Congrats on getting yourselves out of that one.
I'm only a low time pilot, but on the few times I have flown with another pilot, the dual controls are always in, and I have had an explicit conversation before getting in the helicopter about who does what in an emergency.
e.g we would agree that if he's an instructor, and says 'I have control' at any time in an emergency or otherwise (short of him being obviously mad), I let go, do radio, configure switches if necessary; if the other pilot is the same hours as me, the pilot currently flying handles the controls, pnf does radio, switches. Also covers the single dissenting voice on any situation or manoeuver.
These things need to be agreed in advance! Finally, as pilot flying and in particular after reading what has happened here, I would now consider myself negligent in not fitting the dual controls where the passenger was a pilot, simply on safety grounds unless there's an obvious reason not to fit them.
BW