Natural Justice – Ba humbug!
Expert determination has long been a method of resolving disputes between two parties. It can normally keep the cost down and go to a very direct and reasonable settlement imposed on the parties. The parties select the agreed expert or have an appointed expert and they live with the decision.
In Owen Pell Ltd .v. Bindi (London) Ltd there was a dispute. The Claimant was a Contractor who agreed in August 2003 that the Claimant would build an extension for the Defendant and perform mechanical and electrical works at theproperty in Holme Lacy. Workcommenced as usual and was completed in October 2004. A dispute arose - surprise, surprise, when the builders(Claimants) sought money which stated was outstanding on its finalaccount. The Defendant i.e, the homeowner alleged defects in the work – nothing new there!
Somehow both parties agreed that anindependent expert would determine their dispute. The expert determined the dispute and during the tenure ofthe determination had meetings. Following a direction of the Scotts Schedule, a site visit was to takeplace. The parties where at loggerheads and neither wanted to be there during the site visit in the presence ofthe other. So the expert reasonably met one party in the morning and the other party in the afternoon. The Contractor had his solicitor present. In the eveningthere was a meeting and later on in time the expert issued is decision on the11th September 2007 – approximately 1 year ago.
The decision had reasons and a detailedschedule and the Scotts Schedule attached to it and he awarded that the Claimant should be paid £53,487.65 plus VAT within the 7 days and also pay 80%of his fee. In the normal way ofthings the Defendant refused!!! Proceedings where brought by the Claimant to seek summary judgement. The defence was that the expert had failed in his duty to conduct himself in accordance with natural justice, hadan appearance of bias and had been guilty of error within the face of hisdecision. They stated that this was in breach of a perceived or implied term within the remit of the expert.
There was a lot of frittering about andarguments in court but the learning Judge decided the following;
1. There was no requirement for the rules of natural justice or any due process tobe followed in an expert determination, this would not affect its order orfor it being valid or binding between the parties.
2. There was no basis where implied terms could be placed into the agreement.
3. Also there was no evidence of actual bias or merit in the complaints regarding bias on the part of the expert.
They went on further to say that thequestion for the court to determine was whether the decision of the expert was within his jurisdiction i.e. had he decided all matters that had been referred to him, or not. If for some reason he had not dealt with all the matters it would give a nullity to the decision which would be unenforceable. They viewed the fact that the expert had determined the dispute referred to him. There are a few lessons to belearned from this. Expert determination is a tremendous idea. It is speedy and it should be cost effective.
It is exceedingly difficult to overturnbut the salient point in all of this is not about bias, it is about the factthat the expert must deal fully with all aspects referred to him because tofail to do so would bring the whole of his decision into the realm of not beingenforceable.
Choose your expert or determination withcare. Remember it’s a subtle formand sudden death!
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