Stephen Furst QC's judgment in ZVI Construction Co LLC v University of Notre Dame (USA) in England is a recent TCC case that highlights important issues arising from expert determination clauses.
Expert determination We all know that many UK clients (and foreign-based clients with greater experience of civil law systems) try to find what they think will be cheaper and more efficient ways of dispute resolution than English court proceedings. The two conventional candidates are arbitration and expert determination. Although expert determination is of long-standing, there is little jurisprudence to guide parties as to what they should draft in an expert determination clause and how they should conduct the dispute when it arises. This relative paucity of guidance is driven by confidentiality and the fact that there is little scope for court oversight of the process, with no appeal from the expert's decision. The apparent advantages of expert determination are clear enough: it is confidential, (possibly) less adversarial, swift, inexpensive and final. If a client has a dispute, refers it to expert determination and obtains a favourable judgment in a few weeks or months at little cost, then that would be judged to have been a good piece of drafting. But the losing party will normally judge the last three of these characteristics a disaster if it has not been granted the time to prepare, is unable to obtain disclosure of documents that might have won the case, the expert was of poor quality or was perceived to be unfair, or has delivered a flawed but unappealable decision. The agreements and the works TJAC Waterloo LLC agreed to sell a property in London to the University of Notre Dame and, in 2010, the parties entered into a development agreement. Completion was conditional on building works being carried out and TJAC engaged ZVI Construction Co LLC to carry out the works under a JCT Design and Build Contract, Revision 2 2009. In 2011, ZVI entered into a duty of care agreement with the University under which ZVI agreed a duty to the University to comply with the terms of the JCT contract and to carry out the works in a good and workmanlike manner. Crucially (as it turned out) ZVI was also made a party to the development agreement. The work was carried out and the sale was completed in late 2011. In 2014, the University alleged against both TJAC and ZVI that the building works were defective, that both were liable under the development agreement and that it intended to use the development agreement's expert determination provision to have the dispute determined. The dispute resolution provisions were (at least on the face of the judgment) an uncoordinated mess. The duty of care agreement provided for the jurisdiction of the English court. The judgment does not record the dispute provisions of the JCT contract. The development agreement had a bifurcated provision in which: • Any dispute between the parties "as to the meaning or construction of this agreement shall be referred to an independent solicitor or barrister” who shall act as arbitrator in accordance with the Arbitration Act 1996.