Expert Determinations are a form of Alternative Dispute Resolution, typically used where there are technical issues best resolved by a subject matter expert such as an accountant or valuation expert. Quick and flexible, Expert Determinations are usually final and binding on the parties, except in cases where the Expert Determination is shown to contain manifest error or fraud. But what does this really mean? A recent judgment from the High Court in WH Holding Limited vs E20 Stadium LLP [2025] EWHC 140 has considered what “manifest error” means. The judgment has also provided a useful digest of case law and principles for expert determinations generally.
In this article, Greg Huitson-Little, partner in the Forensic and Valuation Services team in Menzies LLP, sets out some of the key points from the judgment and some reflections from his and his partners’ experiences as acting in Expert Determinations.
How does an Expert Determination work?
Every so often I and my fellow partners have the privilege of being instructed to resolve disputes under Expert Determination clauses. This is usually in the context of M&A disputes, but can also arise across all manner of accounting and valuation related matters. There is a deep satisfaction in helping otherwise warring parties achieve resolution in a dispute and move forward, using our experience and expertise to arrive at a reasoned and correct answer.
Where parties agree to submit a dispute to an expert for determination, they will first agree on an expert and then negotiate terms with the expert. Contracts often outline a process to follow, but, like many forms of alternative dispute resolution, there is flexibility, and the expert will work with the parties to agree a suitable process and timetable. Generally, the process will include a round of submissions from the parties, potentially a round of reply submissions, and often scope for the Expert to ask questions to the parties. Sometimes there may be an oral hearing, but not always. Part of the role, therefore, is the ability to conduct an Expert Determination process – sometimes in the face of fractious relationships between parties and litigators lurking in the background drafting submissions.
The expert is often called the “Determining Expert”, “Expert Determiner”, sometimes simply the “Expert”. Or, if the stenographer didn’t quite catch what was said, the “Expert Terminator”. It did happen. We’ll stay with “Expert” in this article.
“Expert not Arbitrator”
Typically, the parties submitting to an Expert Determination will agree that the Expert acts as “Expert not Arbitrator”. This is an important distinction. In WHH v E20, the Court reiterated the principle set out some twenty years ago1 that “A person sitting in a judicial capacity decides matters on the basis of submissions and evidence put before him, whereas the expert, subject to the express provisions of his remit, is entitled to carry out his own investigations, form his own opinion and come to his own conclusion regardless of any submissions or evidence adduced by the parties themselves.”
This highlights a particular and possibly unique aspect of Expert Determinations: the Expert is selected for their specific expertise in the issues in dispute, and the Expert applies that expertise in resolving disputes. In doing so, the Expert can make their own enquiries and investigations to arrive at what they consider to be the right answer. The Court confirmed that the Expert “was not obliged to make his determination within the bounds of the submissions made to him by the parties; he was retained to resolve the dispute by using his expertise to make a correct determination.”
From our experiences as sitting as Experts in determinations, you can sometimes sense discomfort from legal teams more used to the boundaries of court and arbitral processes. That’s where having partisan expert advisers on your side – a role we often take – can help. The partisan expert advisers can help explain why an Expert is asking certain questions, and can help shape submissions and evidence in a way that presents well to an Expert.
Instructions are there to be followed
The Court also provided a reminder that the Expert needs to stay within their instructions. At paragraph 20 of WHH v E20, the Court referred to a case again some twenty years ago, Veba,2 where the Expert was specifically instructed to use a particular method, but did not. The Court explained that the case “was decided on the basis that the experts had materially departed from their instructions” and that “it followed that the parties had not received the determination they had agreed to be bound by.”
This was not an error – the Expert simply had not done their job. A salutary lesson in reading instructions carefully and doing what you are asked to do. Otherwise, the whole exercise could become a waste of time and cost.
Importance of finality
The Court also highlighted the importance of finality. The Court referred to an earlier case, Invensys,3 where an Expert Determination was on the same terms – “final and binding save for manifest error.”
Quoting from Invensys: “although it is clear that the parties desired finality, they provided for the exception of ‘manifest error’ in a determination which was to contain reasons. Therefore, although very substantial weight must be given to the parties’ desire to obtain finality, they must have contemplated an examination of the reasoning of the determination to see if it disclosed any manifest error”
This highlights an important aspect of Expert Determinations: through agreeing the determination to be final and binding, the Expert Determination allow parties to resolve disputes and move on. There are no drawn-out appeals processes, no challenges, no ongoing risks.
If the Expert Determination clause allows, then manifest error or fraud are the only challenges that can be made to an Expert Determination, but even then, the Court will give substantial weight to this desire for finality.
So, what is a manifest error?
Is it a howler? Is it a blunder? The Court noted that Counsel for E20 submitted that “a manifest error […] was “a howler”, something that “hit you between the eyes”, “so obvious a blunder that there really can be no dispute about it”.” As colourful as these descriptions are, the Court was not convinced this was the right approach, and thought it unfair to cast aspersions on the Expert’s approach in this way.
Rather, the Court explained that: “to be “manifest”, errors must be so obvious and obviously capable of affecting the determination as to admit of no difference of opinion.” This draws on long established principles confirmed by the Court of Appeal back in 2002 in Veba.4
The Court also noted the earlier guidance in Invensys that “It is not enough for the purchasers to show that their interpretation of the agreement is right; they have to show that the Expert’s interpretation of the agreement was obviously wrong,“5 and comments from the Supreme Court that “It is therefore clear that the permitted defences of ‘manifest or mathematical error or fraud’ are indeed narrow. An arguable error will not suffice, however well founded the allegation of error may ultimately prove to be”.6
That’s a high bar – to show manifest error, it seems the error has to be something that is obviously wrong, obviously affecting the Expert Determination, and not something that arises from a difference in opinion or alternative methodology. If there is a debate to be had, e.g. on interpretation of a contract or of an accounting standard, then you’re probably not in the realms of manifest error. As many of the Expert Determinations we look at involve some degree of professional judgement or interpretation, that must be comforting.
Final thoughts
Expert Determination clauses can be a very useful form of dispute resolution: confidential, quick, and flexible. Handled appropriately, they can be much less adversarial than a court or arbitral process. They work particularly well when there are technical issues best dealt with by subject matter experts.
In our experience, the more successful cases see legal and partisan experts working together to prepare submissions, speaking to the language of the Expert. Sitting as Expert, we find that submissions from joint teams are generally more focussed and get to the heart of the technical issues in dispute, aiding an efficient process.
Importantly, Expert Determinations offer a finality, albeit with a spectre of manifest error. But that’s a high bar to clear – an error that is so obviously wrong that there’s no room for argument, and not something arising from a difference in opinion or interpretation. If you are bringing a challenge for manifest error, you will need to be in the realms of showing that the Expert made an obvious mistake and that they were plainly, obviously, clearly, manifestly wrong. Call it a blunder, howler or something stronger if you wish. Just, well, wrong.
But as was the case in WHH v E20, it is possible to bring a successful challenge to an Expert Determination on the grounds of manifest error. Indeed, WHH was able to show the Expert got it wrong twice, both by reference to the underlying agreement: once because he misread “or” to mean “and”, and once because a calculation in arriving at the Expert Determination had no basis in the rules or wording of the agreement. Both errors had an obvious bearing on the outcome of the Expert Determination. The errors were unlikely to admit any difference of opinion. The Court thus granted a declaration that the Expert Determination was not final and binding on the parties. Usefully, the Court also went further to say what the result of the Expert Determination would have been had the errors not been made, so the parties may have finality after all.
1Bernhard Schulte GmbH & Co v Nile Holdings Ltd [2004] EWHC 977 (Comm)
2 Veba Oil Supply & Trading GmbH v Petrotrade Inc (“The Robin”) [2001] EWCA Civ 1832
3 Invensys plc v Automotive Sealing Systems Ltd [2002] 1 All ER (Comm) 222
4 Veba Oil Supply & Trading GmbH v Petrotrade Inc [2002] 1 All ER 703
5 Invensys plc v Automotive Sealing Systems Ltd [2002] 1 All ER (Comm) 222 [1] Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd [2023] UKSC 2, [2023] 1 WLR 575
6 Sara & Hossein Asset Holdings Ltd v Blacks Outdoor Retail Ltd [2023] UKSC 2, [2023] 1 WLR 575
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