RENOVATING IN SOUTH AFRICA

In our previous post, we explored resolving building contract disputes through mediation. This month, we'll focus on another effective method: expert determination. Although not explicitly mentioned in the Joint Building Contracts Committee (JBCC) agreements, expert determination offers many advantages and is often highly effective in resolving conflicts.

Expert determination is a conflict resolution process where an independent third party, acting as an expert rather than a judge or arbitrator, is appointed to decide a dispute. This expert is chosen for their technical skills, knowledge, and experience in the building industry—often an architect, project manager, or quantity surveyor. Their appointment is clearly stated in the contract between the parties, which often provides for a nominated appointment. The expert's responsibility is to conduct a proper and reasonable investigation into the dispute and make a non-negligent decision based on their understanding of building contracts and professional opinion. Unlike arbitration, the expert is not usually bound by the evidence presented by the disputing parties.

An independent expert should be able to:

- Base their decision on their own knowledge and investigation, uncovering all relevant information about the dispute, including applicable legal principles.

- Settle their own contractual terms with the parties, such as remuneration, extent of inspection, and assumptions.

- Execute the entire determination independently.

Yes, the independent expert’s decision, known as a determination, is usually final and binding. There is no right of appeal unless the expert has answered the wrong question, there is evidence of fraud or bias, or there are clearly stated contractual provisions allowing the parties to challenge the decision. However, without an express contractual term to this effect, there is some legal uncertainty about whether a determination is final and binding. Unlike arbitration, the independent expert does not have the power to determine who pays the costs unless the contract states otherwise.

Cost-Effective: Expert determination is significantly cheaper than litigation. Most disputes arise over technical rather than legal matters, making the courts ill-equipped to handle them.

Technical Expertise: Expert determination is well-suited to disputes involving technical issues, such as valuation disagreements or the quality of work and materials.

By opting for expert determination, parties in a building contract dispute can benefit from a resolution process that is both efficient and cost-effective, leveraging the expertise of a knowledgeable professional to achieve a fair outcome.