Omitting an intended upper financial limit in an expert determination clause leads to uncertainty

Contractual parties adopting expert determination of disputes to a defined financial limit may regret omitting that specified limit from their dispute resolution clause. The NSW Supreme Court decided in The State of NSW v UXC Limited [2011] NSWSC 530 that where an upper financial limit was omitted from a such clause, the parties were ultimately not free to litigate irrespective of the expert's findings.

An omitted upper financial limit was not be read as zero and did not imply that any expert determination made under the clause it was omitted from, (irrespective of its value) could be reviewed by the Court.

This article considers the drafting pros and cons of expert determination clauses in dispute resolution clauses included in standard government contracts (Clayton Utz acted for BDM in this matter).