What’s the difference between expert determination and arbitration? Is there a difference? Yes there is, and a Caledonian court spelled it out
The adjudicator I was talking to the other day got a tad rattled. He was hurt. I told him of an email I had received from a party who’d just been through an adjudication. My correspondent was fed up because he was convinced that yet again he’d been “lumbered with some idiot adjudicator”, who’d decided the dispute regardless of any submissions or evidence put forward. My rattled adjudicator friend blinked. “Is there any other way?” he asked. “It’s rough justice … a crude high-speed device to resolve disputes.” He was on his high horse by now. I slid down my chair, hid behind my gin and tonic.
Ten years ago this Construction Act adjudication malarkey was a babe-in-arms. Truth is, we didn’t know what it was.
Twenty-eight days to decide a construction dispute? Wow! Toss a coin. Yes, 28 days from knowing zero about the dispute to producing a binding decision about extensions of time, change orders, the meaning of a contract term, the quality of the brickwork. Zero to hero. Those days we lived in a world where the same dispute would usually take 28 months – if you were lucky and pushy. So, what is it? Arbitration on skates? Expert determination? Something in between?
The Court of Appeal in Scotland recently contrasted arbitration with expert determination. It’s a case called MacDonald Estates vs National Car Parks; I’m obliged to MacRoberts solicitors for sending it to me.
It’s one of those disputes about developing the site for a specific client, then leasing it to that client. The dispute procedure in the contract(s) talked of appointing an architect in the capacity of “independent expert”. The architect did his stuff and made his binding award. Then a debate broke out about putting certain points of law before the Scottish court. One side said that the expert determination clause in the contract was an agreement to arbitrate. If that is correct, there was a right to take points of law into court then back to the expert architect. Wrong, said the opponent. So did the influential Scottish appeal court. It said that there was a significant difference between expert determination and arbitration. The discussion may well help my rattled adjudicator friend.
The court reflected on modern commercial needs in dispute management. It said: “Expert determination, in particular, can be broadly distinguished from arbitration in not being judicial in character … A person who sits in a judicial or quasi-judicial capacity, as an arbitrator ordinarily does, decides matters on the basis of submissions and evidence put before them, whereas an expert, subject to the provisions of their remit, is entitled to carry out their own investigations and come to their own conclusion regardless of any submission or evidence.”
So, here we have a dispute resolution clause that requires an expert (of whatever sort) to consider the dispute and make a binding decision that can’t be challenged and is not a “judicial process”. Can you see the difference? And let me add this: it is not unusual for a final account on a building contract to come for binding expert determination instead of adjudication or arbitration.
So the expert is not adjudicating. Instead they are behind closed doors carrying out their own investigation and reaching their own conclusions. The expert process has none of the trappings of a legal process and is much the same as an architect’s certificate or a QS’ valuation. It is merely reaching an opinion in whatever way the expert thinks fit. And 10 years ago, it’s what some thought adjudication was all about.
By 2002, Judge Humphrey Lloyd helped point the way. He said: “Adjudication is closer to arbitration than expert determination.” He said that because it was argued that an adjudicator could reach a decision in their own way as might an independent person concluding an expert determination. No, no it’s a judicial process, albeit one that those familiar with the grinding detail of the traditional approach to resolving construction disputes readily recognise.
Adjudicators can prod the submissions and evidence, lift them, sniff them; swallow them or spit them out. But they aren’t conducting an expert determination.
Tony Bingham is a barrister and arbitrator at 3 Paper Buildings Temple