Adjudicative ADR (END)

Question 1

What does END stand for?

Answer 1

Expert (or Neutral) Determination

Question 2

What is END?

Answer 2

a process in which an expert (or neutral) is appointed to make a determination on the issues referred to him by the appointing parties.

END is a determinative process, rather than a facilitative process (mediation) or an advisory evaluative process (ENE)

Question 3

When is END used?

Answer 3

It is most commonly used in cases of a technical nature where the parties are likely to benefit from a determination by an appropriate expert such as an accountant, surveyor, or engineer.

Question 4

Is an expert always needed for END?

Answer 4

It is not always the case that an expert needs to be appointed to carry out a determination. In appropriate cases, the parties can agree that the determination is carried out by an independent third party.

Question 5

Where a panel of neutral third parties determine the issues, who will accompany them?

Answer 5

A lawyer

Question 6

When may a dispute be referred to END?

Answer 6

The parties may contractually bind themselves, in advance of a dispute arising, to use END to resolve a dispute.

Alternatively, after the dispute has arisen, the parties may select EN D as the most appropriate ADR process to resolve the dispute.

Question 7

What governs the relationship between the parties and he expert, the obligations of the expert, and the circumstances in which the decision will be final and binding?

Answer 7

These matters will be primarily governed by the terms of the contract by which the expert is appointed.

Question 8

Is END final and binding?

Answer 8

The parties usually agree that the determination is final and binding on them, typically this is recorded in the contract.

If this is not expressly stated in the clause, the court may imply such a term.

The parties may also agree that the determination is only binding on them for a temporary or interim period

Question 9

What do the terms ‘final’ and ‘binding’ mean?

Answer 9

‘Final’ means the decision cannot be reviewed or appealed

‘Binding’ means that the parties must comply with the determination.

Question 10

How does the role of an expert differ in END and in court proceedings?

Answer 10

In END, the expert is acting as the decision-maker, not a witness.

In court proceedings, an expert acts a witness, and the ultimate decision-maker will be the judge.

Question 11

Who picks the expert for END?

Answer 11

The parties

Question 12

Give three circumstances where END is generally useful.

Answer 12

cases of a highly technical nature

commercial disputes

disputes that arise during assessment of costs when the main proceedings have been concluded

Question 13

What will the parties typically have to send to the expert?

Answer 13

• written submissions setting out their case on each of the issues
• copies of all relevant documents (the parties should cooperate to produce an agreed bundle of documents if possible)

Question 14

What is the nature of the decision of END?

Answer 14

In END the parties will usually agree that the decision will be binding on them and, where this is so, the court will uphold the decision unless there are grounds for setting it aside.

The outcome of END is a contract which is drawn up by the expert.

The decision does not take the form of an award or an order, unlike arbitration.

Question 15

What may happen if a party does not comply with an expert determination clause in the contract?

Answer 15

END clauses, if clearly and unambiguously drafted, will be upheld by the courts, and such clauses will generally prevent the parties having recourse to the courts to resolve their dispute.

If one party refuses to comply with an expert determination clause in the contract, the other party may be entitled to damages for breach of contract.

Question 16

What may happen if a party issues court proceedings when there was a contractual agreement that END would be used in case of a dispute?

Answer 16

The court has the discretion to stay court proceedings issued by a party who failed to use the contractually agreed machinery in the contract to determine the dispute.

Question 17

If a party issues court proceedings when there was a contractual agreement to use END, where does the burden lie in proving which dispute resolution should be used?

Answer 17

The burden will be on the party seeking to litigate the dispute to show grounds why the claim should not be stayed.

Question 18

What may the court take into consideration when exercising its discretion as to whether a claim should be stayed to invoke contractually agreed END?

Answer 18

• the extent to which the parties have complied with the requirements in any pre-action protocol
• whether the dispute is suitable for determination by END
• the costs of END compared to the costs of litigation
• whether the dispute could be resolved more quickly by court proceedings than by requiring the parties to use END
• whether a stay would accord with the overriding objective

Question 19

Can the determination in END be challenged?

Answer 19

The court will give primary consideration to the terms of the contract in ascertaining whether the determination can be challenged.

If the parties agree that their dispute should be resolved by END and that the expert’s decision is to be conclusive and binding, then provided the expert has done exactly what he was instructed to do, the report, whether or not it contained reasons for the decision, can generally not be challenged by seeking to set it aside in court proceedings.

Question 20

How can a party challenge the decision in END?

Answer 20

A challenge to the decision will usually be made by issuing Part 8 proceedings.

Question 21

What can the court do if it sets aside the decision of the END?

Answer 21

It may make the determination itself or direct a new expert to be instructed to determine the matter.

Question 22

Other than challenging the decision in END, what can Part 8 proceedings be used for (in relation to END)?

Answer 22

Part 8 proceedings may be issued in advance of END to decide any disputes about the interpretation of the END clause, or to resolve disagreement about matters that should be referred to the expert pursuant to the clause.

Question 23

How is the decision of END enforced?

Answer 23

It is basically enforced as a contract. A failure by one side to honour the decision amounts to a breach of contract and proceedings can be issued in relation to the breach.

In those proceedings, the court can make an order giving effect to the decision of the expert, and if there are no valid grounds for challenging the decision, summary judgment is likely to be granted to enforce the decision.