Expert determination

What is expert determination?

Technical or other non-legal experts often play an important role in solving commercial disputes.

In state courts and arbitration proceedings, experts are frequently appointed by judges and arbitrators to assist them in making decisions to do with technical and other non-legal issues requiring expert knowledge. During arbitration proceedings, parties often seek the support of party-appointed experts to assist them in arguing their case.

The term "expert determination" also refers to another type of legal expert;

If parties disagree solely or mostly on technical points, as opposed to a legal points, the parties may decide to jointly appoint an expert to render a binding opinion regarding the queries. The opinion rendered may be limited to the establishment of one or several disputed facts or may in itself define and clarify the parties' rights and obligations.

Expert determination is likely to ensure the technical accuracy and appropriateness of the solution.
Expert determination is likely to reinforce party-autonomy as the parties can freely appoint their expert and define the experts mission and tasks.
Expert determination is likely to ensure confidentiality as the opinion will very rarely be made publicly available.

Under German law, expert determination proceedings are governed by Sections 315 - 319 of the German Civil Code ("BGB"), either directly or by analogy.

However, as these sections are neither mandatory nor conclusive, the content and structure of each expert determination remains in the hands of the parties.

The parties are free to select the expert, define their tasks and obligations, and set-up the procedural steps the expert shall follow in the formation of their opinion. The parties may also define whether and to what extent the expert's opinion is binding. The default rule provided by Section 319 BGB is that the opinion is binding unless it is evidently unequal. This decision is to be determined by the state court or arbitral tribunal.