Recent changes to the legal framework regulating court appointed experts will result in improvements in the quality of commercial dispute resolution and, with it, improve investor confidence and the commercial certainty that businesses require.
Commercial disputes before the State Courts in the UAE (excluding the Dubai International Financial Centre Courts) are characterised by exchanges of written submissions with little, if any, taking of witness evidence or oral advocacy. Within this process, the courts are empowered to appoint one or more experts to opine on any of the issues in dispute.
Whilst the appointment of an expert may be made upon the application of one of the parties to the proceedings, it is commonplace for the courts to appoint an expert on their own initiative with the result that court appointed experts are frequently involved in opining on key aspects of a case.
The appointment of an expert and the stages which follow are crucial to the determination of a dispute. Whilst the courts are not bound by an expert’s report, in practice conclusions set out in a report are usually adopted by the courts.
In contrast to hearings before the court, sessions before the expert (effectively in the form of closed office meetings) allow for oral advocacy and active party participation in the process leading up to the filing of the expert’s report. The expert is required to meet with the parties and to provide each with the opportunity to present its case.
So what has changed?
Until recently, the legislative framework regulating experts and the expert stage of proceedings was set out in UAE Federal Law No 8 of 1974 Concerning the Appointment of Experts Before the courts (the Old Law) and Federal Law No 10 of 1992, as amended, Promulgating the Law on Evidence in Civil and Commercial Transactions (the Law on Evidence).
On 23 January 2013, Federal Law No 7 of 2012 On the Regulation of the Experts Profession Before Judicial Authorities came into force (the New Law). The New Law replaces the Old Law and continues to apply in conjunction with the Law on Evidence.
Welcome changes ushered in by the New Law may be summarised by reference to six categories of improvement:
- liability insurance;
- independence and impartiality; and
With the exceptions of experts agreed upon by the parties and endorsed by the courts and experts in a discrete area of expertise which the courts may call upon from time to time, experts are required to be registered in a register kept by the Ministry of Justice. In order to qualify for registration, Article 3 of the New Law provides that a candidate must inter alia:
- enjoy a good reputation and not have been convicted of any offence involving breach of trust or dishonor;
- hold a university level degree in his field of expertise;
- have at least seven years of post graduate experience in his field of expertise in the case of a UAE national and fifteen years in the case of a foreigner; and
- pass the Ministry’s exams.
The expert must update and develop his skills in his licensed field of expertise (Article 11(7)) and must renew his registration every three years (Articles 7 and 8). The expert must practice through a licensed office (Article 10), which draws in further qualifications which apply to the licensing of an office (e.g. additional requirements to license an accountancy practice).
Whilst the New Law does not expressly impose the requirements for an expert to update and develop his skills conditions precedent to the renewal of his registration, the three year marker for an expert to apply for renewal of his registration should provide a useful prompt for the supervising authority constituted by virtue of the New Law to consider an applicant’s level of compliance.
Article 5(2) of the New Law requires an expert to subscribe professional indemnity insurance from a UAE licensed insurance company. The terms are set to be determined in the Executive Regulation contemplated in the New Law (which is due by 23 April 2013). There is no indication as yet as to whether or not additional cover will be required as regards professionals who already have professional indemnity insurance owing to requirements specific to their own profession.
From a practical perspective, the requirement to have professional indemnity insurance means that experts liable for professional negligence in performing their duties should not have to bear the entire financial burden of their negligence personally. It also means that litigants with cause to pursue claims for negligence against court appointed experts should be able to turn to deeper pockets for recovery.
Prior to the New Law, there was debate as to whether or not an expert is entitled to delegate his work and, if so, to what extent delegation was possible.
The principle echoing through judgments rendered by the UAE courts prior to the New Law provided that an expert must personally perform his “core duties”, but is able to delegate “preparatory work” to others (see, for instance, Abu Dhabi Supreme Court, Appeal No. 313 of 21 (25.01.2001)). The courts also acknowledged that an expert enjoys a great deal of discretion in the manner in which he elects to perform his duties (see, for instance, Abu Dhabi Supreme Court, Appeal No. 421 of 23 (4.04.2004)).
In practice, the line between “core duties” to be performed by the expert himself and “preparatory work” was often blurred. In a recent experience, one expert arranged for administrative staff from his office alone to attend each meeting with the parties, collect evidence presented and draft minutes of each meeting which were subsequently signed by the expert himself without reference to the fact that the expert did not personally attend. Whilst the parties were at liberty to take issue with the ensuing expert report on the foregoing basis, in the course of the expert meetings it was difficult to persuade the expert that he had a personal obligation to meet with the parties simply relying on principles which derive from a more or less consistent series of judgments. This difficulty was compounded by the fact that there is no system of binding precedent in the UAE. Thus, whilst principles adopted by the courts are persuasive, they are not binding.
With that background in mind, Article 11(2) of the New Law is a welcome improvement. It expressly lays down the principle that an expert must personally undertake the tasks he is assigned by the courts. Articles 18 and 28 of the New Law attach penal and disciplinary sanctions to violations of Article 11(2). This should provide incentive for court appointed experts to perform their duties personally and thus improve the expert assessment stage of court proceedings.
Article 11(3) of the New Law obliges an expert not to disclose any information he may have obtained in the course of performing his duties. Articles 18 and 28 of the New Law also attach penal and disciplinary sanctions to violations of Article 11(3). In this, parties may find some assurance that sensitive commercial information disclosed in the course of expert meetings shall be treated as confidential.
Independence and Impartiality
The Old Law and the Law on Evidence expressly provided for a certain level of independence and impartiality. The court’s appointment of an expert could be challenged on the basis that the expert could not perform his duties impartially or without prejudice to one of the parties, for example if the expert is a family member of one of the parties or is in dispute with one of them (Articles 12 of the Old Law and 77 of the Law on Evidence).
In general, Article 11(4) and (5) of the New Law reiterate the obligations for an expert to be independent and impartial. The novelty is in Article 11(6) of the New Law which deems that an expert’s report shall not be accepted in circumstances where the expert has advised one of the parties, or has had access to party documents outside of the course of performing his duties as an expert in the relevant court proceedings. Whilst this improvement may appear unimportant at first glance, it is not. Article 11(6) of the New Law introduces elements of the notion of conflict of interest at a time where the notion is still in its early stages of development within the local legal profession.
In addition to opening up the appointment of an expert to an immediate challenge before the courts, any violations of the obligations for an expert to act independently and impartially are subject to disciplinary and penal sanctions (Articles 78 et seq. of the Law on Evidence and 18 and 28 of the New Law).
The New Law establishes a Committee of Expert Affairs comprised of at least five members (Article 12 of the New Law). Justice Omer Yunus Saeed is the Chairman of the Committee. Justice Tariq Yaqub Al-Khyat is the Vice-Chairman. This brings in trained jurists supervising a Committee entrusted with handling complaints relating to experts and expert reports (Article 13 of the New Law). The Committee may decide to dismiss a complaint or refer the complaint for further investigation after giving the expert an opportunity to state his case (Article 15 of the New Law).
The Chairman of the Committee has the authority to request that the Public Prosecutor interrogate an expert (Article 16(2) of the New Law). The Public Prosecutor may commence disciplinary proceedings against an expert (Article 19 of the New Law).
A Disciplinary Committee comprised of three judges shall conduct the investigations it deems necessary and render a reasoned decision after giving the expert the opportunity to state his case (Articles 16(1), 17 and 20 of the New Law). Sanctions available to the Disciplinary Committee range from a warning to final cancellation of an expert’s registration (Article 18 of the New Law).
In addition, Article 31 of the New Law empowers the Minister of Justice to appoint employees to audit an expert’s work.
Efforts to improve the legislative framework regulating expert evidence reflected in the New Law will, we hope, be effective in raising the quality of commercial dispute resolution before the State courts and, with it, improve investor confidence and the commercial certainty that businesses require.
The New Law follows a steady positive trend of developments in a legal landscape which continues to contribute to a healthy business environment.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.