This article was featured in our 2023 Construction Arbitration Report, which is part of a series of industry-focused arbitration reports edited by Jus Connect and Jus Mundi.
This issue explores the construction industry and presents a goldmine of information based on data available on Jus Mundi and Jus Connect as of May 2023. Discover updated insights into construction arbitration and exclusive statistics & rankings, as well as in-depth global and regional perspectives on construction projects, disputes, & arbitration from leading lawyers, arbitrators, experts, arbitral institutions, and in-house counsel.
THE AUTHOR:
Dr. Franco Mastrandrea, Partner at HKA
As someone who has for many years been involved with construction disputes, both as expert witness and resolver, it is instructive to reflect on the many changes that have occurred over that period, mostly improvements.
Of particular note has been the increasing acceptance in the international arena of what is expected of the expert witness, the importance of their impartiality and independence, and of their duties to the tribunal recognised in guidelines such as the CIArb Protocol for the Use of Party Appointed Expert Witnesses in International Arbitration (2007), the IBA Rules on the Taking of Evidence in International Arbitration (2020), and the rules of some of the professional bodies to which the expert may be affiliated, such as the RICS Practice Statement on Surveyors acting as Expert Witnesses currently in its 4th Edition, amended February 2023.
There is still some way to go to achieve a level playing field for all involved, particularly in the international arena, with standards/improvements needed for peer reviews, witness conferencing, joint witness statements (See, for example, The Academy of Experts Guidance on Joint Statements (2021)), and, perhaps most starkly, witness coaching.
What is clear is that experts, particularly when appointed early, can usefully advise whether there is a viable technical case (e.g., on an engineering issue), and what it is worth (in respect of time or money) and thus help to avoid, reduce the extent of, or settle disputes.
An area of increasing focus is the use of a range of experts from the same organisation. In an early example drawn from my own experience, the owner appointed three separate discipline experts, all from my then employer, to address:
(a) technical engineering matters;
(b) delay; and
(c) quantum,
which were in issue between the owner and the contractor (the claimant in the case). Each discipline expert produced a report within their area of expertise.
In addition, I was appointed to the role of co-ordinating expert/expert team lead. My instructions, following early discussions with the owner and its legal team, were to manage the tasks of discipline experts.
I saw that task as a project management role – facilitating and integrating the overall expert process by creating and maintaining a consistent framework of expert tasks, procuring the sub-division and execution by each of the discipline experts of their individual tasks, and collaborating with the discipline experts in the selection of appropriate methodologies for each assignment. Importantly, this is a classic project management function. It does not/should not interfere with/undermine the independence and responsibilities of the discipline experts.
At the more granular level, I saw my particular tasks as extending to the co-ordination of the location, understanding, assimilation, analysis, and evaluation by each discipline expert of:
- the parties’ various claims;
- the project data available from the parties’ disclosure (or which ought in the opinion of the owner’s experts including myself to exist as part of that disclosure);
- data available as part of the work product of the contractor-appointed experts;
- common areas of relevance and/or investigation by all of the discipline experts; and/or
- discrete areas of relevance and/or investigation for each of the discipline experts.
In addition, I saw it as part of my function to review progress and seek to manage any shortcomings in, or difficulties which may have arisen during, the discharge of work by each of the discipline experts.
Further, I saw it as part of my project management function to undertake a review – at an informed co-ordinating, as opposed to the discipline, expert level – for appropriateness, consistency, and by way of an objective sense check of the individual expert’s approach and conclusions.
This required in particular an understanding of the claims advanced by the contractor, and of the reports produced by the individual technical, delay and quantum discipline experts appointed by the contractor.
It became clear from a consideration of the parties’ contentions, my early investigations and those of the three discipline experts appointed by the owner that:
(a) the claims advanced by the contractor;
(b) the basis upon which the contractor had chosen to advance those claims;
(c) the basis upon which the contractor appeared to intend to pursue those claims; and
(d) the range and depth of investigation that appeared to have been undertaken by the contractor and each of its appointed experts,
were extremely constrained. This was so albeit, paradoxically, that many of the claims in fact displayed characteristics of global, total-time, or total-cost claims.
These early investigations pointed to the likely relevance of particular areas of project performance which would justify more detailed analysis.
I considered, in consultation with the three discipline experts, that a balanced and more comprehensive appraisal of such areas of more focused investigation was likely to be achieved if each of the three experts was able to resort to a common analysis of as much of the project data as appeared reasonable and realistic. This resulted, for example, in the preparation of common chronologies of a number of work areas. This carried over, by way of extension, into other areas at the generic level of analysis, such as was to be seen by reference to a number of issues identified in the contractor’s own documents (such as internal correspondence, correspondence with sub-contractors and internal progress reports) identified as contractor or contractor supply chain related issues that appeared to have delayed and/or disrupted the delivery of the project, including inter alia issues with interface management, lack of experience, poor staffing, equivalent issues with procurement; etc.
At this level of investigation and analysis the discrepancies to be seen between the reconstruction of such contemporaneous data and the allegations set out in the contractor’s pleaded case was instructive, and sometimes stark.
Significantly, neither the contractor nor its discipline experts offered any similar or equivalent reconstructions or analyses for verification/discussion.
Another common theme relevant to the discipline experts was the existence and application of particular contract terms. I considered it appropriate to encourage each of the discipline experts to consider the contract terms pertinent to their particular discipline. Given the matters in issue, it seemed to me clear, indeed inevitable, that part of the relevant discipline expert’s task would be to express opinions not only on the nature and extent of such obligations but also an outline of how a responsible hypothetical contractor would or should undertake and discharge its manifold obligations on a project similar in nature and extent to that in issue.
Thus, in relation to:
(a) technical matters – the owner appointed engineering expert was asked to consider, e.g., the contractor’s design obligations including in particular the implications, from a technical perspective, of the nature, configuration and extent of such obligations.
(b) delay matters – the owner appointed delay expert was asked to consider, e.g., the express scheduling obligations placed upon the contractor, the monitoring of progress to the critical path, the contractual mechanism for changes to the Scheduled Dates, the calculation by the contractor of the effect of a change on the Scheduled Dates (or the latest date that a decision on a change could have been made without affecting the Scheduled Dates) and the inclusion of the cumulative effect on the progress of the Work of all changes up to that time, the prescribed forms for a Change Inquiry, Change Proposals and Change Orders requiring an estimate of the effect of a change on the Scheduled Dates with appropriate back-up. Significantly, the contractor appointed delay expert by contrast very rarely set out or commented upon the nature and extent of the contractor’s scheduling obligations and their appropriate discharge.
(c) quantum matters – the owner appointed quantum expert noted, e.g., in respect of Change Order claims that they would regard it as appropriate, having regard to the particular contract terms in this case to enquire whether from a quantum perspective: the claimed item might appropriately be the subject of a valid Change Order; the cost claimed had in fact been incurred, by reason of the complaints alleged, and whether any cost/sum claimed or incurred, based upon the available information, appeared to be reasonable. The contractor appointed expert had, by contrast, not considered such matters.
The approach provides an integrated set of expert discipline reports set against a common factual matrix. I have been appointed to this co-ordinating role on a number of other projects since, whether in a formal dispute process or as part of an early appraisal for the purposes of intended negotiation of an incipient dispute, a role which those commissioning it have found not only to add value to the traditional expert roles, but in some cases pivotal.
ABOUT THE AUTHOR:
Dr. Franco Mastrandea is a Partner at HKA. He has over 40 years of experience. He has over that time acted as expert (discipline and coordinating), expert determiner, mediator, adjudicator, and arbitrator on numerous international construction disputes.
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