The Use Of Experts In The Resolution Of Disputes In The Construction Industry

Michael Lee, Norton Rose, November 1997

Historical Overview

Expert evidence has increasingly become part of the civil litigation process in England and Wales, particularly in construction disputes. Originally, expert witnesses could be called in the same way as witnesses of fact, the only difference being that an expert, once he was proved to be such, could give evidence on matters of opinion. Restrictions on the calling of expert witness were introduced to prevent trial by ambush. The main restrictions which apply to the calling of expert witnesses in civil litigation in England and Wales today are: -

• expert witnesses can only be called with leave of the Court.
• written statements of the expert witnesses must be exchange before trial.

Seven Pillars of Wisdom

Expert witnesses, in general, remain part of the adversarial process in England and Wales, i.e. they are called by the parties themselves and not by the Court. The duties of expert witnesses, and those of the parties calling them, were set out in a judgment of the Commercial Court in 1993, which has received approval from the higher courts. In "the Ikarian Reefer" [1993] 2 Lloyd's Rep 68, Mr. Justice Cresswell set out the following guiding principles for expert evidence.

• Expert evidence presented to the Court should be, and be seen to be, the independent product of the expert, uninfluenced as to form or content by the exigencies of litigation.
• An expert witness should provide independent assistance to the Court by way of objective unbiased opinion in relation to matters within his expertise. An expert witness should never assume the role of an advocate.
• An expert witness should state the facts and assumptions upon which his opinion is based. He should not omit to consider material facts which could detract from his concluded opinion.
• An expert witness should make it clear when a particular question or issue falls outside his expertise.
• If an expert's opinion is not properly researched because he considers that insufficient data is available, then this must be stated with an indication that the opinion is no more than a provisional one. In cases where an expert witness who has prepared a report could not assert that the report contained the truth, the whole truth and nothing but the truth, without some qualification, that qualification should be stated in the report.
• If, after exchange of reports, an expert witness changes his view on a material matter, having read the other side's expert's report, or for any other reason, such change of view should be communicated (through legal representatives) to the other side without delay, and, when appropriate, to the Court.
• Where expert evidence refers to photographs, plans, calculations, analyses, measurements, survey reports or other similar documents, these must be provided to the opposite party at the same time as the exchange of reports.

Particular practice in construction litigation and arbitration

• Most construction disputes in England and Wales, are dealt with either by arbitration, or through a particular part of the High Court known as the Official Referee's Court. It is now quite usual in such arbitrations or litigation for the arbitral tribunal, or the Official Referee, to direct that a without prejudice meeting be held between the experts prior to the hearing. The purpose of such meeting is to try and agree as many of the expert issues as possible before the hearing, leaving only those issues which remain in dispute to be determined by the tribunal or Court. Normally experts of similar disciplines will meet together but sometimes it is appropriate to have meetings of more that one discipline, e.g. architects, structural engineers and quantity surveyors.
• Official Referee's Solicitors Association Expert Witness Protocol. This contains detailed guidelines for dealing with expert witnesses and their reports which have been drawn up by an association of construction litigation lawyers.

Proposals for Reform

Lord Woolf, the Master of the Rolls, in his report "Access to Justice" proposes that a single expert be called in cases where expert evidence is required. He sees four advantages:-

• greater prospect of impartiality.
• saving of time and money.
• increase prospects of settlement.
• a level playing field.

The single expert will be a joint appointment of the parties, not Court appointed. The parties may still appoint an expert's "adviser" to assist the joint expert but he will not be an expert witness as at present.

Other reforms proposed in the field of expert evidence include:-

• the removal of legal privilege from the instructions given to experts.
• standardisation of reports.

Important reforms in the field of arbitration have recently been introduced. The Arbitration Act, 1996 gives the parties complete freedom to chose their own procedures and give support to arbitral tribunals to frame procedures suitable to the case. This includes the appointment of experts by the tribunal.

Expert Determination

This is sometimes used where an expert opinion is needed on a technical matter. It is usually provided for in the agreement itself, although it is possible to submit a dispute when it arises to expert determination on ad hoc basic. Long term contracts often provide for expert determination of issues which may arise during the currency of the contract.

The process is an inquisitorial process which is binding. Its advantages are that it is often cheaper and less formal than litigation or arbitration. It may obviate the need for parties to instruct their own experts and it can also assist the parties to get on with their commercial relationship. An expert determination cannot generally be the subject of an appeal.

Adjudication

Important new provisions for the determination of disputes under construction contracts are contained in the Housing Grants Construction and Regeneration Act 1996, the relevant provisions of which should come into force during 1998. This Act outlines an adjudication procedure which should be included in a construction contract (which is defined to include an agreement to provide professional services). Each construction contract must provide that:

• An adjudication notice may be given at any time. A timetable must be provided for the appointment of the adjudicator within seven days of service of the notice.
• The adjudicator must reach his decision within 28 days of the referral subject to a 14 day extension with the consent of the party by whom the dispute was referred.
• The procedure must impose a duty on the adjudicator to act impartially.
• The procedure must enable the adjudicator to take the initiative in ascertaining the facts and the law.

If a construction contract fails to adopt the provisions outlined in the Act, the adjudication provisions in the Scheme for Construction Contracts will automatically apply.

The essential points of adjudication under the Act are:

• "Temporary Finality" The adjudicator's decision is final until "finally determined" by arbitration, legal proceedings or by agreement. Consequently the parties may rely upon an adjudicator's decision which is subsequently overturned by an arbitrator or a Court.
• Enforcement The construction contract should contain provisions to ensure that the adjudicator's decision is enforced. For example, the ORSA adjudication rules state that "Every decision of the Adjudicator shall be implemented without delay. The Parties shall be entitled to such reliefs and remedies as are set out in the decision, and shall be entitled to summary enforcement thereof, regardless of whether such decision is or is to be the subject of any challenge or review. No party shall be entitled to raise any right of set-off, counterclaim or abatement in connection with any enforcement procedures".
• Adjudication only binding on the parties. The contract administrator is not a party to the construction contract between the employer and the contractor and hence he is not bound by the adjudicator's decision (unless his appointment so provides). There is therefore a risk of conflicting decisions between, for example, the supervising architect and the adjudicator.
• Arbitration or litigation not excluded. Nothing prevents either party resorting to the courts or arbitration.

This note is intended to provide general information about some recent and anticipated developments which may be of interest. It is not intended to be comprehensive nor to provide any specific legal advice and should not be acted or relied upon as doing so. Professional advice appropriate to the specific situation should always be obtained.