Expert Determination in Construction: Resolving Disputes Before They Escalate
Construction projects generate disagreements. That is hardly surprising.
Projects are complex, circumstances change, programmes move, variations arise and parties can legitimately reach different views about entitlement, valuation, delay, responsibility or the interpretation of technical requirements.
The problem is not necessarily that disagreements occur.
The real problem is what happens to them next.
A relatively contained disagreement over an extension of time, valuation, variation, technical issue or contractual entitlement can gradually become entrenched. Positions harden. Correspondence becomes increasingly contractual. Consultants and lawyers become involved. Expert witnesses are appointed. What began as a manageable project issue can ultimately become an adjudication, arbitration or litigation involving considerable time and cost.
There is, however, another dispute-resolution mechanism which receives considerably less attention than it perhaps deserves:
Expert Determination.
Having worked for many years as a delay expert and expert witness on major international construction disputes, I find Expert Determination particularly interesting because it uses specialist expertise in a fundamentally different way.
The expert is not there simply to give an opinion.
The expert is there to make the decision.
What is Expert Determination?
Expert Determination is a contractually based form of dispute resolution in which the parties refer a defined dispute or issue to an independent expert, the Expert Determiner, who considers the parties’ positions and determines the matter.
Expert Determination may already be provided for in the parties’ contract or can be agreed after a particular dispute has arisen.[1]
Under The Academy of Experts’ Rules for Expert Determination, the Expert acts neither as an arbitrator, adjudicator nor expert witness. The Expert adopts procedures suitable to the circumstances of the case with the objective of providing an expeditious, cost-effective and fair means of determining the dispute.[2]
That distinction is important.
Expert Determination is not simply a shortened arbitration. Nor is it an expert report which the parties are free to accept or reject.
Under The Academy of Experts’ Rules, the determination is final and binding on the parties.[3] More generally, the effect of an Expert Determination will depend upon the parties’ agreement and the rules governing the particular reference.
The binding effect is contractual: the parties are bound because they have agreed that the matter will be determined in that way.[4]
The Determiner resolves the issue referred to them.
That last point is important because the apparent simplicity of Expert Determination carries an important discipline.
The question referred to the Determiner needs to be clearly defined. The Determiner is not given a general mandate to resolve whatever may have gone wrong on the project. Their authority comes from the parties’ agreement, and the determination must address the particular issue placed before them. [5]
Within the framework established by that agreement and the applicable rules, the process can also be highly flexible. Depending upon the dispute, the Determiner may receive written submissions, request further information, hold meetings, inspect a site or seek appropriate technical assistance before reaching a decision.
That combination of a clearly defined mandate and procedural flexibility is one of Expert Determination’s greatest strengths.
Not the same as adjudication
Expert Determination is sometimes compared with adjudication, particularly in construction, but they are not the same process.
Adjudication may arise under statute or contract and operates within its own procedural framework. Expert Determination, by contrast, is fundamentally contractual: the parties agree to refer a defined issue to an independent expert and agree the basis upon which the expert’s decision will bind them.
The Expert Determiner is therefore not acting as an arbitrator or adjudicator, but as the specialist decision-maker appointed to answer the particular question referred by the parties.
The distinction is not simply procedural. It goes to the source of the decision-maker’s authority and the task they have been appointed to perform.
Why isn’t Expert Determination used more often?
This is perhaps the most interesting question.
In my experience, many people working within the construction industry are familiar with arbitration, adjudication and mediation. Considerably fewer appear to consider Expert Determination when a dispute first emerges.
That is unfortunate, because there is a large category of construction disagreements for which it may be particularly well suited.
Delay and EOT
Is a particular event responsible for critical delay?
What extension of time is appropriate?
What is the time effect of a defined delay event on completion?
Valuation and variations
How should a particular variation be valued?
Was a particular item within the original scope?
What amount is properly due?
Technical and remedial issues
Does an item of work comply with the specified requirement?
What remedial work is actually necessary?
What caused a particular technical failure?
What solution should be adopted?
These issues can become components of very substantial disputes.
But they do not necessarily need to.
Expert Determination can be used not only to resolve monetary disagreements, but also to determine technical questions, remedial requirements and other clearly defined project issues.
That creates a particularly interesting opportunity on live construction projects.
Resolve the issue before it becomes the dispute
This, for me, is where Expert Determination becomes especially attractive.
Construction disputes rarely appear overnight.
They accumulate.
One unresolved variation becomes five. A disputed extension of time affects the next programme update. Questions concerning responsibility remain unresolved. Costs accumulate. Relationships deteriorate.
Eventually the parties are no longer discussing a single issue.
They are preparing competing narratives of the entire project.
By then, resolving the dispute becomes substantially more difficult.
There is therefore considerable value in asking a different question much earlier:
Does this issue really need to become a major dispute?
If the disagreement can be isolated and clearly defined, the parties may be able to refer that issue to an appropriately qualified independent Expert Determiner and obtain a decision while the project continues.
That can help prevent one disagreement from contaminating the wider commercial relationship.
It also allows the subject matter of the dispute to inform the choice of decision-maker.
For a delay dispute, that might be an experienced delay specialist.
For a valuation issue, it might be a quantity surveyor.
For an engineering question, it might be an engineer with expertise in the relevant field.
This is one of the characteristics that distinguishes Expert Determination from many other forms of dispute resolution: the parties can select, or seek the appointment of, a decision-maker who genuinely understands the technical or commercial context of the question being asked.
Expert Determiner versus Expert Witness
This distinction is particularly important because the word expert appears in both roles.
As an Expert Witness, my role is to provide an independent professional opinion.
I analyse the evidence, apply an appropriate methodology and explain my conclusions. In arbitration or litigation, another expert may reach a different conclusion. The competing opinions may then be tested through expert meetings, reports, cross-examination and ultimately considered by the tribunal or court.
The Expert Witness does not decide the dispute.
The Expert Determiner occupies a fundamentally different position.
The distinction can be put simply:
An Expert Witness gives an opinion. An Expert Determiner makes a decision.
That changes the nature of the appointment.
The Determiner must remain independent and impartial, but rather than assisting another decision-maker, the parties have entrusted the Determiner with responsibility for deciding the issue itself.
For somebody accustomed to expert-witness work, that is a significant distinction.
Faster, proportionate and less adversarial
Expert Determination will not be appropriate for every dispute.
Complex multi-party disputes involving extensive factual evidence, substantial witness testimony or difficult jurisdictional issues may require a more formal process.
But where the issue is suitable, the advantages can be significant.
Expert Determination is intended to be quicker, less expensive and less adversarial than many more formal dispute-resolution procedures. Under The Academy of Experts’ Rules, the process is confidential.[6] It does not inherently require legal representation.
That does not mean lawyers have no role.
Legal advice may be extremely valuable, particularly when drafting the agreement to refer an issue to Expert Determination, defining precisely what the Determiner is being asked to decide and ensuring that the process fits within the parties’ contractual framework.
But the dispute-resolution process itself can be designed around the dispute.
A straightforward issue might be dealt with principally through written submissions and project records.
A more technical issue might require a meeting or site inspection.
A more complex determination may require a more structured procedure.
The key word is proportionality.
The dispute-resolution process should not become larger than the dispute itself.
Keeping projects moving
For construction projects, there is another important benefit.
Projects do not stop simply because the parties disagree.
People still need instructions. Contractors still need to programme the works. Employers still need completion dates. Commercial teams still need to understand their financial position.
Leaving significant issues unresolved can create uncertainty throughout the project.
A timely determination of a defined issue can therefore do considerably more than decide who is right and who is wrong.
It can provide certainty.
And certainty allows decisions to be made.
A determination concerning delay may establish the time effect of a defined event or resolve a disputed extension-of-time entitlement.
A determination concerning a variation may resolve its valuation.
A technical determination may establish the remedial solution that should be implemented.
The parties can then move forward rather than carrying the disagreement through the remainder of the project.
Why this matters to me
After more than three decades working around construction projects and disputes, one recurring feature is how relatively small disagreements can develop into very substantial disputes.
By the time an expert witness receives the documents, the project may have finished years earlier. Project personnel may have moved on. Contemporary records may be incomplete. The parties may already have spent considerable sums developing opposing positions.
There will always be disputes requiring arbitration, adjudication or litigation.
But not every disagreement needs to travel that far.
That is why I believe Expert Determination deserves far more attention in construction.
The concept is simple:
Identify the issue. Appoint somebody who genuinely understands it. Allow both parties to present their position. Obtain a determination. Then get on with the project.
For an industry which often spends enormous amounts of time and money dealing with disputes after they have escalated, there is considerable value in resolving the right issues earlier.
Perhaps the most valuable dispute is not the one that is eventually won.
It is the one that was resolved before it had the opportunity to escalate.
Dr Stuart Carmichael is a forensic delay expert, expert witness and Accredited Expert Determiner with more than 35 years’ experience in the international construction industry. His work includes forensic delay and disruption analysis, extension-of-time claims, programme analysis and major international construction disputes.
References
1. The Academy of Experts, Rules for Expert Determination (2023), introductory section, “Expert Determination”.
2. The Academy of Experts, Rules for Expert Determination (2023), Rule 5(1)–(2).
3. The Academy of Experts, Rules for Expert Determination (2023), Rule 5(5).
4. Campbell v Edwards [1976] 1 WLR 403.
5. Barclays Bank plc v Nylon Capital LLP [2011] EWCA Civ 826, particularly [21] and [34].
6. The Academy of Experts, Rules for Expert Determination (2023), Rule 6(3).
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