ACLN - Issue #60 44

I~~~~~~~~~~~~~ ~ispute ~esolution

Rules For Expert Determination

AA de Fina 1

Expert Determination or Appraisal is a process "Determination" means a decision, finding or answer made
which is gaining in popularity within Australia. Some or given by the Expert to the matter referred or part of it.
organisations or entities have provided in their commercial
contracts for expert determination as a means of resolving "days" means calendar days and excludes weekends and
disputes or differences. holidays.
Together with arbitration, mini-trial, mediation and
"document(s)" means writings, photographs, films,
conciliation, expert appraisal is another tool in the box of
drawings, information or the like and in any form.
available processes for the resolution of disputes. To date
there has been promulgated in Australia only one set of "Expert" means the person, firm, partnership, organisation
rules intended for general application. These are the Rules or corporation appointed to act as the expert pursuant to
for Expert Determination/Appraisal of the Institute of these Rules.
Arbitrators & Mediators Australia ("lAMA" - previously
The Institute of Arbitrators Australia). "(Institution/organisation)" means (organisation or
Whilst the lAMA Rules have yet to be tested their institution).
character and terms closely resemble the provisions of an
arbitration and to that extent might ultimately be seen as "Law" means the law ofAustralia and as relevant the laws
being an arbitration with all of the statutory consequences of its States or Territories.
that flow. One of the rationales for the advancing of expert
"matter referred" means the dispute, difference or question
determination has been the alleged cost and time of arbitral
submitted to the Expert for Determination.
proceedings.
The Model Rules proposed in this article represent "Party" means any person being an Applicant or
a fundamental philosophical and practical divergence from Respondent in proceedings governed by the Rules.
the rules of lAMA.
The Model Rules are presently under consideration "person" means a natural person, firm, organisation,
for adoption by The Institution of Engineers Australia. partnership or a corporation.

MODEL RULES FOR EXPERT DETERMINATION "(President/Chairman)" means the (President/Chairman)

(Institution / Organisation) for the time being of (institution or organisation) or any
person duly authorised by the (President/Chairman) to act
Effective as at (date)
in respect of these Rules.
ART 1 Preamble
These Rules provide for the application of expertise to "Proceedings" means all of the steps or requirements of
decide or make findings in respect of disputes, differences the Process leading to the Determination.
between or requests from Parties to a wide range of
relationships. "Process" means all aspects of referring and deciding a
matter by expert Determination.
The Rules are not limited only to transactions of a
commercial nature but may be applied wherever reliance "Respondent" means the Party answering the initiation of
on expertise is perceived as being appropriate. the process.
ART 2 Definitions
"Rules" means these rules and any change, revision or
In these Rules:
amendment in effect prior to the date of initiation of the
"Applicant" means the Party initiating the process. Process.

"Appointing Authority" means the person, organisation or "submissions" means any documentary or oral presentation
institution agreed by the Parties as having the power of or material put before the Expert pursuant to the Rules
appointment of the Expert in the absence of agreement by and includes supporting documents.
the Parties.
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Words imputing male gender shall be read as including (d) the names of those persons or entities upon
the female gender and vice versa. whom agreement has not been reached;
(e) the names and addresses of all Parties;
Unless the context of their use does not allow words (g) payment in the sum as set forth in the
imputing the singular shall be read as including the plural schedule attached as a non-refundable
and vice versa. appointment fee.
ART 3 Scope of Rules (2) Notwithstanding the provisions of sub-paragraph (1)
The proceedings and the process shall be governed by these above the Parties may, by mutual agreement in
Rules and where the Rules are silent any rules which the writing, extend the time for agreement between them
Parties agree or failing agreement those determined by upon the Expert.
the Expert pursuant to Art 31. (3) The (President/Chairman) shall, within 7 days or
such longer period as may be reasonably necessary,
ART 4 Notification
advise the Parties of the person appointed as
(a) All notifications shall be made to the last known
Expert.
address of a Party.
(b) Notification shall be by facsimile transmission or ART 8 Notification of Appointment
mail or any other means that provides a record of Where the Parties have agreed upon appointment of the
transmission. Expert or where appointment is made under the provisions
(c) A notification shall be deemed to have been made of Art 7 respectively the Parties or the (organisation/
on the day it was received by a Party or would have institution) as relevant shall as soon as possible notify the
been received if made in accordance with (b) Expert so appointed.
above.
Such notification shall include:
ART 5 Effect of Agreement (i) the full names and addresses of the Parties;
By adopting or submitting to these Rules the Parties jointly (ii) a copy of the agreement between the Parties making
and severally agree and covenant without further the appointment of the Expert; or
endorsement to be bound by and implement all of the terms a copy of the appointment made by the appointing
and conditions of the Rules. authority;
(iii) a copy of these Rules;
ART 6 Initiating Procedures
(iv) a copy of the notice given pursuant to Art 6(i).
A Party seeking to initiate an Expert Determination under
these Rules shall give written notice to the other Party. ART 9 Acknowledgment of Appointment
Such notice shall: Within 7 days of receipt of notification of appointment
(i) identify the dispute, difference, or question to be the Expert shall acknowledge in writing such notification
referred for Determination; and accept or reject appointment.
(ii) propose one or more persons, firms, partnerships,
or corporations as suitable for appointment as ART 10 Nature of Appointment
Expert; The appointment of the Expert, whether by agreement of
(iii) request that within 7 days the other Party agree to the Parties or by the (organisation/institution), shall be
an appointee drawn from the proposals given in presumed to be a joint appointment by all of the Parties.
accordance with (ii) above or to propose other
prospective appointees. ART 11 Independence and impartiality of Expert
The Expert shall be independent of the Parties and act
ART 7 Appointment in Default of Agreement impartially. If the Expert becomes or is made aware of
(1) Where the Parties have failed to agree upon an any circumstance that effects, or may effect, such
Expert within 14 days of the written notice of referral independence and impartiality, such circumstance shall be
to the Expert Determination process, by written disclosed to the Parties and the Expert shall, if requested
request to the (organisation/institution) by one or by any Party, withdraw.
more of the Parties the (President/Chairman)
shall appoint an Expert. The written request shall ART12 Replacement of Expert
include: (a) Where the Expert rejects appointment, subsequently
(a) a copy of written notice of referral to the withdraws, or cannot or does not conclude the
process given pursuant to Art 6(i); process, whether by death, illness or any other cause,
unless the Parties otherwise agree, the Expert shall
(b) copy of the agreement of the Parties
be replaced in the manner prescribed in Art 6 or Art
empowering the (President/Chairman) to
7 hereof.
appoint; (b) Where an Expert withdraws or cannot or does not
(c) a statement of any particular qualifications conclude the process the Expert shall not be liable
or requirements agreed or perceived by the to repay any fees, costs or expenses previously
Parties or one or more of them as being drawn by the Expert pursuant to Art 26, or the
required of the Expert; Parties' costs or expenses.
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ART 13 Conduct of Proceedings ART 19 Conference

(a) Other than as provided in these Rules, in conducting The Expert may convene and conduct a conference for
the proceedings the Expert is not bound to: the purposes of the process. Failure by a properly notified
(i) apply the Law; Party to attend a conference will not of itself be grounds
(ii) apply principles of procedural fairness. for the conference not proceeding.

(b) The Expert may: ART 20 Party Submissions

(i) direct or receive submissions, documents, or (1) Unless otherwise agreed by the Parties in writing
information from a Party independent of the or directed otherwise by the Expert:
other Party and whether oral or otherwise; (a) Within 14 days of acknowledgment by the
(ii) make enquiries or seek opinions of the Parties Expert to the Parties of the lodgement of the
or third Parties; full amount of initial security directed
(iii) conduct or direct investigations, tests, pursuant to Art 26 or advice to the Parties
experiments, calculations or other procedures from the Expert that no initial security is
of his own initiative; required:
(iv) if requested by one or more of the Parties or (i) the Applicant shall submit to the
of his own volition make an interim Expert and the other Party a statement
Determination on a discrete or separable in writing setting out details of the
issue of the matter referred. matter referred and the alleged or
agreed facts relied upon; or
(c) In arriving at a Determination the Expert may place (ii) the Applicant and the Respondent
such weight upon any or all material, information, shall submit to the Expert a statement
opinions or submissions before him, including his setting out details of the matter
own investigations, experiments, tests, or referred and the Parties' respective
calculations (including no weight) as the Expert positions, the contended facts and the
thinks fit. agreed facts relied upon if any.
(d) Unless otherwise agreed by the Parties in writing,
the Expert shall make available to the other Party (b) Within 14 days of the submission made by
all submissions, documents, or information received the Applicant pursuant to (a)(i) above the
from a Party pursuant to Art 20 and allow a Respondent shall submit to the Applicant and
reasonable time for comment or rebuttal. the Expert a statement in writing responding
(e) A replacement Expert may adopt-or rely upon any to the Applicant's submission and the alleged
Determination made by an Expert that is replaced. facts relied upon.
(c) Within 7 days of the response of the
ART 14 Service of Notices Respondent as made pursuant to (b) above the
All notices or communications shall be made to the last Applicant may provide a further submission
notified address of a Party. Such notices or in rebuttal.
communications shall be made by any means of delivery
that provides a record of sending. (2) The Parties shall make further submissions in the
form and as may be directed by the Expert.
ART 15 Periods of Time
Periods of time provided in these Rules shall start to run ART 21 Refusal or Failure to Participate
on the day following the date a notification or Where a Party has agreed to submit to the process but
communication is deemed to have been made. refuses or fails to participate, the Expert may proceed to
Determination.
ART 16 Agreed Facts
With their submissions to the Expert the Parties shall, ART 22 Determination of Legal Rights and
where relevant, include a statement of agreed facts (if any). Obligations
ART 17 Competing Allegations of Fact Other than as necessary by the obvious nature or express
Where for Determination of the matter referred the Expert terms of the matter referred, the Expert shall not make
is required or perceives the need to rely or have regard to any Determination purporting to establish the legal rights,
facts which are in contention as between the Parties, the duties and obligations of the Parties.
Expert may require the Parties or one or other of them to
ART 23 Application of Law
provide in support of the alleged facts such evidence and
Where· the Expert is required by the obvious nature or
in such form as the Expert may direct.
express terms of the matter or referred to determine the
duties, rights or obligations of one or other or all of the
ART 18 Representation
Parties, such Determination shall be consistent with the
A Party may be represented for any purpose in relation to
the process. Law.
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ART 24 Interest ART31 General Provisions

Where a Determination is in whole or in part a money (a) In all aspects not expressly covered by these Rules
sum or sums payable as between the Parties, the Expert the Expert shall act in the spirit of the Rules to
may include in such Determination an amount or rate of maintain integrity and outcome of the Process.
interest as may be the subject of prior agreement between (b) Where a dispute arises between the Parties as to any
the Parties or, absent such agreement, such amount or rate aspect of these Rules the Expert may incorporate
as the Expert deems appropriate. such dispute as part of the matter referred.
(c) The Expert shall act with due expedition in the
ART 25 Form of Determination conduct of the proceedings and the making of the
Unless otherwise agreed in writing by the Parties a Determination having regard to the nature and extent
Determination by the Expert shall be in writing and give of the matter referred.
reasons.
ART 32 Exclusion of Liability
ART 26 Costs of the Process Save where there is a finding of fraud or corruption against
The Expert may direct the Parties to lodge monies in the Expert or the (organisation/institution) in respect of or
escrow with the (organisation/institution) as security for touching upon the Process no liability whatsoever shall
the fees and expenses of the Expert due or incurred by the lie as between one or other or all of the Parties and the
Expert in the carrying out of this Process. The Expert Expert or the (organisation/institution).
may draw upon such security from time to time to the
extent of such fees and expenses properly due at the time ART 33 Waiver
of drawing without further recourse to or approval of the Where a Party becomes aware of circumstances where any
Parties. Each Party will share equally the Expert's costs of these Rules have been breached in the conduct of the
and expenses of the Process. proceedings and does not immediately raise this with the
Expert and the other Party, that Party shall be deemed to
ART 27 Costs of the Parties have waived its right otherwise to object to or take further
Each Party shall bear its own costs and expenses of the part in the proceedings or object to or avoid any
Process. Determination made.
ART28 Confidentiality
ART 34 Indemnity
(a) Other than as required by Law, or by direction of an
The Parties jointly and severally indemnify and shall
authority having competent jurisdiction, or by
forever keep indemnified the (organisation/institution) and
release of the Parties, the Expert shall keep
the Expert against all and any claims, costs, expenses or
confidential both the existence of referral to the
damages for any matter arising out of or touching upon
Process and the Determination.
the Process.
(b) The provisions of (a) above shall not act to prevent
the Expert making at any time limited and relevant
ART 35 Enforcement
disclosures where issues of conflict or potential
Without limitation any Party may take action for
conflict arise.
enforcement of a Determination made under these Rules
ART 29 Power to Correct Determination by application to a court having competent jurisdiction
Where the Determination contains: under the Law.
(i) a material miscalculation of figures or a material
mistake in the description of any person matter or Footnote
thing; 1. Past President, The Institute ofArbitrators Australia.
(ii) a clerical mistake; Past President, Australian Centre for International
(iii) an error arising from accidental slip or omission, Commercial Arbitration.
Chairman, The Institution of Engineers Australia
the Expert may correct any Determination within 30 days Standing Committee on Contracts and Dispute
of issue whether or not such matter requiring correction is Resolution.
identified by the Parties or one or other of them, or by the Member, Cours Europeene d' Arbitrage.
Expert.
Editorial Note:
ART 30 Contractual Obligations The NSW Government Construction Authorities' contracts
Where implementation of the Process arises by virtue of provide for Expert Determination and contain Rules for
direct or indirect incorporation of these Rules in a contract the Conduct of Expert Determinations. The Australian
between the Parties and where absent a Determination of Commercial Disputes Centre Ltd also has Expert
the matters referred, all or part of the respective duties Determination Rules and Agreements. 0
and obligations of the Parties under the contract can be
carried out, the Parties shall perform or continue to perform
such duties and obligations.