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As a business owner, you may encounter a commercial dispute in which you and another party disagree on a business issue. When this occurs, you must find a method to resolve the business disagreement. If your disagreement is about technical rather than legal issues, you may wish to implement an expert determination clause and appoint an independent expert. This article will explain key considerations for expert determination clauses in commercial disputes.
What is Expert Determination for My Commercial Dispute?
Expert determination is an alternative dispute resolution (ADR) method for resolving a commercial dispute. Further, it is convenient for resolving business disagreements over technical matters. Therefore, you may use expert determination where you and the other party agree on the law relevant to the case and the facts of the dispute but not on the technical details. When you use expert determination to resolve a commercial dispute, you use a person who is a specialist in the technical matter rather than in legal areas.
What Do I Need to Consider for an Expert Determination Clause for My Commercial Dispute?
Before looking at key considerations, it is important that you work with a solicitor to ensure that your expert determination clause is carefully drafted. This will allow you to resolve a dispute more effectively.
Terminology
It is crucial when drafting an expert determination clause in a commercial contract that the word ‘expert’ is used throughout to ensure that the clause is not misinterpreted. If the precise term is not used, it could be construed that the person referred to is, for example:
- a mediator;
- an arbitrator; or
- another form of adjudicator.
Expert
A consideration for your expert determination clause is your and the other party’s definition of an expert. As you and the opposing party choose the expert, it is essential to clearly identify the individual. However, both parties may not be able to agree on who the expert will be. As such, the clause also needs to include what will happen in this situation. For example, it may say that an expert body or other organisations will appoint an expert for you both.
The expert determination clause should also detail whether the expert’s decision is final or methods that can be used to challenge the decision where required. You may consider whether the expert can decide on all the issues in the commercial dispute or only certain issues. An expert determination clause may also say whether or not the expert needs to give reasons for their decision.
Procedure
When you use expert determination to resolve your commercial dispute, it is up to both parties to decide how this will work in practice. It is not always necessary to make the procedures detailed and final in the expert determination clause. However, it is helpful to give an outline that allows both parties to understand where to start when finalising this clause.
This guide outlines how to resolve commercial disputes.
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Key Takeaways
If you are involved in a commercial dispute, you may use expert determination. As such, both parties must appoint an expert to resolve the dispute. This is an effective and flexible way to resolve commercial disputes where the problem is technical rather than legal.
If you wish to use expert determination, you should ask your dispute solicitor about the expert determination process and draft an expert determination clause in your contract. The clause should ensure the term expert is used throughout. Moreover, it should deal with issues such as what will happen if you and the other party can’t agree on who to appoint and set out the procedure you should follow.
If you need help understanding expert determination clauses in the UK, our 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. So call us today on 0808 196 8584 or visit our membership page.
Frequently Asked Questions
An alternative dispute resolution (ADR) involves a range of processes that serve as an alternative method to litigation. Methods under ADR are often very cost-effective, focusing on preventing and minimising the risk of disputes.
If a dispute occurs regardless of these prevented measures, you can choose another method of ADR, such as mediation or negotiations, which focus on minimising risks. If the issue begins to escalate beyond the suggested methods, you should contact a lawyer to discuss additional options.
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