Expert Determination, Neutral Evaluation, Dispute Boards and Other Mechanisms

Beyond arbitration, mediation, conciliation and negotiation lies a group of processes designed for particular situations: a technical question that must be answered quickly, a party that will not settle until it hears an assessment, a construction project that cannot stop while a dispute is decided, and a family matter in which the lawyers themselves undertake not to litigate. Each is placed by two questions: does the neutral decide or only advise, and is what he produces binding of itself, binding unless challenged, or merely an input into the parties' own bargaining.

The six mechanisms arranged by what the neutral produces, and the two questions that place any of them

1. Expert Determination

A third person with professional skill decides a defined question, such as the value of shares, the quantity of work done or the conformity of goods to a specification. He is not required to hear the parties and may act on his own inspection and knowledge. His decision is not an award: it binds as a term of the contract, is not enforceable as a decree, and cannot be challenged under Section 34 of the Arbitration and Conciliation Act, 1996. The recognised grounds of attack are fraud, collusion, a departure from the instructions and, where the contract so provides, manifest error. The attributes distinguishing it from arbitration were stated in K.K. Modi v. K.N. Modi, (1998) 3 SCC 573, and the subject is treated separately in this series.

2. Neutral Evaluation and Early Neutral Evaluation

A neutral, often a retired judge or a senior practitioner, hears a short presentation from each side and gives a frank, non-binding assessment of the likely outcome. Nothing is decided. The object is to correct the misjudgement of their own cases that keeps parties apart, and the evaluation is usually followed immediately by a negotiation or a mediation.

• Early neutral evaluation is the same process conducted at the outset, before the costs have been incurred and before positions have hardened. It was introduced into Indian practice through Section 89 of the Code of Civil Procedure, 1908 and has been used by the Delhi High Court, which has treated it as a form of judicial settlement available under that section.
• Its value lies where the parties are far apart because each has been advised optimistically and neither will move first.
• Its limit is that the evaluation binds nobody. A party that dislikes the assessment may ignore it, and the process has then cost time without producing anything except, sometimes, a more realistic view.

3. Dispute Boards

A dispute board is a panel, usually of three, appointed at the beginning of a long construction or infrastructure contract and remaining in place throughout. It visits the site, follows the progress of the work and decides disputes as they arise, which is what distinguishes it from every other mechanism: it is in place before the dispute exists.

In Indian law a dispute board decision is a contractual arrangement, not an award. It is binding because the contract says so, and it is enforced by a claim for breach or, more usually, by an arbitration in which the failure to give effect to the decision is itself the claim. A board decision is also commonly a condition precedent to arbitration, which brings it within the law on multi-tier clauses.

4. Mini-Trial

Despite its name, a mini-trial is not a trial and produces no decision. Counsel for each side present the case in summary form to a panel consisting of a senior executive of each party, who has authority to settle and has not been involved in the dispute, sitting with a neutral adviser. The executives then retire and negotiate, with the neutral available to give an opinion if they ask for one. The technique works because it puts the case in front of the people who can settle it, who have usually heard only their own side's version, and because the neutral can tell them what a court is likely to do. It is used for large commercial disputes between organisations that will continue to deal with each other.

5. Settlement Conference

A settlement conference is a meeting convened and conducted by a judicial officer, other than the judge who will try the case, directed at exploring settlement. It is the form that judicial settlement takes in Section 89 of the Code of Civil Procedure, 1908 as explained in Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., (2010) 8 SCC 24, and it differs from mediation in the identity of the neutral rather than in technique. The presence of a judicial officer gives the assessment weight; the corresponding risk, and the reason the trial judge does not conduct it, is that a party may feel unable to refuse.

6. Collaborative Law

In collaborative practice the parties and their lawyers sign a participation agreement undertaking to work towards a settlement, to disclose all relevant information voluntarily, and to refrain from litigation while the process continues. Its distinctive feature is the disqualification clause: if the matter goes to court, both lawyers must withdraw and the parties must instruct new counsel. The purpose is to align the lawyers' interest with settlement, since litigation costs them the retainer. It developed in family practice and is used in that field, with neutral financial and child specialists brought in as required. It has no statutory basis in India, and the disqualification clause raises a question under the rules of professional conduct, but nothing prevents parties from agreeing to it.

7. Placing a New Mechanism

8. Related Topics and Provisions