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Expert adjudication
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Dispute A was most gentlemanly. There were no ladies involved although it later transpired that the dispute resolution clause in the contract had been drafted by a lady solicitor, Needless to say the parties were given a decision and presumably one was more satisfied than the other, Dispute B was rough. The parties had been to court twice previously. The first time the case had been adjourned on account of the expert determination clause in the contract. The second time on a construction summons when the Judge determined on his construction of the dispute resolution clause that all disputes had to be put before an expert. This Judgement was confirmed in the Court of Appeal. Needless to say all correspondence written by the appointed expert adjudicator was on legal advice but that did not prevent a writ to the High Court being taken out by one of the parties in an endeavour to overturn his appointment. Both the President of the appointing authority and the expert adjudicator were quickly out of the case but it took a week of argument for the Judge to decide that the expert adjudicator was validly appointed. Smooth though the progress of Dispute A was, there are still lessons to be learned from how the case went. Neither party fielded lawyers although it was clear that they were taking legal advice behind the scenes. One party submitted a filing drawer of documents and that probably doubled the cost of the adjudication. Like all other tribunals an expert adjudicator has to decide on the balance of probabilities according to the evidence put before him and so all the documents have to be looked at and studied. Perhaps the amount of documentation could have been reduced as two of the three issues referred to the expert adjudicator were settled before he came to consider the matter. As it was, all the documents were considered and an 'Adjudicator's Report to the Parties' was prepared to identify the controvertible evidence considered relevant. There was no substantial matter brought up later that was not in the report so while it was probably more expensive to have the adjudicator prepare the report it was very clear what the facts were on which the decision was going to be based and there was ample opportunity to draw attention to other facts, The parties in Dispute A made written submissions and there was a one day aural hearing. A decision was subsequently given. The whole process went well. There was some unfairness on the parties in that they were delayed by the court action in Dispute B but that is a hazard of any system of dispute resolution, The dispute resolution process in the contract in Dispute A contained potentially difficult problems but although some of these were raised the parties were agreed that what they
wanted was a decision from the expert adjudicator and they were not going to be deflected into a court action. Difficult problems that could have arisen were a"disputes over matters of law to go to legal adjudicators and technical disputes to go to expert adjudicators" clause. It is easy for a lawyer to draft such a clause but it contains possibilities for creating disputes. Who deals with technical matters of law? Who deals with mixed facts and law disputes? Is a Registered Arbitrator sufficient of a lawyer to handle disputes in matters of law? Such clauses can easily ensure that the first step in the dispute resolution process is to go before a judge in order to find out whether a lawyer or an expert is to determine the matter. Such a trial can easily (as it did in Dispute B) take longer than it ever would to resolve the dispute itself. Another potentially difficult problem in Dispute A was that the appointing authority for the expert adjudicator was a trade association. There is nothing that can be said about the conduct of any body but surely professional bodies are more independent than trade associations. A legal hook for an argument by a lawyer was provided in the specifications. All the deliverables were subject to approval by the customer. Fine for the customer but if all the prior agreements on what was to be done were subject to the customer's final agreement on delivery what was there in the contract more than an agreement to agree and that is no contract. As an aside we would say that this is a customer's trap equivalent to the UK Unfair Contract Terms trap that came to light in 1992 in Salvage Association v CAP Financial Services Ltd for suppliers. (See further p. 206 of this issue). We do not know what caused such conflict in Dispute B. There was ongoing business between the parties and they quite happily extended the contract between themselves while engaged in what can only be described as guerilla warfare over the conduct of the expert determination. We can only rationalize by presuming that one party expected an 'expert' to arbitrarily decide in their favour almost in the manner of a managerial decision and the other party feared that that is what the expert would do. The prior litigation in Dispute B had warned the expert adjudicator of the trouble ahead. Nothing was aural and everything he said in writing was after taking legal advice on the drafting. Even the terms of appointment were never agreed by one party. The acceptance of his appointment said that the determination would be conducted on the basis of natural justice and it was spelt out as what that was taken to be. The litigating party endeavoured to persuade the appointing authority that they could de-appoint the expert adjudicator and this they portended to do. As the trial judge confirmed that the appointment was valid it would seem that that appointing authority acted on unfounded legal advice. Once the Court had confirmed the expert adjudicator's appointment a meeting was called with the parties. Everyone came to the meeting with different expectations, doubtless because some fudge had been essential or the parties would never have turned up at all. The expert adjudicator sought agreement on his remuneration but obtained a rebuff from
174
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Counsel who would never agree a contract under which he could not sue the expert adjudicator for negligence. The complaining party wanted their complaint dealt with there and then while the responding party wanted something like an order for directions, By the end of the day-long meeting something that could be described as a Consent Order for Directions was agreed; it was recorded in writing and subsequently duly issued by the expert adjudicator. As can be imagined, with the conflicting viewpoints of all the parties the meeting resembled more of a mediation than an expert adjudication. The next day the complaining party proposed negotiations so the expert adjudicator was put on hold and a compromise agreement eventually reached. No-one told the expert adjudicator that an agreement had been reached until he enquired and then the story for the recovery of his fees starts but we do not need to go into that as it did end somewhat satisfactorily eventually,
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the other party cannot be allowed to frustrate the dispute resolution process simply by not agreeing fees. Lawyers who draft such dispute resolution clauses in contracts seem to assume that there is an inexhaustible supply of expert adjudication fodder out there ready to be consumed by their parties' squabbling. An arbitrator has the comfort of the perhaps not entirely satisfactory provisions of the Arbitration Act to tax and settle his costs if he cannot agree his fees with the parties on appointment. Having a go at removing an arbitrator for so-called misconduct is about the only way to get an arbitration before a Court. Arbitrators know that any such applications will be defeated if they have been fair and it does not take much experience for an arbitrator to make sure that what he has done or decided can be seen to be fair as well. Those who accept appointments as experts may lack an arbitrator's training and unwittingly take some step that causes a party to shout 'unfair'. So far level pegging as between expert adjudication and arbitration. A M O R A L S A N D LESSONS difference is that few lawyers would think it worthwhile As a practised expert, a Registered Arbitrator, a CEDR bringing a writ against an arbitrator for negligence. But expert Accredited Mediator who is also Registered as a Mediator by adjudicators are wide open to suits for negligence, after all the BAE, we do have to ask why disputing parties go in for they are experts so must achieve the highest standard of all. A expert adjudication for any other reason than to spend money, warning to all potential expert adjudicators - make sure that As an arbitrator I would come round on my next available day your professional indemnity insurers know that you are and, providing there is a piece of paper with ~Cliff Dilloway is prepared to accept appointments. Secondly, persuade the appointed Arbitrator '~ written on it, no signatures required, the litigating party to also sue you for damages as your parties can have a binding decision from me for my train fare professional indemnity policy will cover you against damages and a one-time fee. There would hardly be any possibility of an claims but probably not to defend you against simple removal appeal. Minimal cost and almost certainly much the same from an appointment as an expert adjudicator (with costs decision as you would get anywhere else. It could be a against you). mediation if you like, the fees are the same but the parties We have been concerned here with the determination of would have to do the work of reaching an agreement, I would disputes by an expert adjudicator according to the parties' only be a facilitator. Expert adjudication clauses always seem to rights. A comparison has been made with arbitration because be drafted on a 'no appeal possible' basis. Well, I have shown we see little difference between the two procedures. What that a determined litigant can, it seems, wear down a less difference there is is mainly to .t-hedisadvantage of the tribunal, determined opponent in an expert adjudication. The case law and following the principle of countervailing good must have that is supposed to make arbitration unsatisfactory will not some benefit to the parties. prevent a case going to court but it will predict that unless Mediation and other forms of consensual dispute resolution there is something really wrong the litigant will get nowhere. If have not been mentioned as they will tend to resolve disputes the care that is lavished on expert adjudication clauses, was according to the parties' interests and that is another subject expended on arbitration clauses all the hazards that come from altogether. It can hardly be in anyone's interest to have a lawyers treating arbitrators like the judges which they are not dispute but if there is one Our advice is to get it resolved can be avoided. Think up your own ideas but draft an quickly. Too often we have seen a 'winner' exhausted by his arbitration clause that requires the arbitrator to produce a efforts and lose all in what was a vain attempt to secure his report setting out the rebuttable technical evidence for the rights. parties and you will get an involved arbitrator or you can go Cliff Dilloway after him or her for misconduct. While you are drafting your arbitration clause, cause the arbitrator to finally determine if Cliff Dilloway is a Registered Arbitrator, a CEDR Accredited the dispute is over technical or legal matters with the quite Mediator and a BAE Registered Mediator. His professional interesting power to order that the dispute be tried before a qualifications include Chartered Engineer, Management Accourt if he determines that matters of law dominate the countant and Fellow of the British Computer Society. He has disputes, been involved in dispute resolution for over 12 years and has Dispute B shows that if the drafting of an expert adjudication seen over 100 disputes played out in various ways. He firmly clause does not deal with the expert's remuneration then you believes that the quality of the determination of a dispute is may be asking an expert adjudicator to take a contract from down to the tribunal, not the amount of money spent in the just one party and then relying on the weak legal principle that preparation of the case.
175
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EXPERT ADJUDICATION [ .........
.... ....... .............
as 1
~e [
:ii
i~:z::::~: :. ii~
::: :~:~
i ~rals
1
Dispute A was most gentlemanly. There were no ladies involved although it later transpired that the dispute resolution clause in the contract had been drafted by a lady solicitor, Needless to say the parties were given a decision and presumably one was more satisfied than the other, Dispute B was rough. The parties had been to court twice previously. The first time the case had been adjourned on account of the expert determination clause in the contract. The second time on a construction summons when the Judge determined on his construction of the dispute resolution clause that all disputes had to be put before an expert. This Judgement was confirmed in the Court of Appeal. Needless to say all correspondence written by the appointed expert adjudicator was on legal advice but that did not prevent a writ to the High Court being taken out by one of the parties in an endeavour to overturn his appointment. Both the President of the appointing authority and the expert adjudicator were quickly out of the case but it took a week of argument for the Judge to decide that the expert adjudicator was validly appointed. Smooth though the progress of Dispute A was, there are still lessons to be learned from how the case went. Neither party fielded lawyers although it was clear that they were taking legal advice behind the scenes. One party submitted a filing drawer of documents and that probably doubled the cost of the adjudication. Like all other tribunals an expert adjudicator has to decide on the balance of probabilities according to the evidence put before him and so all the documents have to be looked at and studied. Perhaps the amount of documentation could have been reduced as two of the three issues referred to the expert adjudicator were settled before he came to consider the matter. As it was, all the documents were considered and an 'Adjudicator's Report to the Parties' was prepared to identify the controvertible evidence considered relevant. There was no substantial matter brought up later that was not in the report so while it was probably more expensive to have the adjudicator prepare the report it was very clear what the facts were on which the decision was going to be based and there was ample opportunity to draw attention to other facts, The parties in Dispute A made written submissions and there was a one day aural hearing. A decision was subsequently given. The whole process went well. There was some unfairness on the parties in that they were delayed by the court action in Dispute B but that is a hazard of any system of dispute resolution, The dispute resolution process in the contract in Dispute A contained potentially difficult problems but although some of these were raised the parties were agreed that what they
wanted was a decision from the expert adjudicator and they were not going to be deflected into a court action. Difficult problems that could have arisen were a"disputes over matters of law to go to legal adjudicators and technical disputes to go to expert adjudicators" clause. It is easy for a lawyer to draft such a clause but it contains possibilities for creating disputes. Who deals with technical matters of law? Who deals with mixed facts and law disputes? Is a Registered Arbitrator sufficient of a lawyer to handle disputes in matters of law? Such clauses can easily ensure that the first step in the dispute resolution process is to go before a judge in order to find out whether a lawyer or an expert is to determine the matter. Such a trial can easily (as it did in Dispute B) take longer than it ever would to resolve the dispute itself. Another potentially difficult problem in Dispute A was that the appointing authority for the expert adjudicator was a trade association. There is nothing that can be said about the conduct of any body but surely professional bodies are more independent than trade associations. A legal hook for an argument by a lawyer was provided in the specifications. All the deliverables were subject to approval by the customer. Fine for the customer but if all the prior agreements on what was to be done were subject to the customer's final agreement on delivery what was there in the contract more than an agreement to agree and that is no contract. As an aside we would say that this is a customer's trap equivalent to the UK Unfair Contract Terms trap that came to light in 1992 in Salvage Association v CAP Financial Services Ltd for suppliers. (See further p. 206 of this issue). We do not know what caused such conflict in Dispute B. There was ongoing business between the parties and they quite happily extended the contract between themselves while engaged in what can only be described as guerilla warfare over the conduct of the expert determination. We can only rationalize by presuming that one party expected an 'expert' to arbitrarily decide in their favour almost in the manner of a managerial decision and the other party feared that that is what the expert would do. The prior litigation in Dispute B had warned the expert adjudicator of the trouble ahead. Nothing was aural and everything he said in writing was after taking legal advice on the drafting. Even the terms of appointment were never agreed by one party. The acceptance of his appointment said that the determination would be conducted on the basis of natural justice and it was spelt out as what that was taken to be. The litigating party endeavoured to persuade the appointing authority that they could de-appoint the expert adjudicator and this they portended to do. As the trial judge confirmed that the appointment was valid it would seem that that appointing authority acted on unfounded legal advice. Once the Court had confirmed the expert adjudicator's appointment a meeting was called with the parties. Everyone came to the meeting with different expectations, doubtless because some fudge had been essential or the parties would never have turned up at all. The expert adjudicator sought agreement on his remuneration but obtained a rebuff from
174
...................................................................................................................... •:~:~:~::~:i:~,~,~ ~:~~ ~ ~ :
.~~i~~-:::~:~'~~~~v ~:~~.-~
Counsel who would never agree a contract under which he could not sue the expert adjudicator for negligence. The complaining party wanted their complaint dealt with there and then while the responding party wanted something like an order for directions, By the end of the day-long meeting something that could be described as a Consent Order for Directions was agreed; it was recorded in writing and subsequently duly issued by the expert adjudicator. As can be imagined, with the conflicting viewpoints of all the parties the meeting resembled more of a mediation than an expert adjudication. The next day the complaining party proposed negotiations so the expert adjudicator was put on hold and a compromise agreement eventually reached. No-one told the expert adjudicator that an agreement had been reached until he enquired and then the story for the recovery of his fees starts but we do not need to go into that as it did end somewhat satisfactorily eventually,
~ ~::~ ~) ~ ~:~
the other party cannot be allowed to frustrate the dispute resolution process simply by not agreeing fees. Lawyers who draft such dispute resolution clauses in contracts seem to assume that there is an inexhaustible supply of expert adjudication fodder out there ready to be consumed by their parties' squabbling. An arbitrator has the comfort of the perhaps not entirely satisfactory provisions of the Arbitration Act to tax and settle his costs if he cannot agree his fees with the parties on appointment. Having a go at removing an arbitrator for so-called misconduct is about the only way to get an arbitration before a Court. Arbitrators know that any such applications will be defeated if they have been fair and it does not take much experience for an arbitrator to make sure that what he has done or decided can be seen to be fair as well. Those who accept appointments as experts may lack an arbitrator's training and unwittingly take some step that causes a party to shout 'unfair'. So far level pegging as between expert adjudication and arbitration. A M O R A L S A N D LESSONS difference is that few lawyers would think it worthwhile As a practised expert, a Registered Arbitrator, a CEDR bringing a writ against an arbitrator for negligence. But expert Accredited Mediator who is also Registered as a Mediator by adjudicators are wide open to suits for negligence, after all the BAE, we do have to ask why disputing parties go in for they are experts so must achieve the highest standard of all. A expert adjudication for any other reason than to spend money, warning to all potential expert adjudicators - make sure that As an arbitrator I would come round on my next available day your professional indemnity insurers know that you are and, providing there is a piece of paper with ~Cliff Dilloway is prepared to accept appointments. Secondly, persuade the appointed Arbitrator '~ written on it, no signatures required, the litigating party to also sue you for damages as your parties can have a binding decision from me for my train fare professional indemnity policy will cover you against damages and a one-time fee. There would hardly be any possibility of an claims but probably not to defend you against simple removal appeal. Minimal cost and almost certainly much the same from an appointment as an expert adjudicator (with costs decision as you would get anywhere else. It could be a against you). mediation if you like, the fees are the same but the parties We have been concerned here with the determination of would have to do the work of reaching an agreement, I would disputes by an expert adjudicator according to the parties' only be a facilitator. Expert adjudication clauses always seem to rights. A comparison has been made with arbitration because be drafted on a 'no appeal possible' basis. Well, I have shown we see little difference between the two procedures. What that a determined litigant can, it seems, wear down a less difference there is is mainly to .t-hedisadvantage of the tribunal, determined opponent in an expert adjudication. The case law and following the principle of countervailing good must have that is supposed to make arbitration unsatisfactory will not some benefit to the parties. prevent a case going to court but it will predict that unless Mediation and other forms of consensual dispute resolution there is something really wrong the litigant will get nowhere. If have not been mentioned as they will tend to resolve disputes the care that is lavished on expert adjudication clauses, was according to the parties' interests and that is another subject expended on arbitration clauses all the hazards that come from altogether. It can hardly be in anyone's interest to have a lawyers treating arbitrators like the judges which they are not dispute but if there is one Our advice is to get it resolved can be avoided. Think up your own ideas but draft an quickly. Too often we have seen a 'winner' exhausted by his arbitration clause that requires the arbitrator to produce a efforts and lose all in what was a vain attempt to secure his report setting out the rebuttable technical evidence for the rights. parties and you will get an involved arbitrator or you can go Cliff Dilloway after him or her for misconduct. While you are drafting your arbitration clause, cause the arbitrator to finally determine if Cliff Dilloway is a Registered Arbitrator, a CEDR Accredited the dispute is over technical or legal matters with the quite Mediator and a BAE Registered Mediator. His professional interesting power to order that the dispute be tried before a qualifications include Chartered Engineer, Management Accourt if he determines that matters of law dominate the countant and Fellow of the British Computer Society. He has disputes, been involved in dispute resolution for over 12 years and has Dispute B shows that if the drafting of an expert adjudication seen over 100 disputes played out in various ways. He firmly clause does not deal with the expert's remuneration then you believes that the quality of the determination of a dispute is may be asking an expert adjudicator to take a contract from down to the tribunal, not the amount of money spent in the just one party and then relying on the weak legal principle that preparation of the case.
175