Expert determination is being widely
used in real estate and construction industry. It has always played a greater
role in valuation a dispute, so we can say that concept of expert determination
is originated from valuation disputes.
A final and binding decision is one
of main and perceived advantages of expert determination but an expert while
exercising in this regard if does not use the level of skill and care that is
required in reaching that decision, may be sued for negligence.
Interesting fact is that a party may
set aside the expert determination.
In Shafi
v Rutherford [2014] EWCA Civ 1186, an expert was appointed for determination
of a dispute regarding amount to be paid for a share in dental practice. The
expert identified that some leases were not treated while accounts of dental
practice were maintained. According to expert correction of those identified
accounting errors was not to consider and outside the scope of his instructions,
hence valued the shares on those incorrect accounts.
It was found by court of appeal that
treatment of those identified leases on the accounts was within scope of expert
determination and the letter of instruction to expert as well. The court of
appeal therefore decided to appoint new expert for a new determination.
This is a rare
example of the courts interfering with expert determination because, as noted
above, an expert determination cannot generally be appealed or challenged. When
entering into a contract, it is common for parties to agree on provision which
provides for binding expert determination. This ensures that the effect of the
decision of the expert is certain and is often cited as a benefit of using
expert determination to resolve disputes.
This is a very rare example of
courts, to set aside and vary the expert determination. Usually expert
determination cannot be appealed or challenged. Parties commonly agree into the
contracts containing provisions that ‘such determination will be binding’. This
clearly shows that effect of using an expert for determination always proves as
beneficial to resolve many disputes.
However, there are certain other
grounds which can, in limited circumstances, lead a court to set aside or vary
an expert determination:
Still there are number of certain
ground that lead a court to outcast or change an expert determination as under.
- Material departure from instructions as described above in Shafi v Rutherford
- Failure to state reasons
- Fraud or collusion
- The certificate not being certain
- Partiality
The content of this blog is intended
to provide a general guide to the subject matter. Specialist advice should be
sought about your specific circumstances.
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