On 1 January 2008, Nicholas Gould accepted an offer to act as Chairman of the Standing Committee of the ICC Centre For Expertise for a three year period. The Centre which acts as the service centre for the International Chamber of Commerce (“ICC”) offers three distinct services, the proposal of experts, the appointment of experts and the administration of expertise proceedings. Here, Nicholas considers the role of the expert in international construction disputes. He focuses on the difference between party and tribunal appointments and the procedural rules that might apply. He also considers some practical considerations, such as issue identification, timetabling, joint meetings and expert reports, which are relevant to the appointment of an expert in any jurisdiction.
Appointment: parties or tribunal?
It has been said that the role of an expert in a construction dispute is to provide independent opinion evidence based upon the facts. It is also frequently said that this requirement is entirely fictional, because most experts are in reality appointed and paid by one party and so experts may view the dispute from that party’s perspective. An unbiased and careful review of the facts may well lead to a truly independent view, while at the other end of the scale, an expert may advocate a party’s case and even be criticized as a “hired gun”.
In many respects this criticism is levied against the Anglo-Saxon common-law jurisdictions, which for many years have allowed the parties a great deal of freedom to appoint their own experts. Many authors have considered this problem. For example, Andrew Bartlett described this as the “chief unsustainable myth is the complete independence of the expert”. The distinction in approaches between the civil and common law is in contrast to the international arena. Lawyers, experts and other consultants involved in domestic arbitration, will, in most circumstances, have developed their understanding from domestic litigation. The traditional approach of a particular country, governed by its domestic civil procedure rules, practices and guidelines will and is transposed into the international dispute resolution arena.
An alternative in international commercial arbitration is for the parties to agree that the tribunal can appoint the expert or experts. If they do so agree, the applicable procedural rules may provide the tribunal with the power to decide how expert evidence is to be dealt within the arbitration.
If the parties select and appoint their own expert then the parties must comply with the directions of the tribunal and see that the expert delivers the report on time, meets with the other party’s expert, and is available for the hearing. If a different approach is to be adopted by the tribunal then they will need the consent of the parties or an appropriate power in the procedural rules or law.
A common feature of the UNCITRAL Model Law, Model Rules, AAA/ICDR International Arbitration Rules and the LCIA Rules is that the tribunal can appoint the expert or experts. The tribunal has the power to identify the issues which a tribunal is to decide and to order the parties to provide relevant information. An expert’s report is to be in writing, and the parties are to be given an opportunity to examine and comment upon the report. The quality of treatment between the parties and the opportunity to consider and put their case is of course paramount in arbitration, as it is in litigation.
The Model Law and these Rules do not provide procedures for dealing with expert evidence, nor do they provide support services for proposing, appointing or even administering expert proceedings. The ICC has published rules, and provides a proposal, appointment and an administration service.
The ICC’s Rules for Expertise came to force on 1 January 2003 (“the Rules”). The Rules recognise that experts with particular knowledge in technical, legal, financial and other fields may well be used in a variety of situations. One of those could of course be to compliment an international commercial arbitration. The Rules are however complimentary to three services provided by the ICC, which are:
- The proposal of experts;
- The appointment of experts; and
- The administration of expertise proceedings.
The ICC is in a unique position as its network of 90 national committees around the world provides the ICC with direct links to government and business worldwide. The ICC therefore has access to a network of experts in a wide range of fields internationally. The ICC’s International Centre for Expertise (“the Centre”) is assisted by a Standing Committee. The Standing Committee comprises a chairman, two vice chairmen and eight further members for a three year renewable term. These individuals are drawn from around the world, thus adding to the international perspective of the ICC.
The Chartered Institute of Arbitrators’ Protocol for the Use of Party-appointed Expert Witnesses in International Arbitration was launched in October 2007. This protocol can be adopted by the parties and tribunal in its entirety or in part, or they may use it as a guideline when developing their own procedure. It is supplementary to the applicable law and the institutional or ad hoc rules that apply to the conduct of the arbitration. Article 4.5 sets out the requirements of an expert’s written opinion. The list initially includes many familiar items, but goes onto provide useful and more complete guidance than many of the current procedural rules. The written opinion must:
“(a) contain the full name ..., background, qualifications, training and experience...;
(b) state any past or present relationship with any of the Parties, the Arbitral Tribunal, counsel or other representatives of the Parties, other witnesses and any other person or entity involved in the Arbitration;
(c) contain a statement setting out all instructions the expert has received from the appointing Party and the basis of remuneration of the expert;
(d) only address the issue or issues in respect of which the Arbitral Tribunal has given permission for expert evidence to be adduced;
(e) state which facts, matters and documents, including any assumed facts or other assumptions, have been considered in reaching the opinion;
(f) state which facts, matters and documents, including any assumed facts or other assumptions, the opinion is based upon;
(g) state the opinion(s) and conclusion(s) that have been reached and a description of the method, evidence and information used in reaching the opinion(s) and conclusion(s);
(h) state which matters the expert has been unable to reach an opinion on;
(i) state which matters (if any) are outside the expert’s area of expertise;
(j) be as brief as is reasonably possible;
(k) not contain copious extracts from other documents;
(l) adequately reference all documents and sources relied upon;
(m) not annex more than is reasonably necessary to support the opinion;
(n) contain a declaration in the form set out in Article 8; and
(o) be signed by the expert and state its date and place.”
The emphasis is on restricting the expert to the issues for which expert evidence is required, but then requiring the expert to concisely state the facts, assumptions and opinions relating to those issues. The experts are required to hold a discussion in order to identify the issues upon which they are to provide evidence, identify any tests and analysis that may need to be conducted and try to reach an agreement on how those tests and analysis are to be carried out. Once the experts have concluded their discussions, then they are to set out the issues, tests, analysis and identify any areas of agreement and disagreement, together with reasons for the disagreement, and send this to the parties and the tribunal. If tests and analysis are required, then they should be carried out in the agreed manner. If agreement cannot be reached, then each expert can carry out those tests that he or she considers appropriate, but this must be done in the presence of the other expert.
A written opinion is then produced, which is exchanged simultaneously. The experts can review each other’s opinion, and if necessary write supplementary opinions which are again exchanged simultaneously. If the experts provided a written opinion, they are obliged to give an oral testimony at the hearing. This may only be dispensed with if both parties agree and the tribunal confirms that agreement. If an expert does not give a testimony at the hearing, the tribunal is to disregard the expert evidence unless “in exceptional circumstances” the tribunal decides that the opinion may be considered.
The expert’s mandate
An expert needs to be clear about his or her “mission” or “instructions” or “mandate”. The appointment of an expert requires that the expert is given clear instructions and ideally a timetable. The instructions may be provided by the party that appoints the expert, or joint instructions may be agreed by the party or the tribunal may set out the instructions. In any event, the tribunal should have the power to determine a definitive list of issues, even if the tribunal needs to devise a process whereby an initial set of issues are determined by the tribunal in consultation with the parties, and then the experts are given the opportunity to further develop the list of issues which the tribunal can then determine after further consultation with the parties.
Conclusion: practical considerations
The practical considerations for the parties and in particular the arbitral tribunal in any international commercial arbitration involving expert evidence are:
- Identification of the issues;
- Procedures for developing the particular questions of the experts, carrying out any test, visiting the site, and analysing test results;
- Joint meetings of experts (who should attend);
- The need for a written joint expert report of areas of agree and disagreement (together with brief reasons for disagreement);
- Report only on areas of disagreement and by issue; and
- The potential for witness conferencing at hearing.
If the tribunal is to manage the arbitration in an efficient manner, and write an award that addresses each of the issues that are properly in dispute between the parties then, a focused schedule of issues must be produced. Requiring the experts to meet and discuss each issue can save time and money. The experts can discuss all of the issues and work out where they agree and disagree. The need to identify the reasons for disagreement will focus their minds, and will provide the basis for a focused expert report and cross-examination. An expert report from each expert need only deal then with the areas of disagreement on an issue by issue basis. The reports can be compared by the tribunal. From this an agenda for the hearing can be established.