Driver Trett Digest | Issue 20 - Magazine - Page 21
DIGEST | ISSUE 20
What is it?
In its simplest form, it is the parties to a dispute
appointing an independent third party, “the expert”, to
exercise their professional expertise, experience and
knowledge to decide upon issues that are the basis of
the dispute.
The resulting determination can be binding or nonbinding and can arise either from a process provided for
in the contractual agreement between the parties, or
from a separate agreement that the parties choose to
enter into outside of the contract provisions (commonly
described as an ad-hoc arrangement).
Expert determination is bound by the contractual
framework surrounding it and is not subject to any
specific legislation. As a consequence, it can be a very
flexible process and the details of it are often open to
the parties to negotiate and agree.
ADR:
Independent
expert determination
Peter Banathy
Regional Director, Driver Trett
Middle East and Africa
Alternative dispute resolution (ADR) comes
in a variety of forms and fundamentally
means a process of resolving a dispute other
than through litigation.
With specific regard to the engineering and construction
industry, it commonly means a process alternative not
only to litigation but also to arbitration.
Typical forms of ADR include conciliation, mediation,
adjudication, and expert determination.
This article addresses expert determination, what it is,
why it is seemingly becoming more popular, especially
in the Middle East, and how in the right circumstances it
can operate to the advantage of the parties to a dispute.
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For example, the parties may agree that the process
should be concluded on a “documents only” basis with
a set timeline for exchanges of submissions. For large
and/or complex issues, expert determination may
provide for multiple rounds of document submissions,
together with a hearing or hearings.
As well as ensuring that the expert has
the relevant skills and experience to
address the matters in dispute, there
are various other considerations for
the parties for the appointment and
process to be effective.
The selection of the expert needs to be carefully
considered such that the person appointed has the
necessary skills and experience to understand and
address the key issues of the dispute. As a dispute
can often relate to a number of technical and legal
matters, it is always worth considering allowing for the
involvement of specialist support to the expert (for
example on specific technical or legal matters).
Experts can be appointed by a nominating body, such
as the RICS or the Chartered Institute of Arbitrators
(CIArb) and nomination via such bodies is often
prescribed where contracts contain provision for expert
determination.
In other instances, especially under an ad hoc
arrangement between the parties, it may simply be
by agreement between the parties as to the relevant
expert to appoint.
As well as ensuring that the expert has the relevant
skills and experience to address the matters in dispute,
there are various other considerations for the parties
for the appointment and process to be effective.
For example, the expert should:
Be free from any conflicts of interest;
Act with impartiality and fairness;
Have appropriate availability aligned with the
timetable set out for the process;
Agree procedure or terms of reference to allow
the expert to make their own enquiries and
where necessary use their experience to draw
conclusions from the evidence they have been
presented with;
Manage the overall process within the framework
of the agreed process.
The conclusion of the process is typically reached when
the expert furnishes the determination to the parties.
This should articulate the decisions of the expert clearly
and provide reasoning so as to enable the parties to
understand the full basis of the determination.
Why is expert determination increasing
in popularity in the Middle East?
Across the Middle East, expert determination has
become increasingly more common over the last
eighteen months or so. In particular, I have seen a
marked increase in the number of ad-hoc agreements
entered into by parties in dispute.
So why is this the case?
Expert determination as described above can, subject
to agreement between the parties, be a very flexible
process tailored to suit the nature, size and complexity
of the dispute(s).
Typically, the process is shorter in duration and much
more cost effective than litigation or arbitration. In
addition, the parties usually have an opportunity to
influence the choice of the expert undertaking the
determination, thus ensuring that the matters are
reviewed and determined by an individual (possibly
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