Case Law Update: Challenging Expert Decisions in WH Holding Ltd v E20 Stadium LLP

“Expert resolution” is a method of alternative dispute resolution (ADR) and is a contractual agreement by parties to have specific types of contractual disputes resolved by an “Expert” rather than through other means such as mediation, arbitration or the courts.

It is commonly used for disputes concerning specific technical or industry-specific matters of a non-legal nature that arise in a contract, where a decision by an “Expert” with the relevant field of expertise is agreed as being a more appropriate, cost-effective and expedient way to resolve the dispute. Additionally, as compared with other dispute resolution means, Expert resolution can offer a less contentious forum for resolving a dispute that is more conducive to the parties continuing their ongoing business relationship.

In the context of hotel management agreements (HMAs), it is standard practice for disputes over budgetary matters to be resolved by an Expert. Other areas of dispute that can be subject to Expert resolution include brand standards’ compliance, selection of a ‘competitive set’ and the determination of a hotel’s financial performance.

Given that Expert resolution is a purely contractual arrangement (i.e. there is no underlying law or statute that specifically governs it), clauses providing for Expert resolution need to be carefully drafted and clearly define how the process is to work. Details that need to be covered include the background and qualifications for the Expert, how the Expert is appointed, any rules, timings or requirements for the procedure, and the allocation of the Expert’s (and each party’s legal) costs. 

A recent case in the UK High Court highlighted the care that must be taken in drafting an Expert resolution clause, especially with regard to the circumstances, if any, in which an Expert’s decision can be challenged.

While the case does not involve the hotel sector, it still has wide applicability to HMAs (and any other hotel contracts using Experts) and is particularly insightful given there is generally little case law on Expert resolution.

An article on the case and its implications on the drafting of Expert clauses, written by Victoria Hobbs and Rachel Howell in our disputes team, can be found here.

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