What does it mean to say that an expert has made a decision in “manifest error”?

According to common practice in dispute resolution clauses for contracts, the decision of an independent expert or dispute resolution body is binding, except in the case of ‘manifest error’ (or similar).

So what exactly is ‘manifest error’? And how can its definition be better understood to help parties prove – or disprove – that manifest error has, indeed occurred?

General commentary on “manifest error”

In the context of expert determinations, for an error to be manifest it must be apparent on the face of the expert’s determination and accompanying reasons.

The error must be considered to be an ‘oversight or blunder so obvious and obviously affecting the determination, as to admit of no difference of opinion’.

To explain some ‘real world’ background, a 2013 UK High Court decision, Walton Homes Ltd v Staffordshire County Council, stated that it is not sufficient that the reasoning be arguably wrong, or even be accepted as wrong – it must be manifestly wrong. In this case, the judge concluded that, as the parties before him were each able to put forward properly arguable competing submissions as to the correct approach to the interpretation of the clause in question, the alleged error was not manifest.

In the TX Australia case, Brereton J at [20] defined “manifest error” as an error that is apparent on the face of the expert’s determination and accompanying reasons and does not distinguish between “facile errors” and “those of complexity” – nor between “obvious errors” and “less obvious errors”, nor between “errors of fact” and “errors of law”.

In fact, the key requirement is that the error be apparent on the face of the determination and reasons.

Brereton J found that ‘if it requires the adducing of contentious expert opinion before me to establish error, the error was certainly not “manifest”’. Each of TXA’s submissions was considered in detail, but ultimately dismissed.

Interfering in expert determinations

Over and above the requirements above, it is also worth noting that courts generally are reluctant to interfere in disputes regarding expert determinations.

In seeking to challenge an expert determination on the basis of manifest error, the decision must clearly come within the types of analysis above. If this is not the case, it may be unlikely that a party will have grounds to establish the existence of a manifest error in the relevant circumstances.

 

Note: This insight contains commentary for general reference purposes only. It does not constitute legal advice and should not be relied on for any purpose. You should always seek specific legal advice based on your own individual circumstances.