Is Expert Determination a suitable alternative to litigation for you?

Often when a commercial dispute arises, the parties will immediately turn their minds to whether the value of the dispute falls within the jurisdiction of the Disputes Tribunal, District Court or High Court.  However, there are a range of other processes that can be used to resolve disputes, one of these being expert determination.

If the dispute is process driven or specialist in nature then the parties should consider whether expert determination can play a role in resolution of the dispute.  If there is a mixture of legal and technical issues, or if judicial oversight is required for a particular reason, then expert determination may not be appropriate.  Some contracts now require particular disputes to be resolved by expert determination.

An instance where it may be of use would be when there is a dissolution of a business relationship.  In order to resolve the issues shares may need to be valued.  If this was being resolved using litigation then a Judge would need to make decision on the value of the shares.  As the Judge would not have this expertise, both parties would need to provide (and pay for) their own experts to provide their opinion to the Court so the Judge can make a decision on which party’s expert evidence is preferred.  If the parties already know of a trusted expert in a particular area, then they could instead agree to engage them to make the determination.

If the parties agree to, or are required to, use an expert then some of the key points to be considered at the outset are:

• What are the exact issues to be determined by the expert?  For example if there are issues as to value of property, on what basis the value is to be determined – is it market value or replacement value?
• Are there any specific restrictions to be placed on the determination?  For example are there only certain time periods or factors to be considered?
• What information will be provided to the expert and how will this be provided?  For example, will there only be documentation filed or will the expert have a chance to take a more inquisitorial role and speak to whoever they deem necessary?
• What are the timeframes for each step?
• Will the expert’s decision be final and binding?  That is, will the parties have a right of appeal after determination is given?
• How will the expert fees be paid?  Will the parties split the fee equally regardless of the result or will the expert make a determination as to who will pay the costs?

These are just some of the factors to consider.  If the scope and process is agreed at the outset then the process is likely to be much quicker and more cost effective.  Expert determination can be used to resolve an entire dispute or specific issues.  With agreement and clear guidelines as to the process it is an attractive alternative to lengthy and expensive litigation.

At any point during a dispute, the parties should be able to reassess whether the approach they are taking is appropriate.  The parties should be open to taking the opportunity to refine what the dispute is about and how it can be sorted out.  If expert determination could help the parties, they should seriously consider it.  Time spent on reassessing the issues is rarely time wasted.

This article is current as at the date of publication and is only intended to provide general comments about the law. Harkness Henry accepts no responsibility for reliance by any person or organisation on the content of the article. Please contact the author of the article if you require specific advice about how the law applies to you.