The settlement of commercial disputes regarding the sale of sport horses through “Equestes”
by Luc Schelstraete
Attorneys specialised in what is known as equine law are active in a niche market. These attorneys have often ended up practising in this branch of the profession as a result of their interest in and experience with horses. Often, these horse-related cases concern substantial financial interests of millions of euros, but they can also only involve several thousands of euros. Experience has taught us that it is extremely important for clients (and in most cases, also the most efficient) when their attorney also speaks the language of the horse world. Most parties who have ever been involved in legal matters related to horses will have discovered that although it is possible to obtain the assistance of attorneys specialised in this field, in the majority of the cases they will also find themselves dealing with judges who are unfortunately not familiar with this very specialised subject matter. In many of these cases, these judges must seek information and explanations from the experts in the field. This usually occurs in the cases in which the legal context is dependent in part on a veterinary issue. This means that legal proceedings not only become a lengthy process, but also a very expensive one. It occurs on a regular basis that the costs a party incurs to resolve a dispute ultimately exceed the proceeds. Even though the judge ruled in his or her favour, the client is dissatisfied after the fact due to the costs incurred, and this is of course understandable from the client’s perspective.
This very situation was one of the reasons that Luc Schelstraete, LLM, as an attorney specialised in equine law and thus confronted with these types of problems on a daily basis, decided to find a solution. Together with veterinarian Dr Alfons Geerts, he started the firm Equestes.
What is Equestes?
Equestes is an organisation with which many prominent specialists from both the international equine legal profession as well as the veterinary world are affiliated. Equestes combines its legal know-how with specific knowledge of veterinarian science. The Equestes Expert Panel, for example, comprises professionals such as equine attorneys from Belgium (Bert Beelen law offices), Denmark (Ms Nicoline Hyldahl), Germany (Dr Burkart Fischer), France (Mr Ian Blackshaw) and the United States (Ms Julie Fershtman). The veterinary specialists originate from Germany ((Dr Jan-Hein Swagemakers and Dr Thomas Weinberger), the Netherlands (Dr Frans van Toor and Dr Erik Bergman), Italy (Dr Lorenzo D’Arpe), France (Philippe Benoit), Sweden (Dr Jonas Tornell) and Belgium (Dr Hans Wilderjans). With a wealth of knowledge and experience like this, Equestes can offer solutions for a variety of situations and disputes, yet can also help prevent the disputes to start with. What Equestes’ work actually involves and what it has to offer might perhaps become clearer based on a description of the services it provides; these are discussed in further detail below.
What does Equestes offer?
Equestes’ services may be divided into three mainstays:
1 Equestes Contracts and Documents,
2 Equestes Expert Panel,
3 Equestes Mediation.
Equestes Contracts and Documents
Equestes offers standard contracts of purchase and sale for national and international transactions. Even today, many purchases and sales are conducted without a single word being put in writing, in spite of the fact that these transactions can involve enormous amounts of money. The use of contracts should be much more firmly established in the equestrian world. This is why most equine attorneys recommend using contracts. Although using a contract cannot prevent every dispute, many arguments that are often conducted during legal proceedings could be avoided. An often-used defence in legal arguments employed in equestrian cases actually provides for the capacity in which the parties were acting. In other words, who purchased from whom, and are professionals or consumers involved in the transaction? The seller often doesn’t even know to whom he is ultimately selling, since all of the negotiations are handled by the broker, and the flow of money is also often handled by this same intermediary. By using a contract, the parties are at least establishing exactly who the parties involved in the transaction are, and this will, at the very least, prevent a lawsuit from being brought based on this fact alone. In addition, the parties are also “forced”, as it were, to disclose the details of the transaction when it comes to the position of any brokers involved, and the compensation paid to these intermediaries. An interesting decision was recently rendered in the equestrian world by the District Court of Amsterdam in a case involving a broker who – as it was later discovered – had received a commission from both the buyer and the seller without either of the parties being aware of this. This broker was ordered to refund all of the fees received to the buyer and seller, and also to compensate the parties for the damage they incurred. These types of situations can be prevented as long as everything is clearly set out in writing. This ultimately benefits the transparency and credibility of the horse trade.
The major difference between the contracts which had been used up to now in transactions involving horses and the Equestes contract is in the method used to settle disputes. With the vast majority of the contracts used, a court will ultimately have to adjudicate and render a decision in the dispute. If the parties choose to use the Equestes contract, disputes are resolved by a binding opinion issued by members of the Equestes Expert Panel. This topic will be discussed in further detail later in this article, including the advantages of applying this method of dispute settlement.
Equestes also offers a standard examination form. In many countries, pre-purchase and sale examinations are performed on horses, however, nearly every country requires a different examination form, and there are different customs and standards that apply. A uniform examination form would definitely be a great solution for international transactions; this is an opinion that has been heard so often. Equestes has responded to this frequently expressed wish, and in cooperation with top examination veterinarians from all over the world, has drawn up the most optimum examination form. The advantages of this examination form are explained in further detail below.
Equestes Expert Panel
The Equestes Expert Panel unites prominent attorneys who are specialised in equine law, and top veterinarians, each of whom has their own particular area of expertise. These experts are required to conduct themselves in accordance with the rules of the Equestes Code of Conduct. This guarantees that the interests of the parties are served. For example, the experts should not have any interest in the outcome of their investigation, thus enabling them to guarantee that they remain impartial and independent. Moreover, during the investigation, they may not have any direct contact with one of the parties, unless the other party grants its consent for this in writing.
Thanks to all of its professional knowledge, Equestes is capable of providing a solution to nearly every problem. The Equestes Expert Panel may be consulted by courts and other official bodies, for example, it provides binding opinions in disputes, and can intervene in arguments that arise as a result of pre-purchase examinations. With regard to this last point, it is perhaps best to provide an example in illustration. In the international horse trade, in by far most of the cases, the horses must undergo a(n) (extensive) veterinary inspection. Based on the examination, which consists of a clinical exam and an X-ray exam, the examining veterinarian will give his or her evaluation, followed by a positive or negative opinion (and any necessary comments or reports of abnormalities) relating to the purchase or sale of the horse in question. In many cases, after the examination, any X-rays taken by the examining veterinarian will be submitted to the buyer’s own veterinarian. It is not rare for the two veterinarians to arrive at different interpretations of the X-rays, as a result of which a transaction may be cancelled. However, who is actually right in a discussion like this? Evaluating an X-ray is subjective; there are actually no clear criteria. Evaluating X-rays is done on the basis of the following classification system, whereby 0 = perfect, 1 = good, 2 = acceptable, 3 = increased risk and 4 = unacceptable. However, what one veterinarian might consider to be a 2, may be scored by another physician as being a 2-3 or even a 3, and this can make the difference in whether or not a contract of sale is concluded. In these types of differences in interpretation, the Equestes Expert Panel can provide an independent, objective evaluation or binding opinion so that the parties know where they stand, and whether or not to “take the plunge”.
The third mainstay is Equestes Mediation. Although mediation has already been established as a form of dispute resolution, it is still rarely used in equestrian cases. This is a missed opportunity. Equestes Mediation is the ideal solution, particularly in cases which do not involve large financial interests and the costs of attorneys and proceedings are too high relative to the proceeds from this type of case, or in matters in which the parties do wish to continue their business relationship in the future, and therefore prefer to resolve their present conflict amicably. The mediators that Equestes can provide also speak “horse language”. If the dispute involves a complicated veterinarian argument, it can be helpful to call on the services of a mediator with veterinarian knowledge whereas in other cases, it is better to employ the services of a mediator with a background in equine law. The advantages of mediation over legal proceedings are thus the speed with which a solution can be found, it results in a win-win situation in most cases, and it is considerably less costly than a civil procedure. Moreover, the entire process is supervised by a mediator with specific knowledge in the field, rather than a judge who is not familiar with the complicated subject matter.
Advantages of Equestes
Equestes offers a number of advantages.
Binding opinion versus a civil procedure in court
If the parties agree to make use of the Equestes contract in the creation of the contract of sale, the parties elect to establish as many aspects of the transaction in writing in advance so that no discussion on these points can arise later. As mentioned previously, this not only includes the capacity of the parties and the position and the compensation paid to the broker, but also an extensive report of the history of the horse involved. Via a seller’s declaration, the seller must fill in a questionnaire, providing all of the information that could be relevant for the buyer in purchasing the horse. If, for example, during the final months prior to the contract of sale, medication had been administered to the horse, the seller must report this. The form also contains questions on whether or not the horse has recently displayed lameness, has been vaccinated correctly and fitted with shoes, and states the level achieved in the sport. In other words, the seller is induced to provide full disclosure. If a dispute nonetheless arises after the delivery because, for whatever reason, the horse does not satisfy the terms of the agreement, the dispute does not have to be submitted to the court, but to the Equestes Expert Panel instead. What are the benefits of this?
In the case of a civil procedure, people usually find themselves facing high attorney’s fees, lengthy proceedings that can sometimes go on for years, and a court that, due to its lack of familiarity with the subject matter, is often forced to gain insight into the material involved in the case via an expert report. If an expert investigation becomes necessary, this often means that the case will be delayed for months, not to mention the costs that are incurred for carrying out this type of investigation. Another relevant factor is the fact that there are regular discussions in the Netherlands regarding the independence and impartial position of the aforementioned experts. In the Netherlands, an expert is usually appointed who is affiliated with the Faculty of Veterinary Medicine in Utrecht. Given the fact that most veterinarians have some type of connection with the experts affiliated with this university, one of the parties is usually inclined to feel that this expert cannot fully guarantee his or her impartiality and independence. Appointing an expert from abroad appears to be nearly impossible. In many cases, the outcome of an expert report is not very satisfactory for the reasons explained above.
However, there is another way. If a party decides to use the services of Equestes, an expert or group of experts may be appointed soon after the dispute arises; these individuals possess the expertise required, enabling them to get to work quickly on arriving at a solution. The ultimate decision is then provided by people with specific knowledge of the matter at hand, and the parties must abide by this decision given the fact that it is a binding opinion. Compared to a civil procedure, this process will may be completed at a lower cost and much more rapidly; this is due, among other reasons, to the fact that the parties are not bound by court schedules.
If, in entering into a contract of sale, a party has not chosen to use the Equestes model and nonetheless ends up in court, Equestes can still offer a solution. If an expert must ultimately be appointed, Equestes has a large pool of experts to choose from who can act as court-appointed experts. Each of these experts has their own field of expertise such that a suitable expert will be available for appointment for any type of problem.
Not only can Equestes help resolve disputes, it can even help prevent them. The reason for this lies in the disclosure that parties must give when they use the Equestes Contract as described above. Another advantage is the use of the Equestes examination form. This examination form has been compiled with a great deal of care, based on the experience of top veterinarians from all over the world. The horse in question is also examined very extensively. The more extensively a horse is examined, the sooner (minor) abnormalities will be detected. This may lead to the cancellation of a deal, but on the other hand, it can also prevent a legal dispute that could have arisen if the contract of sale had been concluded. It is also possible that in spite of these minor observations or abnormalities in the horse, the contract of sale is still concluded, but that these abnormalities are recorded in such a manner on the examination form that the buyer will have accepted these facts, and therefore no longer creating grounds for dissolving or terminating the contract of sale after the fact. In other words, the parties know what they are buying and selling.
The fact that a seller is willing to subject the contract of sale to the requirements of an Equestes contract and Equestes examination form will inspire a degree of trust in the transaction on the part of the buyer. All sellers should actually provide this type of disclosure; it would certainly place the horse trade in a better light. And this is a goal we should all work to achieve. It is, at any rate, Equestes’ goal.
You may find further information on Equestes on the website www.equestes.com. The full text of the Code of Conduct is also published on the website, and the types of services Equestes provides.
 Mr L.M. Schelstraete, Attorney at Law, European Equine Lawyers Equestes B.V., Tilburg, The Netherlands.