EXPERT DETERMINATION

On request, Expert Adjudication will nominate an expert to conduct an expert determination. Expert determination has an important role to play in the resolution of disputes. It is much faster, more flexible and less costly than arbitration or litigation.

Adjudication under security of payment legislation is a form of expert determination but it has limitations which expert determination does not have. The advantage of expert determination is that the parties themselves decide what disputes will be submitted for expert determination, how the process will be conducted and the cost.

Issues which can be determined in an expert determination but, with the exception mentioned below, cannot be determined in adjudication include:

  • claims by the person for whom work was carried out (the respondent in adjudication);
  • extension of time, delay and disruption claims;
  • claims for loss of bargain damages on termination of a contract;
  • other claims for damages for breach of contract;
  • claims for damages in tort;
  • claims for damages under statute (for example, for misleading or deceptive conduct);
  • whether practical completion has been reached and, if so, when;
  • whether a bank guarantee must be released;
  • claims in restitution based upon unjust enrichment;
  • claims under contracts excluded from the security of payment legislation (for example involving residential work on premises occupied or to be occupied by the respondent);
  • the meaning of a provision in a contract; and
  • a dispute over the jurisdiction of an adjudicator or the validity of an adjudication determination.

There are some construction contracts that expressly provide that delay costs or damages can be included in the calculation of the progress payment. These are rare. See pp 162-163 of Adjudication in the Building Industry, 3rd ed, 2010, Davenport, P. Federation Press.

Issues that can be submitted to expert determination are not limited to claims and disputes. An expert determination may avoid a dispute. For example, parties may agree that the expert will determination whether a site condition is a latent condition or certain work is a variation or what is a reasonable rate or price. If there is a dispute about the validity of an adjudicator’s determination, the parties may agree that rather than having the issue decided by the Supreme Court (which is a costly process), they will have it decided in expert determination.

An expert determination can be for an amount on account or a final entitlement. If the parties agree, an expert determination can be non-binding. Then it is usually called an ‘independent appraisal’.

Some construction contracts have a provision that disputes will be decided by expert determination and provide for the procedure. Here is an expert determination clause that parties could include in their contracts. Alternatively, when a dispute arises the parties may agree to submit that particular dispute to expert determination. This is an ad hoc agreement. Here is a suggested form for an ad hoc agreement for expert determination.

Expert Adjudication is able to assist parties who are interested in expert determination. Expert Adjudication has developed a standard set of Rules for Expert Determination that parties can adopt.