fbpx
HCR Law Events

19 July 2023

Resolving an advanced engineering dispute – how difficult could it be?

Advanced engineering cases involving one or more technologies tend to be multi-dimensional and, not unusually, multi-party and they are highly complex. Deciding the right approach to resolving such cases therefore calls for careful thought and no little subtlety.

To illustrate: At the heart of the dispute may be a product or component failure in an operational setting that has been pushing the boundaries of technological development. The failure may well engage more than one engineering discipline, a material science question and often a computer science issue.  If the component is installed in a system or network with connected parts, the relationship between the parts may well come into play. Design issues can be involved and add to the complexity.

Throw in the contract terms that govern the installation, rights of ownership (including those of intellectual property), and the use of the component in its setting, with the possibility of questions on which state’s law and jurisdiction (perhaps more than one) apply, where there has been a cross-border supply, and you can see how sophisticated the decision-making may need to be.

Although the views of the technical experts that the parties instruct to provide evidence for a claim are invariably going to be significant, a fundamental question will be, who is the best person to actually decide the case and that means considering the choices for procedure and forum.

At the outset of their commercial relationship, the parties may have agreed that if a dispute arises, it should be decided by ‘arbitration’, as this can offer the prospect of appointing someone (perhaps, a panel) to decide the case with specialist knowledge of or familiarity with the technical fields engaged in a particular manufacturing or industry context. The view may be that such familiarity and understanding will produce a better decision. If that is the route chosen, the agreement to refer the dispute to arbitration should be reduced to writing. It may even be appropriate at the outset to select a specialist arbitration service provider’s rules to fit the types of case that may arise.

However, arbitration may not be the right choice for a number of reasons. The appointment of a technical specialist as an arbitrator might sacrifice the required experience or skill-set to analyse and weigh in the balance large quantities of documentary evidence and to set that evidence in its proper legal context. For a high-quality decision in a particular case, the latter characteristic may be the more important than the former.

As a process, arbitration has benefits, but it also has some characteristics that can be a disadvantage for advanced engineering cases. A good example would be that an arbitration agreement will only bind the parties to it. Therefore, if you do not have agreements with others contributing to the supply chain who are participants in the dispute, you may find you cannot force their hand to be parties to the arbitration, and those outside the arbitration will not be bound by the award made. Before making an arbitration agreement it is therefore important to think the options through.

It may be a more suitable option to default to a Court forum – litigation – that is used to handling technical claims. There are divisions of the English High Court that routinely try complex technical claims with assistance from expert witnesses on issues of science and engineering that are relevant to the case. Litigation rules are sophisticated and bring a high degree of certainty to the process.  A counter to that, is that, comparatively, litigation rules may offer less flexibility than an arbitration.

The thought process should not end there, however. It is important to consider the comparative expense of a procedure that, to some degree, leans on publicly funded institutions – though may be more procedurally demanding (litigation) – against a procedure that requires the adjudicator – the arbitrator or arbitration panel – venue and sometimes the service provider to be paid for privately, and has less certainty of costs management and award (arbitration).

Ultimately, you will want to be able to enforce any decision and if you have a foreign counterparty defendant that only has assets in its home jurisdiction, that may be more of a challenge for a Court Judgment than an arbitration award which has wider recognition. This is a technical and nuanced issue that should be considered when the contract is being made.

Both litigation and arbitration are procedures the culmination of which will be a decision. In context, the process and outcome may not be the right medicine for a dispute, however. Where the central issue in the case is a purely technical one, the parties may consider compartmentalising and agree a referral to an expert for a single-issue determination. This can speed up a resolution, lead to negotiation and save costs, however, where the technical issue is just one lever in a multi-faceted case, such a referral can unbalance the parties’ bargaining positions and put one party at a disadvantage in the resolution of the whole.  All highly nuanced.

It is an aspect of human nature that we look for simplicity in our search for an understanding of a situation. A benefit of simplicity is that it doesn’t require the amount of energy of thinking – the drain on the brain – that our thought processes call for in digesting complex issues. Simplicity makes our choices easier. A binary choice – “Should I do this or that?” – is far easier than a choice from several options. Think about selecting from a takeaway menu and you get the point.

In the legal arena, the casual observer may well think that one of the roles of the disputes lawyer – the litigator – is to make what is complex, rudimentary… binary. An attractive thought though that maybe, in advanced engineering cases, that perspective can be a disservice to the client. The litigator needs to be a translator who makes comprehensible what may not be easy to understand and vitally, to find a straightforward route to an outcome. It is that form of simplicity that is called for; very different from painting a picture that blunts the edges of important dimensions of a case that the client needs to take account of when balancing risks in decision making.

Share this article on social media

About the Author
Dominic Hopkins, Partner, Joint Head of Central England Office

view my profile email me

Want news direct to you?

sign up


What is the future of the office?

show me more

Got a question?

Send us an email

x
Newsletter HCR featured image

Stay up to date

with our recent news

x
LOADING