Expert Determination?

Expert determination is usually provided as a mechanism to resolve disputes relating to valuation or technical questions. It can be used for more general dispute resolution but is best suited to resolving issues, or filling gaps in the parties' bargain, that depend upon the exercise of judgement by the expert based upon the application of his expertise to the facts presented to him.

The power of the expert to make a determination binding on the parties depends on the clause in the underlying contract. Similarly, the procedure that the expert adopts depends upon the relevant clause and any subsequent directions by the expert. Frequently, experts adopt an inquisitorial, investigative approach without any formal hearing and therefore it can provide a simpler, quicker and cheaper mechanism than arbitration.

In the UK, expert determinations are subject to little or no control by the court and (subject to the contract) there is no right of appeal. However, the expert's determination is not enforceable as such. It does create a contractually binding obligation, but unless complied with voluntarily, court or arbitral proceedings are necessary to enforce the expert's decision. Therefore expert determination is unlikely to be attractive where international enforcement is required. Outside England and the other common law jurisdictions, there are comparable procedures in Germany, France, Italy, the Netherlands and Scandinavia.

"[Subject to ADR Clause ] any dispute arising out of or connected with [specify clause] shall be referred for and resolved by expert determination as follows:

Either party may initiate an expert reference under this provision by proposing to the other party the appointment of an expert (the "Expert").

The Expert shall be [appropriate discipline or selection of disciplines] and shall be appointed by agreement between the parties or, failing agreement within 14 days of the initiation of the reference, by the President for the time being of [appropriate appointing authority] (the "President") on the application of either party.

The parties shall request that the Expert determine the referred dispute within 30 days of receiving the reference.

If the Expert has been appointed but is unable or unwilling to complete the reference, another Expert shall be appointed by agreement between the Parties or, failing agreement within 14 days of the parties being notified that the Expert is unable or unwilling to complete the reference, by the President on the application of either party.

The Expert shall act as an expert and not as an arbitrator.

The Parties shall have the right to make representations and submissions to the Expert. There will be no formal hearing.

Each Party shall make all relevant documents and information within their control available to the Expert.

The decision of the Expert shall, in the absence of fraud or manifest error, be final and binding on the Parties.

The costs of and incidental to the reference shall be awarded by the Expert as he or she thinks fit.

The amount if any which becomes payable by one party to the other as a result of the Expert's decision shall be due and payable within 7 days of publication of the decision, unless the Expert orders otherwise. Interest will accrue at the rate of 5% above the base rate from time to time of [Clearing Bank] on any sum which is due and payable as a result of the Expert's decision but which is late."

Please refer to the External Links Expert Appointing Bodies section for a list of institutions who will appoint experts.