Table of Contents
When you fall into a commercial dispute with another company, you must choose a way to resolve it. One method is the use of expert determination, which involves using an independent expert to make a final decision on your matter. As an alternative dispute resolution (ADR) method, it is a less formal and more cost-effective option than litigation. However, expert determination may not always be suitable for your dispute, and you should be aware of some of its downsides. This article will explain the disadvantages of using expert determination for your commercial dispute.
What is the Expert Determination Procedure?
There is no specific procedure for expert determination. Instead, it is up to you and the other party to decide, as you are not tied to any legal framework. Therefore, you will usually outline how the expert determination process will work in your business contracts. This is often explained in a ‘terms of reference’ document accompanying the contract. If the agreement does not outline this, you will decide the procedure once you fall into a dispute. At this point, you will also need to choose an expert in the field in dispute to make a binding determination.
Although there is no set procedure for expert determination, you should still note some key considerations to address, including:
- what the timetable will be;
- if oral hearings will be required;
- whether parties need to make written arguments (submissions) and the detail needed for this; and
- if you want the expert to give you reasons for their decision.
What Are the Disadvantages of Using Expert Determination?
Although understanding expert determination procedures is helpful, it is also useful to consider its benefits and disadvantages when evaluating its suitability for your dispute. We outline some key disadvantages of expert determination in more detail below.
Expert Determination Process
As there is no process that you are legally required to follow for expert determination, you will have likely included it in your contract with the other disputing party. Whilst this could help build an agreeable proceeding, the determination process is now restricted by the details in the contract. This means that you cannot take more flexible steps that you may find helpful if they are not in line with the contract.
A further disadvantage of the process is that it may not be suitable for the issues in your commercial dispute. Generally, expert determination is ideal for technical issues that require specific knowledge or expertise. However, if your dispute concerns factual areas of the contract or legal interpretation, expert determination may not lend itself well as a dispute resolution method.
Decision Appeal
Additionally, one of the disadvantages of using an expert determination is the limited rights to appeal the expert’s decision. If the decision is wrong, you may have to accept it. You can only appeal an expert’s decision in certain circumstances, such as if the determination procedure itself was unfair. Furthermore, if you do decide to appeal an expert determination decision, this can increase costs and decrease the finality of the dispute resolution process.
Decision Enforcement
A final disadvantage of expert determination for a commercial dispute is that you may need to exert extra effort to enforce the decision. Although the decision is binding, you may find the other party ignores it. If so, you will need to enforce the expert’s decision, which usually requires legal action. Unfortunately, this will likely be both time-consuming and costly.
This fact sheet outlines how your business can manage a dispute.
Call 0808 196 8584 for urgent assistance.
Otherwise, complete this form and we will contact you within one business day.
Key Takeaways
Expert determination is an alternative dispute resolution (ADR) method to attempt to agree on your commercial dispute. An expert is appointed who will make a binding decision on the business disagreement. There is no specific procedure for expert determination, and instead, you and the other party will agree on one. Although expert determination may be suitable for your commercial dispute, there are disadvantages to this dispute resolution method. These include:
- potentially restrictive determination processes;
- limited avenues for appeal; and
- possibly costly enforcement measures.
If you are still unsure about if expert determination is right for your commercial dispute, LegalVision’s experienced disputes lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
We appreciate your feedback – your submission has been successfully received.
