CIVIL JUDICIAL EXPERTS IN LARGE CONSTRUCTION PROJECTS LITIGATION
Abstract:
The key problem of the traditional litigation in state courts for large construction projects is that the parties and the judge are fully lack of special knowledge in the field of construction. The existing system of appointing a court expert to solve technical issues is not effective, because the judge is unable to understand the arguments of the court experts as well, as the objections of the parties. The article describes exciting possibilities of using neutral construction experts in state court litigation of different countries that can improve the quality of final court decision.
Key words: Litigation, Construction disputes, Judicial Expert
Introduction
The main problem is that during the contract performance the Contractor very often (to be more exact – Always) discover that design documentation, site geological survey documentation etc. are incorrect. In this case, many additional works have to be done. Moreover, a contract price should be increased accordingly. The key problem to be solved in such situation – is there a real reason for increasing the scope of works and contract price? This is mostly important in the contract with the fixed price where the Contractor must not only proof that there is an additional scope of works, but show that he has a right for additional payment. The answer can be find only after a special analysis of all the project documentation, contract, special codes, governing law and site inspection.
Dispute resolution methods in construction contracts
There are various types of dispute resolution methods in construction.
Negotiation. It is the most effective method but until the parties are able to negotiate and doesn’t need any mediator, arbitrator or jury.
I am not speaking about Mediation because from my point of view mediation is the same procedure as negotiation but it has formal law regulation.
ADR methods such as architect/initial decision maker, neutral expert fact finding, expert determination, etc. without formal dispute resolution procedure.
ADR methods such as Adjudication, Dispute Resolution/Review Board, with formal dispute resolution procedure and formal award.
Arbitration. Well-known dispute resolution method and I will not describe it here.
Litigation — the process of taking a case to a court of law so that a judgement can be made. It is generally understood (peremptory norm) that all persons have an ability to bring their claims before a court. I will speak here about civil law courts.
My favorite dispute resolution method in construction disputes when the parties are not able to solve their problems without third party’s decision is Dispute resolution board (DRB). Especially when the disputes relate to special technical problems – construction defects for example. Mostly because the panel of dispute resolvers is comprised of specialists and experts who are actively involved in the construction industry. Dispute resolvers of DRB have a “special knowledge” in construction and can professionally understand the arguments of the parties and expert reports. Moreover, if the rules this allows, they can make their own “expert investigation/examination”.
In recent years, the construction industry has taken steps to avoid litigation and control disputes on projects through a variety of methods, which can be used at almost any stage of a construction project. The primary goals are to resolve the conflict professionally and in a less confrontational manner.
However, the fact is that it is the owner who dictate the form of dispute resolution.
As a matter of fact today a lot of owners (customers) in construction contracts insist of resolving disputes by litigation in the court of law. For example in Russia, it is forbidden to resolve disputes in any other institution than court of law when in the project are used funds from state budget.
Litigation in court of law and construction experts
So, let’s go to court of law and see how the judge or jury will resolve construction dispute. For example the dispute is concerns the scope of fulfilled/not fulfilled construction works and construction defects. Of course, I have no doubt that the judge will need expert assistance.
Classic scheme in civil law court in most European countries looks like this:
Figure 1
Each litigant has the right to order pre-trial expert report. As the parties of the case are already in litigation it is hard to imagine that results of expert examinations made by experts of each party will be the same. They will be opposite and I don’t know another situation.
It is interesting why. If these 2 experts are qualified, have the same documentation, and all other conditions are the same why the results of expert examination are always opposite? It is a big and very old question and we will not discuss it in this paper. But it is a reality, otherwise the parties will stop litigate.
In this case there is no other way for the court to establish a scope and quality of construction works as an appointment of court expert. From my practice there are 3 possible results of court expertise which we will wee in the court-appointed expert’s report:
Court expert will confirm the position of Litigant 1.
Court expert will confirm the position of Litigant 2.
Court expert will have his/her own position differs from the position of litigants.
And what will happens next? The party which is not satisfied with the court expert report will raise objections to court expert report. But how the judge will understand them. I can show certain example of such situation. Please look at the figures below.
If the case is simple (construction defects in the apartment fro example) and expert evidence is clear (see Figures 2-5) there is no problem for the judge to understand what expert report is about.
However, we speak about large construction projects and they have their special aspects. On the 6st figure there is a general view of the construction site (industrial plant) and on the figure 7 there is a an assessment of structural reliability of the structures of this plant.
Figure 6
Figure 6
Please, look at these figures and try to imagine that you are a judge in this case. Do you understand what expert report is about? Can you decide if the assessment is wright or wrong? Moreover – non-satisfied with court expert report litigant says “This model is wrong! In the table 1 the Dead load must be 450 – see national standard 1234!”. And the court expert responds: “It is you are wrong! In this kind of models the dead load must be not more than 400 – see European standard 4321!”.
Did you imagine this situation? What you will do? Many specialists in law say that it is the dispute and the judge must take the position of an expert, which is more convincing. What does it mean, “convincing” in this case? Of course – more convincing orator, but not the expert with “correct results”.
According to the law in many civil law countries court-appointed expert’s evidence has the same power as other evidences. In fact the court expert plays the role of a judge in technical questions. But these technical questions are the topics of the dispute and in fact court expert becomes a judge not being appointed to solve the dispute!
Best practice of using construction experts in Litigation in different countries
How to avoid the problems of non-competence of judge/jury in the field of construction? I think today it is not possible to almost avoid them but is possible to use all the methods which the law of certain country allows.
Below I will give a list of interesting methods of using experts that are used in different countries.
1. Russia. The most interesting in Russian law today concerning experts is the provision that facts confirmed by a notary in the notarial act do not require any proof in legal trial. According to the law notary can appoint an expert to prepare expert report. This means that pre-trial expert report will be issued with notary conformation and it will have “more power” than “ordinary” pre-trial expert report (see Figure 8).
Figure 8
2. Czech Republic.
2.1. According to the civil procedural codes expert report prepared by judicial expert (registered in a national public directory) on the request of litigant has the same power as a report of a court appointed expert.
Figure 9
2.2. If there is doubt about the accuracy of the court-appointed expert’s report, or if the expert evidence is unclear or incomplete the court will review the expert report/evidence by another expert.
Figure 10
3. Spain. From the year 2000, the opinions that the litigants wish to put forward and which they consider necessary or appropriate for the explanation of the case, are prepared by experts appointed by them and must be provided with the initial claim or the response to the claim. That means that a civil party are now obliged to provide all the expert opinion to the Court, and if they do not present these means of proof in the appropriate time in the proceedings, the judge will be entitled to reject a later proposal. This is the effect of article 336 LEC 2000, which implies that a lawyer, once he takes a case, has the responsibility and the obligation to decide what expert speciality is required, and identify the name of the expert who will write that expert opinion.
The advantage of this system is that the "private" judicial expert will defend his report at an oral hearing, where he will most likely have to challenge and confront the different or opposite opinion of one or more experts, appointed by the other parties, and he will have to explain his work and his conclusions in front of the Court, where he will be subjected to an intense "cross examination" which will be recorded by video.
But the civil judge cannot make a decision on what expert opinion will be necessary, so that if during the preliminary oral session (where the parties present their means of evidence), he considers that the evidence put forward by the parties could turn out to be insufficient to clarify the facts at issue, he can only inform the parties of this, stating the facts at issue which, in the court’s opinion, could be affected by insufficient evidence. Upon making such a statement, the court may also point out the evidence which it may deem appropriate, taking into consideration the probative elements whose existence is reflected in the documents.
Figure 11
4. UK. According to the current legislation a party to a construction contract has the right to refer a dispute arising under the contract for adjudication. The contract shall provide that the decision of the adjudicator is binding until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement. The parties may agree to accept the decision of the adjudicator as finally determining the dispute. If the parties after adjudication’s decision will then refer a dispute to the court it will be a Technology and Construction Court which is specialized on construction disputes.
Figure 12
Expert Remuneration
One of the most important problem in preparing expert report in large construction projects is the possibility of advance and stage payments for experts. It is important because minimum cost of preparing expert report in such cases is about 100 000 euro and minimum time is about 6-9 months and very often it is not possible to prepare expert report of high quality standards without advance and/or stage payments. When the party appoints an expert there are no problems for advance and stage payments because it depends only on the agreement of the litigant and expert. However, in case of court appointing expert the conditions of payment are regulated by the law.
You can easily see from the table 1 in what countries it is possible for court expert to receive advance/stage payment.
Conclusion
From my point of view
1. The first task for litigants in litigation is to provide a court with many expert evidences, which judge/jury, can hardly ignore. For this purposes it is very important to use all the possibilities that gives to litigants the law of certain countries.
2. It is important to improve the law and expert procedures that will allow solving disputes by professionals in the field of construction.
3. It is also important to provide legal opportunities for court appointed experts to receive advanced and stage payments such as party appointed experts can.
4. Alternative dispute resolution is a scope of most effective methods for using experts and dispute resolution in construction. It is important to put into construction law the legal possibilities for using ADR in construction dispute resolution.
References
[1] Marilyn Klinger. Confronting Construction Conflicts [online]. Electrical Construction and Maintenance, 1 March 2009. Available from http://ecmweb.com/ops-amp-maintenance/confronting-construction-conflicts.
[2] SERGEY ZAKHAROV. The use of Experts in Russia. An introduction to practice, procedures and problems [online], 18 May 2017. Available from https://www.asnexpert.com/single-post/2017/05/18/The-use-of-Experts-in-Russia-An-introduction-to-practice-procedures-and-problems.
[3] SERGEY ZAKHAROV. The use of Neutral Experts as a vital ADR tool for effective dispute resolution in construction [online], 14 October 2017. Available from https://www.asnexpert.com/single-post/2017/10/14/THE-USE-OF-NEUTRAL-EXPERTS-AS-A-VITAL-ADR-TOOL-FOR-EFFECTIVE-DISPUTE-RESOLUTION-IN-CONSTRUCTION.
[4] Rafael Orellana de Castro. Civil expertise in Spain [online], EEEI - Institut Européen de l'Expertise et de l'Expert, Newsletter N31. October 2017. Available from http://www.experts-institute.eu/Civil-expertise-in-Spain.html?utm_medium=email&utm_campaign=EEEI%20-%20Letter%20n31%20English&utm_content=EEEI%20-%20Letter%20n31%20English+CID_b24dd3456a30051190a10275b65ce425&utm_source=Campagnes%20Emails&utm_term=Read%20more.
[5] EUROEXPERT. Remuneration of Experts in Europe, A Comparative Study of Remuneration Systems in Europe, 2016 Update [online], 2016. Available from http://www.euroexpert.org/home.html.
