the independence of the expert before their appointment.

The new rules

The Academy of Experts’ new rules are helpful, as they incorporate a simple framework which can be adopted by parties and referred to in ADR contractual clauses.

The rules provide for:

This form of ADR will not be appropriate for everyone, and has its limitations. The new rules published by the Academy of Experts make the process more accessible by providing a simple structure that parties can adopt pre-contract or post dispute.

So expert determination should certainly be considered, and is recommended as a cost efficient, speedy remedy for clients who find themselves in dispute over a technical issue.

To view the new rules in full, please visit http://www.academy-experts.org.

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Alex Bishop

Partner
T: 08700 86 4188
I: +44 (0)121 625 4188
E: alex.bishop@shoosmiths.co.uk