Expert Determination

 (Binding)

Expert determination is founded in contract. An independent third party will act as an expert rather than judge or arbitrator, and is appointed by the parties to decide the dispute privately.  There is no right of appeal and the expert’s determination is final and binding on the parties save usually in the case of fraud or manifest error.  Parties will make written and oral submissions to the expert and he or she will then give a binding decision on the case.  It is particularly used in disputes concerning valuation (for example rent reviews, share valuations or price adjustments) or technical disputes across a range of sectors (for example IT, accountancy, supply contracts, oil and gas).

The expression “Expert” is much more commonly used to refer to expert witnesses.  In expert determination, the appointed expert  is not in any sense a witness.

Expert determination clauses govern the jurisdiction of the expert and the conduct of the determination. They should typically cover:

  • the issue(s) to be determined (this must be carefully drafted)
  • the expert’s qualifications, appointment and his duty to act independently, and as an expert not an arbitrator
  • how the reference will be conducted
  • how the decision will be issued (in writing, with or without reasons) and that it will be final and binding save in the case of fraud or manifest error
  • provisions as to the due date for payment and the power to award interest (and sometimes costs)
  • payment of the expert’s fees (these are usually shared between the parties with joint and several liability should one party fail to pay)

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