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What is the difference between an arbitration and an expert determination?

General Principle

In Re Dawdy and Hartcup1)Lord Mustill said:

It has been held that if a man is, on account of his skill in such matters, appointed to make a valuation, in such manner that in making it he may, in accordance with the appointment, decide solely by the use of his eyes, his knowledge and his skill, he is not acting judicially: he is using the skill of a valuer, not of a judge. In the same way, if two persons are appointed for a similar purpose, they are not arbitrators but only valuers. They have to determine the matter by using solely their own eyes and knowledge and skill.

In Re Carus v. Wilson and Greene (1886) 18 QBD 7 Lord Mustill said:

If it appears, from the terms of the agreement by which a matter is submitted to a person's decision, that the intention of the parties was that he should hold an enquiry in the nature of a judicial enquiry, and hear the respective cases of the parties, and decide upon evidence laid before him, then the case is one of arbitration. The intention in such cases is that there shall be a judicial enquiry worked out in a judicial manner. On the other hand there are cases in which a person is appointed to ascertain some matter for the purpose of preventing differences from arising, not of settling them when they have arisen, and where the case is not one of arbitration but of mere valuation. There may be cases of an intermediate kind where, though a person is appointed to settle disputes that have arisen, still it is not intended that he shall be bound to hear evidence and arguments.

Cited with approval in

Under the new Commercial Arbitration Act Framework

The powers of an arbitration are extensive and found in legislation.

The powers of an expert are limited to those solely to which he or her are granted pursuant to the written instrument between the parties and those further powers the parties may grant the expert. This is often down by for instance agreeing to a set of expert determination rules such as IAMA Expert Determination Rules

Should the matters resolved by expert determination be limited?


In The Heart Research Institute Ltd v Psiron Ltd 3) , Einstein J said

[24] Clearly the New South Wales Courts have responded positively to the benefits which Expert Determination can entail.

In Public Authorities Superannuation Board v Southern International Developments Corp Pty Ltd, NSWSC, 19 October 1987 (unreported), Smart J stated that, in relation to Expert Determination:

'There are many reasons why they may take such a course. They may prefer to have a relatively informal process which they may think is likely to be cheaper and quicker and the decision of an independent consultant who is likely to be familiar with the problems…It is not for the Court to re-write their contract.’ 4)

[25] His Honour was prepared to extend the matters which may be considered by Expert Determination to issues of liability and quantum.

The arguments that the role of an Expert under such agreements should be limited to those ‘usually dealt with by experts, for example, questions of value, questions of the work to be done prior to practical completion, quality of work and, presumably, extensions of time’ 5) were rejected.

[26] A positive approach to Expert Determination can also be implied from the decisions in Government Insurance Office of NSW v Atkinson-Leighton Joint Venture6) and IBM Australia Ltd v National Distribution Services Ltd7), both cases dealing with the construction of arbitration clauses.

Each of these cases indicates an acknowledgement of the commercial utility of alternate dispute resolution processes and a willingness on the part of courts to construe dispute resolution clauses in an expansive manner.

In Government Insurance the High Court held that, even though an arbitration clause contained no express reference to the awarding of interest, the scope of the power was sufficient to imply a power in the arbitrator to award interest in accordance with the relevant Supreme Court Act.”

It is their contract; and it should be enforced

Cited with approval in Biosciences Research Centre Pty Ltd v Plenary Research Pty Ltd 8)

See also Glenvill Projects Pty Ltd & Ors v North North Melbourne Pty Ltd & Ors 9).

1) (1885) 15 QBD 426 at 430
2) [1998] VSC 188
3) [2002] NSWSC 646.
4) at 10
5) at 7
6) (1979) 146 CLR 206
7) (1991) 22 NSWLR 466
8) [2012] VSC 249
9) [2013] VSC 717

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