Ignore mediation at your peril.

With property disputes, emotions can run high. As my father, who was an architect turned property developer, often used to say, “It’s not the bricks and mortar that’s the problem, it’s the people!” A property dispute may have arisen because of an inheritance, a relationship break-up, a spat with a neighbour or a heated meeting onsite between contractors. They are often interwoven with family business disputes, if nothing else because there is likely to be business premises/a small holding/a manufacturing plant at stake as well. Behind every property dispute there is a human story and unpicking that is often the key to finding a solution. 

That’s where mediation – a negotiation between parties outside of court of arbitration facilitated by an independent third-party neutral – can be highly effective. A mediator will listen to the dispute and help each party to see the other’s point of view. Sometimes an apology early on in a mediation from one party to the other can unlock new ways of thinking. Since the mediation is confidential and without prejudice to any court proceedings, the apology does not bear the incumbent risk of being an admission of liability if it were to be made in open correspondence. 

Sounds good? What’s not to like, especially when settlement rates are around 90% (https://www.cedr.com/the-ninth-mediation-audit-five-things-you-need-to-know/). Mediation is ideal for property, landlord and tenant, construction, TOLATA ⁽legislation.gov.uk/ukpga/1996/47/contents) and boundary disputes – in other words, all things property. Why? Because the best solution may be a practical commercial one and something that a court could not order. For example, it is possible at a mediation to agree land swaps, giving up of ransom strips, altering rights of way, agree renovations, amend leases, a revised schedule of works – the list is frankly as wide as the imagination of the parties. A court may usually only order damages or rarely an injunction (costly too). I have even successfully mediated riparian rights on the Norfolk Broads that have involved deals about dredging obligations.

Another thing about property disputes is that they often involve more than two parties. They could be the developer, architect and contractor or landlord, tenant and insurer. Sometimes construction has been brought to a halt pending resolution of the dispute. This can incur inordinate delay, cost, frustration and stress to everyone. Multi-party legal proceedings can be particularly costly and protracted – whereas mediation is quick to set up, cost effective and can be done in a day (often less).

The courts and arbitration panels are very much in favour of mediation. There has been a spate of cases where parties who have unreasonably refused to mediate have been sanctioned later after trial by not receiving their costs back from the other party to the extent they usually would. Indeed, the Court of Appeal refused a tenant’s application to recover their legal costs (casecheck.co.uk/pgf-ii-sa-v-omfs-company-1-ltd-2013-ewca-civ-1288-23-10-13.html) where they did not respond to the landlord’s request for a mediation early on, notwithstanding the fact that the tenant’s subsequent offer to settle was accepted by the landlord. Here, the court said the tenant had unnecessarily wasted everyone’s time at an early stage by not mediating when invited. The court made this order, making an example of the tenant’s behaviour “pour encourager les autres” to mediate. 

Note the word ‘unreasonably’ refused to mediate. The courts have generally found excuses as to why parties have not mediated to be unreasonable. For example, saying you believe you have a strong case and are likely to win at court is unlikely to cut the mustard. Further, the courts have even held that a failure to respond to an invitation to mediate within two weeks constitutes an unreasonable refusal to mediate, so you might want to keep an eye on your inbox!

Because the mediation process is informal and flexible, the choice as to whether a party wants to be legally represented at the mediation rests with them. It is often a good idea to have a lawyer on board to discuss the case in law, look at the available options and have a helping hand with the negotiation. Having a solicitor and/or barrister is also very handy towards the end, when hopefully a settlement agreement is drawn up to be signed by the parties. Indeed, that is the aim of a mediation – to reach and sign a legally binding document.

Mediation may not always be the right course of action. If one party is looking to establish a precedent, such as how a specific clause in, say, their standard contract is to be interpreted, they may prefer to have a court decision they can rely on vis-à-vis others. Or perhaps to determine if a particular act constitutes a nuisance, for example. But these instances are rare and there’s a high price to pay (financially, time wise and emotionally) in going all the way to trial.

I’m often asked if disputing parties have to meet at a mediation. The answer is not necessarily and often they won’t. If they are willing, that’s a good thing and to be encouraged. But if people prefer to communicate entirely via the mediator that’s also fine and works well. Many people turned to Zoom for their mediations during lockdown and the trend for online mediations continues. This means disputes can be sorted out from the comfort of your desk or home without having to go to a city, especially if you are based in a rural location. It helps you and your carbon footprint too.

Indeed, I had one mediation that turned on how many cars could be parked outside a property. I realised the property was only a few miles from where I lived, so I arranged a short follow-up mediation session ‘on site’ that was attended by one party in person and the other remotely on my laptop. I was relieved I was not, as mediator, asked to manoeuvre cars and I was able to remain entirely neutral as keeper of the camera and the tape measure.