Appoint an independent expert, valuer or arbitrator
All too often parties enter into a contract together which ends in a dispute. Whether the dispute relates to the value of shares in a company, determination of a specific contractual clause, or myriad other issues, it is frequently necessary to appoint an independent third party to resolve the issue.
ICAEW Chartered Accountants are ideally positioned to assist in many of these disputes and our online directory at www.icaew.com/find makes it easy to find someone with the relevant expertise. You can search by location and specialism and find contact details for firms allowing you to approach them directly to assess suitability and discuss potential engagement terms.
ICAEW has produced a guide, giving hints and tips on how you can create a shortlist of firms to contact and how to decide which one is most suitable for all parties in the dispute.
Different types of appointment
An expert determination is when an expert (such as a chartered accountant) is appointed to decide points of disagreement between the parties to a dispute.
Typically an expect may be appointed to determine (among other things):
- Completion accounts
- Deferred considerations
- Earnings before interest and tax
- Valuation of shares
The parties will need to agree to be bound by the determination as it does not have the same enforceability as arbitration.
This is a type of expert determination.
Arbitration involves processes that are similar to a more formal court hearing but is held in private before an arbitrator. The arbitrator considers the testimony of the parties and any evidence submitted by them and then makes a binding decision that can be enforced just like a court judgement.
The Arbitration Act 1996 provides for a fair, cost effective and fast resolution of disputes and these are the fundamental principles that an arbitrator must consider throughout the arbitration process.
Mediation involved an independent person (the mediator) helping the parties to negotiate a solution and relies on the parties’ agreement. A mediator has no decision making powers but instead facilitates communication and decision making.
Each party has an opportunity to express their case, what they consider to be the central issues and their desired outcome. The mediator will then assist in finding a settlement that all parties are happy with in order to bring the matter to a conclusion.
What happens if we cannot agree who to appoint?
Of course, there may be times when the parties involved in the dispute are simply unable to agree who to appoint and have reached a deadlock situation. If this happens, ICAEW can help through the ICAEW President’s Nomination Scheme by selecting a suitable firm included in the Find a Chartered Accountant website to undertake the work.
ICAEW will only take applications where both parties agree to use the ICAEW President’s Nomination Scheme, we refer to this as a joint application. ICAEW will only accept single applications where one party has obtained a Court Order in order to ensure that all associated parties fully engage with the process.
In order to use this service the parties will need to download and complete the necessary forms found below and make a payment of £5,000 + VAT which covers the administration costs involved in the search and selection of an appropriately qualified and experienced expert, valuer, arbitrator or mediator.
You will still be liable to pay the fees of the appointee taking on the engagement and will enter into an agreement with them directly. It is unlikely to be cost-effective to use the ICAEW service if the amount in dispute is less than £100,000. In these circumstances you may wish to consider alternative solutions and seek legal advice.
If you have any questions about using the online directory search or the President’s Nomination Scheme please call us on +44 (0) 1908 248 037 or email firstname.lastname@example.org