While most people would be familiar with mediation as a form of Alternative Dispute Resolution (ADR), increasingly we are seeing Expert Determination as a preferred solution.
In an Expert Determination, the parties jointly appoint a single independent expert and agree that the determination of the expert is legally binding. Expert determinations are best suited to matters where a technical issue needs resolving, such as a valuation or interpretation of accounting standards.
The process is often confidential, allowing the parties to keep the matter out of the public eye and free from legal precedent. This could be the driving force behind why we are experiencing an increase in matters referred to us for determination. However, as all ADR methods can be confidential, this may not be the only reason.
Another reason is flexibility – the parties jointly agree on important elements such as the appropriate expert and their location. The experience is also less formal, generally faster, and a more cost effective process than litigation. In matters of dispute, this flexibility and control goes a long way to making the parties feel more comfortable with the matters at hand.
The element of control does not extend to the decisions of the independent determiner. A good expert will dictate fair and clear communication processes, allowing each party the opportunity to make submissions and respond. The expert will be independent in their assessment based on these submissions and, based on their knowledge and experience and will provide well-reasoned arguments for their decision, just as a legal judgment would.
While the use of independent experts is well used in disputes, we think it is the speed and cost efficiency of Expert Determination that is driving its popularity as a tool for resolution. Done well, the parties can efficiently settle their issues and move on with the business of doing business.