Why Expert Determination Is Called the Secret Alternative to Arbitration?
Expert determination is one way of dispute resolution in which the parties take a different approach to dispute resolution, so you need a subject-matter expert, rather than a judge, mediator, or arbitrator with legal training, to resolve the dispute.
Although it may not be one of the most popular forms of alternative dispute resolution, it is gradually turning out to be an alternative to litigation or arbitration. Expert determination has its root in the English common law of valuation or appraisement and can only happen when both parties agree to it. Here are the key features and advantages of expert determination.
Expert Determination is Consensual
An expert determination undergoes under the WIPO Expert Determination Rules with the agreement of both parties. In the specific case of future disputes/differences arising under a contract, both parties include an expert determination clause in the relevant contract.
The two parties submit an agreement and resolve the two existing disputes/differences. In comparison to mediation, a party cannot unilaterally withdraw from expert determination.
Experts with Relevant Expertise
Under the WIPO Rules, the opposing parties can choose an expert together. If the parties are unable to choose an expert for some reason, they should choose a different procedure for appointing the expert; in such a situation, the Center chooses the expert after consulting with the respective parties.
The Center chooses experts who have specialized knowledge linked to intellectual property and issues in several changes in technology and business areas. This allows the Center to appoint appropriate experts to resolve specific issues.
Privacy Matters
When it comes to expert determination, the matter is resolved without anyone being aware of its existence. That is one of the best parts of expert determination as the parties like to keep the matter under wraps, unlike litigation which offers them just that.
Since it is subject to specifically defined exceptions, the WIPO Rules are there to protect the confidentiality of the expert determination, any disclosures made during that procedure; the resulting determination that comes off it.
Final and Binding
The dispute is usually resolved virtually without any opportunity to appeal. The appointed expert’s determination offers a binding contract, and the courts very rarely impact the expert’s decision. However, in some situations, such as fraud and manifest error the court may have to intervene.
In actuality, the determination of an expert is binding and as such, it has a contractual effect between the parties. Alternatively, as per the party agreement, the determination only comes through, thanks to the recommendation of the parties.
Impartiality
The expert often allows each party to make representations to the expert, and to cater to the representations made by either of the sides.
Maintains Business Relationships
After a long and hard-fought court case, the parties are in such a situation where they may become loggerheads with each other; in some cases may not want to do business together, ever again. An expert determination may help in such a situation; offering a technical process that instead of destroying a relationship helps maintain the same.
Speedy Resolution
Litigation resolutions are often long, drawn-out, expensive, and very public dispute resolution processes. Using expert determination, parties can agree on an express timescale in which an expert must decide the terms of the contract. From a commercial standpoint, this provides certainty and prevents companies from stalling any ventures on hold while either of the parties awaits a court decision.
Informal Nature
Since expert determination is more informal. There is very little required by way of disclosure and no examination of witnesses or pleadings is required as would be the case in an arbitration or court proceedings.
Autonomous Nature
Both of the parties, decide over the remit and extent of the expert’s instructions in the case of contractual provision. This makes the parties more flexible and the entire procedure more confidential, helping them retain their reputation and keep the nitty-gritty of the economic disputes private.
Neutral and Flexible
Apart from their selection of an expert with the appropriate qualifications, the parties also get to choose important elements such as the language of the expert determination or the meeting place.
On one hand, expert determination is a lucrative way of dispute resolution, bringing to the table all the commercial benefits including speed, finality, and certainty. However, the only cons may be the grounds for challenge are restrictive and often involve judicial tests which are difficult to overcome. Parties should carefully consider these before choosing the same.
