Experts gone wrong

In contracts, it is not uncommon to include a dispute resolution mechanism in order to deal with any issues between the parties, particularly if a long relationship is envisaged.

These usually provide for a staged process, escalating disputes up to the management of both parties for resolution, failing which either party can refer the matter to an independent third party process for determination. Referral to an expert is a popular choice and considered more time and cost effective than either arbitration or litigation.

The experts determination is generally binding and the grounds for setting it aside are limited and successful applications to set aside are relatively unusual. However what happens when the expert gets it wrong, is there any recourse?

In WH Holding Ltd v E20 Stadium LLP [2025] EWHC 140 (Comm) the High Court set aside an expert determination on the basis of manifest error. The claimant (WHH), defendant (E20) and West Ham Football Club were parties to a contract containing an expert determination provision with a manifest error carve-out.

A dispute arose regarding whether E20 was entitled to a £3.6 million profit share on an option agreement having been entered into. The expert determined the issue in favour of E20. WHH disagreed, asserting that the expert had made two manifest errors:

  • He had accepted E20’s calculation of the profit share on a basis that was not supported by the relevant clause of the contract.
  • He had found that four relevant agreements constituted a single transaction even though that was contrary to other contractual provisions that necessitated their being treated as different transactions.

The judgment contain a useful discussion of the meaning of “manifest” where the judge opined that “it is safer to focus on the IIG Capital LLC v Van der Merwe [2008] EWCA Civ 542 guidance read together with the Veba Oil Supply & Trading GmbH v Petrotrade Inc [2001] EWCA Civ 1832 guidance: to be ‘manifest’, errors must be so obvious and obviously capable of affecting the determination as to admit of no difference of opinion”.

The judge stated whether there has been a manifest error was context and contract-specific and that the expert’s terms of reference and the documents expressly referred to in the determination and forming an essential part of the determination, were relevant and did not constitute impermissible “extensive” investigation. He agreed with WHH that the expert determination in this case was “obviously wrong”; in particular, in calculating the profit share, he had treated a contractual “or” as an “and” and had used a formula unsupported by the contract.

Experts and those relying on experts alike should therefore make sure that terms of the dispute resolution clause are adhered to in order to avoid coming to the wrong determination.

If you would like to discuss any of the matters raised in this article please contact Sing Li.