Expert or arbitrator? The line holds

WA Supreme Court upholds expert determination despite parallels with arbitration 6 min read

Expert determination clauses are increasingly common in commercial contracts, particularly those for construction, infrastructure and resources projects, and it is typical for such clauses to specify that the expert will act as an 'expert' and not an 'arbitrator'. But what exactly does this mean for the expert's role and the processes applied? If they apply a process that starts to mirror an arbitration, will the determination process be invalid? In this Insight, we look at the recent Supreme Court of Western Australia decision in Jako Industries Pty Ltd v Perkins (WA) Pty Ltd [2026] WASC 158 and its useful guidance on these questions.

Key takeaways 

• An expert is required to follow the processes in the relevant expert determination provision and, so long as this occurs, the fact that some processes might mirror what occurs in an arbitration does not necessarily invalidate a determination.
• So long as an expert stays within the bounds of the expert determination provisions, the fact that a determination is made by preferring one party's submissions and evidence over another does not mean the expert has failed to apply their own expertise or that the process is invalid.
• The fact that an expert considered one party bore an onus of proof and applied this in a determination was held to be consistent with an express obligation to act 'in accordance with law', and did not mean the expert was acting as an arbitrator.
• Expert determination clauses need to be drafted carefully—in particular, the provisions aimed at distinguishing the process from arbitration.
• The basis on which an expert determination can be challenged remains very limited.

Background

Note: Jako has appealed the Supreme Court's decision¹ and the below analysis should be read as subject to any findings on appeal.

The case concerned a subcontract for mechanical services works, which provided that unresolved disputes could be referred to expert determination under the Resolution Institute Expert Determination Rules (commenced 3 August 2016) (the Rules).²

Relevantly, clause 33.6(5) of the General Conditions related to the expert determination process and stated that the 'Expert will not act as an arbitrator'.

This was coupled with subrule 5(2) of the Rules, which provided:

The parties agree that:

a. the Expert is not an arbitrator of the matters in dispute and is deemed not to be acting in an arbitral capacity;

b. the Process is not an arbitration within the meaning of any statute.³

The subcontract was priced on a remeasurement basis. At the end of the works, a dispute arose over the proper valuation of Jako's works. The expert determination process was followed, and a quantity surveyor appointed as the expert to determine the dispute. He determined the matter on the papers and largely preferred Perkins' assessment (which drew on an independent expert's report),  awarding Jako materially less than it had claimed.⁴

Jako applied to the court for a declaration that the determination was of no force and effect. Its primary argument was that it was invalid because the expert had acted as an arbitrator, rather than an expert. It alleged that there were a number of reasons for this, including that he:

• failed to undertake his own independent remeasurement of the works, instead weighing the parties' submissions and evidence;
• based his determination on his assessment of which party's calculations were more likely to be correct, rather than applying independent expert judgment;
• preferred Perkins' rates on the basis that they were prepared by a qualified expert witness (whereas Jako did not adduce expert evidence);
• purported to determine questions of credibility; and
• considered that Jako bore the onus of proof and would decide against it if it failed to prove its case on the balance of probabilities.

Jako also argued that, because the expert had conducted himself as an arbitrator, he was required to afford procedural fairness, and had failed to do so.⁵

The decision

The court rejected Jako's argument that the expert had acted as an arbitrator and not an expert, and that therefore the determination was invalid.⁶

Clauses that express an intention for the expert not to act as an arbitrator 

The court considered the proper construction of the provisions relating to the expert determination. It found that the parties' objective intention was clear—even if the process followed included features resembling arbitration, such as written submissions and expert reports, the combined effect of the provisions was that the process was deemed to be an expert determination.⁷

The court struggled somewhat with clause 33.6(5), which provided that the expert 'will not act as an arbitrator'. Read in isolation, it was not clear whether it was intended to have a similar effect as the wording commonly used in expert determination provisions that the expert was engaged 'acting as an expert and not as an arbitrator'—such language excludes arbitration legislation, and dispenses with any need for the expert to hear evidence and the parties, and determine the matter judicially.⁸

However, the court found that the Rules made the parties' intention clear: unlike the subcontract, they also deemed the expert not to be acting in an arbitral capacity.⁹

The court concluded that:

the combined effect of the provisions as to the role of the expert in the Subcontract and the Rules was to recognise that, regardless of the exact process which the parties agreed for the Expert Determination, the overarching agreement was that the parties intended for the expert to exercise their own expertise, skill and knowledge, and that the expert was not required to act in a judicial manner, 

and that 'the purpose of subrule 5(2)(a) was to put that beyond doubt'.¹⁰

 A further, distinct purpose of subrule 5(2)(a) was to recognise that, even where an expert determination process overlapped with acting in an arbitral manner, the parties intended the process to remain an expert determination without requiring the expert to act judicially.¹¹

Did the expert act in accordance with the contractually agreed process?

The real question was not whether individual procedural steps resembled arbitration, but whether the expert followed the contractually agreed process.¹² Here, the contract required him to give reasons— and the dispute was to be resolved according to the Rules, which contemplated submissions and evidentiary material, including expert reports, but otherwise left the means of reaching a decision to the expert.

The court also found:

• Nothing in the contract required the expert to independently remeasure the works. The parties had agreed he could receive expert reports, and the requirement for a cost-effective and expeditious process meant an independent valuation would have been disproportionate to the sums in dispute.¹³
• While the expert never disclaimed the use of his own expertise,¹⁴ there was considerable evidence that he had applied it. The fact that he preferred one party's evidence over the other's, and had not undertaken his own remeasurement, did not mean he failed to exercise his own independent judgment and expertise.¹⁵
• By authorising the expert to consider expert evidence, the parties necessarily contemplated that he would assess its weight and credibility using his own expertise. The court therefore rejected Jako's complaint that the expert made credibility findings, and that this meant he had acted as an arbitrator and not an expert.¹⁶
• The fact that the expert had considered Jako to bear an onus of proof was an orthodox approach, and consistent with the requirement in the expert determination clause that he act in accordance with the law. It did not mean he acted as an arbitrator and not an expert.¹⁷
• The expert was not obliged to act in a judicial manner or to ensure procedural fairness. His obligations were confined to following the process that the contract and the Rules prescribed, which he did.¹⁸

Practical lessons 

The decision in Jako v Perkins supports the principle that parties are free to choose expert determination as a process, and have it be final and binding. So long as an expert follows the process set out in the relevant provisions, a determination will not be void simply because some of the processes applied might be similar to arbitration.

This is consistent with the existing authorities, which establish that there are limited grounds on which courts will entertain challenges to expert determinations. They are:

• fraud or collusion;¹⁹ 
• partiality (requiring actual bias);²⁰ or
• where the expert has failed to comply with the contractual process or has determined an issue beyond the scope of their jurisdiction.²¹

Conversely, expert determinations are generally not vulnerable to challenge for alleged breaches of natural justice. Any procedural fairness obligations arise from the parties' contract and applicable rules, rather than any standalone legal requirement.²²

Again, an appeal has been filed by Jako, so watch this space—we will keep you updated on developments. In the meantime, please contact any of the people below if you would like to discuss the issues raised in this Insight.