Expert witness
Daniel Shaw MRICS FCIArb, Associate Director, Secretariat
IN formal construction-related dispute resolution such as adjudication, arbitration or litigation, the parties to the dispute are typically represented by third-party advisors throughout proceedings.
Lawyers are often engaged at an early stage and depending on the nature and complexity of the matter, experts are appointed to assist the tribunal with technical matters. In simple or low value disputes, a party might decide to represent itself using its in-house resources only.
What are ex parte proceedings?
The term ex parte relates to legal proceedings brought by one party in the absence of, and without representation of, or notification to, the other party. In practice it means that one party only, usually the claimant, participates in the proceedings whilst the other party, usually the defendant, abstains.
There are many reasons why these circumstances might occur, however, typically it is because of a lack of readiness, a fundamental misunderstanding of the dispute process, tactical reasons, or simply being unaware that proceedings have commenced.
The ex parte expert
In disputes governed by common law jurisdictions, each party will typically appoint their own expert. If the matter is multi-faceted, the parties might appoint experts from several disciplines, such as quantity surveying (quantum), planning (delay), accounting (financial damages) and engineering.
Depending on the form of dispute resolution, the party-appointed experts will exchange reports and thereafter meet to try and narrow any differences in opinion. The outcomes of the joint expert meetings are recorded in a joint schedule which sets out the areas of agreement and disagreement. The joint expert process of working together and exchanging views can be very beneficial in assisting the experts to provide the tribunal with balanced and objective opinion.
In an ex parte situation, the expert appointed by the participating party is without a counterpart. What might the lone expert expect in that situation and how, if at all, might it impact the expert’s ability to provide the tribunal with objective and unbiased opinion?
My ex parte experience
I was recently engaged in an ICC arbitration in which the defendant failed to participate. The dispute concerned the termination by the employer of an EPCI contract for onshore pipeline installation works at an existing gas processing facility in Nigeria. The contractor issued a substantial claim for works executed and other losses occasioned by the termination. The employer commenced arbitration proceedings against the contractor to recover amounts it said had been overpaid.
The term ex parte relates to legal proceedings brought by one party in the absence of, and without representation of, or notification to, the other party. In practice it means that one party only, usually the claimant, participates in the proceedings whilst the other party, usually the defendant, abstains.The employer wished to engage the services of a quantum expert to provide an independent opinion of the contractor’s termination claim, presented as an A4 lever arch file of poorly particularised and often illegible submission. The documents provided comprised the contractor’s claim and a progress report prepared by the employer at the time of termination. This is far from the typical expanse of documentation issued in international disputes.
After service of the quantum report by the employer, the contractor was particularly upset that it wasn’t afforded the opportunity to contribute to or inform the content of the report, prior to it being finalised. A misconception on the contractor’s behalf, however, no further information was forthcoming to address the deficiencies identified in the quantum report, and there was no confirmation from the contractor that it would be engaging a quantum expert.
The contractor’s efforts were largely spent attempting to impede the arbitration process with suspension requests, jurisdictional challenges, refusal to respond to requests or submissions, failure to attend meetings and finally failure to attend the evidential hearing. There were excuses for this behaviour of course, but none that the tribunal determined legitimate.
Lessons learnt
An ex parte situation like the one described above is exceptional; understandably, a party facing a monetary claim will want to defend itself robustly. This requires complete participation in the dispute process, even when the going gets tough. My recent ex parte experience was my first. The following provides some insight into what I learnt.
The role of the expert
An expert’s role is well established in case law. In the eminent case of National Justice Cia Naviera SA v Prudential Assurance Co. Ltd (The Ikarian Reefer) (1993), Sir Peter Cresswell said that an expert should not omit to consider material facts which could detract from a concluded opinion. In an ex parte situation without a counterpart, a partisan expert might be tempted to conclude opinions that are more favourable to their client’s position. In fact, the opposite is necessary.
The claim issued by the terminated contractor was in several instances missing supporting information essential to substantiating the claim. Issues of this nature are typically addressed by the legal teams or experts, however, without the ability to obtain further information from the contractor, concluding assessments with certainty was challenging.
This issue was overcome by providing alternative assessments based on a range of assumptions, many favourable to the contractor in the absence of information which might have been available. This provided the tribunal with a range of assessments based on their findings on certain issues.
Within the award the tribunal were complimentary of this approach and highlighted several examples of good practice, as follows:
- An arithmetical error in the contractor’s claim was corrected which increased the quantum of the termination amount and reduced the employer’s claim for overpayment.
- An allowance for transportation of pipework was included which was not separately claimed by the contractor. This was because its absence would have undervalued the work.
- An amount from the bill of quantities for weld testing was included which was not separately claimed by the contractor. This was because the records demonstrated that the parties agreed the testing work had been completed.
- A range of individual valuations were provided dependent on the conclusions reached by the tribunal which was considered an appropriate method in the circumstances of the dispute.
- Opinion was expressed on matters properly within the remit of a quantum expert. Whilst drawing issues to the tribunal’s attention, opinion was not expressed on matters which were primarily factual or legal.
The role of the tribunal
The tribunal’s role is to determine the dispute based on the evidence and facts that are submitted to it in a judicial, fair and impartial manner.
In the event of an evidentiary hearing, counsel appointed by the parties will test the expert evidence through examination in chief and cross examination. In the dispute above, the contractor nor any of its representatives attended the hearing. One might expect the contractor to have been disadvantaged by this, however, the tribunal, an eminent leading KC, adopted a hands-on and inquisitive role, effecting cross examination to test the quantum evidence.
Far from getting an easy ride, the cross examination from the tribunal was very challenging and thorough, designed not least to show on the transcript that the tribunal had not simply adopted the quantum report wholesale without fairly and carefully testing the evidence.
In the absence of a contractor appointed expert witness, the tribunal had focussed its efforts on scrutinising the single expert report available to it. This allowed for detailed questioning that a tribunal might otherwise avoid if both parties were present.
Daniel Shaw MRICS FCIArb, Associate Director, Secretariat