Expert determination is a form of alternative dispute resolution (ADR). It provides a simple, cost-effective dispute resolution method for certain commercial disagreements, particularly disputes concerning valuation or a technical matter that’s likely outside a judge’s expertise. In this brief guide, we answer some of the most common questions concerning the expert determination process and procedure.
What is expert determination?
Expert determination is when parties to a dispute appoint an independent expert who typically possesses specialised knowledge and expertise in a specific field related to the dispute. The expert is asked to resolve the dispute by evaluating the evidence, applying their expertise, and providing a binding or non-binding determination, depending on the parties' agreement.
What are the key features of expert determination?
The key features of expert determination are:
- Expert's decision - the appointed expert provides a decision on a technical issue, often referred to as an ‘award’ or ‘determination’, which the parties usually agree to be binding
- Specialised expertise - expert determination relies on the knowledge and expertise of the appointed expert (their specialised skills enable them to evaluate complex technical, scientific, or industry-specific issues related to the dispute)
- Informality - compared to court proceedings, expert determination is generally a less formal process (it offers parties greater flexibility in choosing the expert, determining the procedure and conducting the proceedings)
Is expert determination confidential?
Expert determination is a private process and the parties can agree contractually to keep the details of any award confidential.
Expert determination advantages and disadvantages
By understanding both the advantages and disadvantages, you can make informed decisions about whether expert determination is the right approach for your specific dispute. The advantages of expert determination are:
- Expertise
- Speed and efficiency
- Cost-effectiveness
- Flexibility
Expertise – the opportunity to resolve a dispute by an independent expert with specialised knowledge and experience in the relevant field. This expertise can lead to a more accurate and informed decision, particularly in technical or valuation disputes.
Speed and efficiency – it’s generally faster than arbitration or litigation. Parties can avoid lengthy and stressful court procedures, allowing for a quicker resolution. Additionally, the informality of the process allows the parties to be flexible regarding how the process will be conducted.
Cost-effectiveness – due to its streamlined nature, it can be more cost-effective than court litigation. The process generally incurs lower legal fees, as parties can avoid adhering to strict court procedures or engaging in lengthy trials.
Flexibility – as it gives parties flexibility in selecting the expert, defining the procedure, and determining the scope of the expert's decision. This flexibility allows parties to create a bespoke resolution process.
The disadvantages of expert determination are:
- Not suitable for disputes involving legal issues
- Finding the right expert
Not suitable for disputes involving legal issues – expert determination is most effective for technical, factual, or industry-specific disputes. It may not be suitable for disputes involving complex legal issues such as contract disputes or allegations of negligence.
Finding the right expert – choosing an independent and impartial expert with the necessary expertise can be challenging. Parties must select an expert who is trusted, respected, and capable of providing a fair and unbiased determination.
Is expert determination binding?
In England and Wales, expert determination is enforceable under contract law if parties sign a legally binding agreement in line with the expert’s findings and decision.
What is the difference between expert determination and arbitration?
Unlike arbitration, which is governed by the Arbitration Act 1996, no legislation governs expert determination. The timescales between the two dispute resolution processes are also vastly different, with arbitration taking around 18-24 months (international disputes tend to be at the higher end). Expert determination, on the other hand, is an (approximately) three-month process.
In addition, when it comes to the hearing, expert determination usually involves the parties each providing a statement of facts and submissions. Arbitration hearings are similar to court proceedings, where the parties can call witnesses (including expert witnesses) and usually have to provide oral evidence in person.
Get legal assistance from LawBite
Expert determination is a valuable and efficient tool for small businesses seeking to resolve disputes. By using experts in a particular field, this alternative to regular proceedings offers many benefits, including quick resolutions and savings in time and resources. The experts' knowledge helps make fair and well-informed decisions.
However, it’s important to be aware of its limitations. While it offers speed and efficiency, it may not have the same legal safeguards as traditional litigation. Therefore, parties should carefully weigh these limitations against the benefits before choosing expert determination as a dispute resolution method.
To ensure that any award from expert determination is enforceable and to navigate the complexities involved, it’s advisable to seek legal assistance. Our commercial lawyers are skilled at drafting submissions and making contractual provisions that maximise the benefits of expert determination while minimising any potential drawbacks.
We have extensive experience in supporting small businesses with all forms of ADR and we offer expert guidance to help you resolve disputes. We can also support you with adding an expert determination clause to your existing commercial agreements. To learn more about how we can assist you, book a free 15 minute consultation today or call us on 020 3808 8314.
