Whether an expert’s determination can be set aside for any error of law

http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/  EWCA/Civ/2014/994.html&query=premier+and+telecom& method=boolean

The parties had referred a dispute to expert determination and one of the parties sought to  challenge the expert’s decision. One of the issues considered by the Court of Appeal in this case  was whether the judge had been correct to suggest that an error by the expert on any point of law  arising in the course of implementing his instructions might justify setting aside the  determination. The judge  had treated this as an open question on the basis of certain comments  made by Lord Neuberger MR in Barclays Bank v Nylon Capital (see Weekly Update 27/11). He had  believed that there is a “powerful argument” for saying that (subject to the contract terms) a  valuation by an expert (even where the valuation is agreed to be “final and binding”) can be  challenged in court if it can be shown to have been arrived at on the basis of “a mistake of law”  (emphasis added).

The Court of Appeal said that these comments had been obiter only and that neither of the other  Court of Appeal judges had expressed agreement with them. It was concluded that “it is possible  that the parties might by their agreement define the terms of the expert’s mandate in such a way  that any error of law on his part rendered his decision invalid, but in many cases to do so would  risk undermining the whole purpose of the reference. Ultimately, however….it all comes down to the construction of the contract under which  the expert was appointed to act. Only by construing the contract can one identify the matters that  were referred for his decision,  the meaning and effect of any special instructions and the extent  to which his decisions on questions of law or mixed fact and law were intended to bind the  parties”.

On the facts of the case, the Court of Appeal held that the expert had not departed from his mandate.