Expert Determination Of Construction Disputes: The Pros And Cons

Kendall on Expert Determination defines expert determination as a means by which the parties to a contract jointly instruct a third party expert to decide an issue between them.1 The classic use of expert determination, historically, has been for disputes such as rental disputes or share valuations. However, in the construction field it can be used very effectively for technical issues, where true expertise is required to reach a decision, or for valuation disputes where liability has already been determined.

Expert determination remains, however, one of the least used tools in the dispute resolution toolbox for construction disputes. This is despite the fact that, when used appropriately, it can be a cheap, quick and effective form of dispute resolution. The fact that there are very limited grounds indeed for appealing an expert determination can also be a benefit, although conversely the risks of that often put people off using it.

In this Insight we look at the pros and cons of using expert determination in the context of construction disputes and examine in what circumstances parties may want to think about using it in priority to the more common forms of dispute resolution such as arbitration, adjudication or litigation.

The Pros

Quick and cheap

Expert determination is a quicker and cheaper procedure than arbitration or litigation which can often take in excess of a year, even years, to reach a conclusion. Although the exact time limits will depend on what the parties have provided for within their contract, typical time limits are likely to be close to an adjudication timetable (i.e. a matter of a few months rather than years). However, given the existence of statutory adjudication for construction contracts, the quick timetable is arguably less of an advantage than it could be in other sectors. Equally this may also make it more useful in circumstances where the Housing Grants, Construction and Regeneration Act 1996 (the "Housing Grants Act") does not apply (for example, on pharmaceutical or nuclear projects).2

The shorter timetable (and the fact there is typically a panel of one expert for any given determination) also helps keep costs down. Unlike arbitration and litigation, where experts are often appointed by the parties to inform the Judge or arbitrators of their expert opinions, expertise is "inbuilt", with an expert determination again saving on costs.

Less likely to damage commercial relationships

It is generally thought that an expert determination is less likely to damage commercial relationships going forward than litigation or arbitration. This is due to a number of factors...