Truth is rarely pure, and never simple


In this, the second of two articles on the subject, I focus on: –

  • Independent experts
  • The erosion of independence
  • Dispute avoidance
  • Design and Build Contracts
  • An unusual use of experts

Independent Experts

As an expert, one is duty bound to provide honest opinion and advice to one’s own client and to an appointed Tribunal or a Judge. If an expert has doubts or concerns, he or she must identify them. At the risk of stating the obvious, arbitrations and litigations are expensive and time consuming, and in some extreme instances, as noted above, the very survival of a construction company might be at stake.

Many of the disputes that I have been involved in settle before a hearing or trial, but in order for it to settle, the parties sometimes need independent advice and guidance from their experts including the money at stake and at risk. Ultimately that is what the dispute is about.

Whether retained by a contractor or an employer, providing an independent opinion of value (subject to legal and other factual principles) permits a client to make decisions and whether to proffer or accept an offer to settle.

To inflate or deflate the likely worth of a claim may encourage a client to continue with the dispute instead of settling. During my career as an expert, I have: –

Advised a client to discontinue a court case because the contractor in question was clearly not responsible for the delay to the project;

Provided a preliminary report to my contractor client who was not happy with his previous expert. My report assessed that the previous expert had exaggerated the contractor’s claim by some US$27m. I established a “likely range of entitlement”. The dispute settled after the lawyer that instructed me took the rather unusual step of sending a copy of my preliminary report to the Respondent’s legal team.

Most of the lawyers that I have worked with studiously avoid applying pressure on myself as the appointed expert. That is not to say that they may have comments that the expert should always consider. If I accept and agree with any suggested comments, I will change a draft of my report, but in my own words. If I don’t’ agree, I won’t.

The Erosion of Independence

As an independent expert, I have witnessed what I perceive to be an erosion of independence of some experts. A conversation with other experts, confirmed my opinion.

I have worked with many experts and with some it is perfectly straightforward, and a large measure of agreement can be reached, leaving some genuine differences to be either settled by the parties, or in arbitration or court.

However, I have also worked with experts who sometimes adopt distorted and, in some instances, extreme positions by: –

  • Recommending to the lawyers instructing them not to provide to me access to information;
  • Preparing support calculations that were uncheckable and/or with information concealed;
  • Advising their client not to provide my access to key documents;
  • Advising their clients to deny my access to the contractor’s computerised costing system. (After belatedly) gaining access, it became obvious that the “expert’s” assessed value was US$ 8m too high).
  • After agreeing a joint statement with me, an expert tried to renege on it because “counsel didn’t like it”.
  • In fairness, those examples identified above constituted extreme but not unique behaviour on the part of experts. They slow the entire process down; drive costs up; and are clearly contrary to the oaths that all experts take.

There is however a potential downside to being independent and I provide two examples below.

I was retained as an independent expert on a very large overseas civil engineering project. A fire destroyed much of the site temporary works. I was instructed to follow Counsel’s draft opening which I did.

I was well aware of the issues of specifications relating to temporary works and quality issues.

I quoted from Counsel’s text in respect of each individual issue and provided a detailed report section on each one.

On two of the issues I stated: “I do not agree”. I provided reasons as to why I thought that Counsel was wrong.” I sent in my draft report.

Unsurprisingly I never heard back. I did meet the instructing solicitor several months later. He was rather embarrassed and said, “you know how it is”.

Another contractor client refused to grant me access to its costs. Ultimately, because of its persistent refusal, I had no option other than to resign.

What causes experts to take the extreme or misleading views that some do?

The simple answer is I assume money and repeat business.

One solution to the issue of independence might be to appoint single joint experts. That can work but not always. On one occasion my report as a single joint expert did not stop a trial proceeding. One of the parties accepted my report, the other considered my report unfavourable to it and chose to continue to court.

For their part, Contractors need to avoid gross exaggeration and be realistic in their claims. Employer organisations need to be realistic in their obligations; and permit their appointed consultants to administer contracts in a professional manner.

Obtaining third party experts to assess potential worth of a claim before formal disputes commence can frequently assist.

Dispute Avoidance

If I was asked to advise clients and contractors what they ought to do to avoid disputes, my advice would include:

  • Clear and accurate information and contracts prior to commencement.
  • Regular meetings, between contractor and consultants on commercial issues.
  • Both parties cooperating by (amongst other matters) advising and agreeing on: –
    1. Dates for flow of design information;
    2. Advance/ near immediate warning of any perceived problems;
    3. Contractor to advise promptly of any changes to design or lack of information having cost or time implications and provide assessments of time and money, promptly and accurately.
    4. Consultants to respond promptly and accurately to contractor’s assessments and to persuade the employers to agree matters as the contract proceeds;
    5. Both parties to seek to reach agreement and address the underlying problems;
    6. If agreement is reached then payment of additional work or extended time and/or prolongation costs is made promptly;
    7. If there are genuine disagreements, on issues or values then consider bringing in a neutral(s) to evaluate and/or advise.
    8. Above all else, payment to be made properly and promptly.
    9. An end to the potential but frequent bargaining position that the contractor would drop its claims against the employer by it agreeing not to impose penalties.

Nothing I have said in this article is rocket science, but it never ceases to amaze me how construction professionals can make it more difficult than it actually is.

Some contractors submit hopelessly inflated claims and they need to be realistic and avoid gross exaggeration.

Some consultants demonstrate a lack of independence and appear to ignore their obligations in issuing instructions and addressing change orders.

Consultant organisations need to be independent and persuade their own clients of any potential liability.

Design and Build Contracts

I mentioned earlier the separation between the design and the construction process that is unlike some manufacturing industries that control the design and the construction or assembly process. One other method of improving construction and avoiding disputes, must include design and build contracts. Contractors can add enormous value to projects by being involved in the design.

On several of my projects “my” contractor proposed “no cost” redesigns of several elements of the project to make the construction faster, without diminution of quality or size. For their part, the consultants were willing to consider no cost changes to their original design.

One contract that “my” contractor tendered for and won was a marine and civil engineering project that at that time was worth several hundred million Dollars. There were four tenders invited – consultant’s steel and consultants concrete designs; contractor’s steel and contractor’s concrete design.

“My” contractor submitted four tenders the lowest of which was their concrete design. After extensive checking of the engineering principles, they were appointed. They had introduced some innovative design and construction principles. Ultimately the project was a great success, finished on time and budget and the contractor made a profit. No disputes!

An Unusual Use of Experts

All disputes are different and like experts appointed have similar roles. However, there was one appointment that in my experience used their engineering experts in a unique role.

I attended an interview with a process engineering contractor. To my surprise, I was told that they did not want to appoint me, but one of my colleagues who they knew. For the purposes of this article let me call him Fred.

The contractor was in arbitration on a refinery project contract in Northern Europe. The appointed arbitrator was a Judge acting as an arbitrator. He laid down his procedure for the arbitration. Both parties were to appoint an engineering expert, but the parties’ legal teams were not permitted to talk to them in the absence of the other firm.

Fred was one of my colleagues and the engineering company wanted Fred to be their expert. I was there to agree terms. Fred and his co-expert who I will call Bill appointed by the other legal team. met, and together they commenced work.

Both sets of lawyers were instructed by the arbitrator to provide a series of questions that the experts’ were to provide (hopefully) agreed answers. Between them, the law firms agreed some 50 questions.

The experts’ were permitted, in the presence of the legal teams to meet with potential witnesses of fact and seek more information.

My only contribution to their process occurred during one of Fred and Bill’s meetings held in our offices.

I was asked by Fred and Bill to join them as they were stuck on one question. They explained their different points of view. After mulling it over, I suggested that Bill’s proposed plan might not enable them to respond to the question and left them to it.

Bill, being the truly independent expert that he was, recognised it. Ultimately the two experts provided 50 agreed answers to the 50 questions. Unsurprisingly, at that point the dispute settled.

I am not suggesting that this method would work in every single case. What made it possible was the sheer professionalism and earnestness of the two experts, (and of course my interview skills!)

Finally, returning to my opening lines there is one line from the play that resonated with me and I quote: –

“The pure and simple truth is rarely pure and never simple”.

Well said Oscar! Couldn’t agree with you more.

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