avoiding calamity... mediating neighbour disputes

Lord Justice Mummery’s recent judgment in Bradford -v- James [2008] EWCA Civ 837 could not have been more encouraging of the use of mediation in neighbour disputes and rightly so.

Giving judgment in the Court of Appeal, he gave strong guidance that should resonate across the practice of neighbour dispute resolution and beyond:

“There are too many calamitous neighbour disputes in the courts”.

“An attempt at mediation should be made right at the beginning of the dispute and certainly well before things turn nasty and become expensive”.

“Litigation hardens attitudes. Costs become an additional aggravating issue. Almost by its own momentum the case that cried out for compromise moves onwards and upwards to a conclusion that is disastrous for one of the parties, possibly for both”.

The Civil Procedure Rules provide that, where appropriate, courts should actively encourage alternative dispute resolution through ‘active case management’. Case law has built on this. Not least Halsey -v- Milton Keynes NHS Trust [2004] EWCA Civ 576 and later Burchell -v- Bullard and Others [2005] EWCA Civ 358 where Lord Justice Ward warned that “the profession can no longer with impunity shrug aside reasonable requests to mediate”.

Practitioners should be mindful, before allowing clients to reject mediation out-of-hand, that adverse costs orders may be made against parties who unreasonably refuse to mediate and costs may not be fully recovered even by successful parties to litigation where this is the case. The costs risks are all the greater where the court has made an order that the parties consider alternative forms of dispute resolution.

It is all too easy for those personally involved in a dispute to lose perspective and objectivity. This can often lead to the haemorrhaging of legal costs. Parties to a dispute and their advisers should be focused on settling matters in a way acceptable to both sides and without expending disproportionate sums of money in legal costs. Mediation can be a keystone in meeting these objectives.

Putting the case for mediation, the author shares experiences of neighbour disputes at trial, a recent successful mediation as a case in point and some mediation lessons learned.

disputes at trial

Naturally, some cases do go to trial; if either party is unwilling to engage in mediation, if it proves inappropriate as an alternative dispute resolution tool, or, following its failure to resolve the issues. Rarely in these disputes does either side achieve an outright victory. Further, having gone the distance of a full trial, costs will be substantial on both sides and costs risks can be high. The pressures and stresses of litigation on the individuals involved and the time it takes to reach trial can also be personally very exacting.

Ultimately, unless your clients or their neighbours are prepared to move home following the litigation, they remain living next-door to their opponent; a situation hardly conducive to harmony. In the worst cases, otherwise uninvolved neighbours may side with the parties, dividing the neighbourhood at large.

case in point: a recent successful mediation

This dispute had been running for almost six years and concerned a right of way. Attempts to resolve matters through correspondence and a round-table meeting proved unsuccessful and hostility between the parties was unabated. Court proceedings were commenced but mediation was still encouraged and accepted by both parties, resulting in a stay.

The mediation was a success. It lasted all day and went well into the evening. At around midnight a mutually acceptable settlement was achieved. The consent order was drafted there and then and the parties left feeling involved in the process and with a neighbourly relationship preserved. Further, both sides saved substantial amounts of costs in what was otherwise likely to be protracted litigation.

mediation lessons learned

The key points in the author’s experience mainly relate to the period concluding the mediation. One disadvantage of mediation is that no judgment is given at the end of the day finalising matters. At its conclusion, parties can feel such a sense of relief at the resolution of the dispute that dotting ‘i’s and crossing ‘t’s can seem a mere formality; this is not the case. Mediation is without prejudice and not binding until a settlement agreement has been signed by the parties. In cases where the parties feel the lateness of the hour is such that it would be better to draw up the agreement the next day or later, the practitioner should beware. It is advisable to draw up the agreement and have it signed there and then. The risks of not doing so are that the next day, either party may wish to incorporate another factor into settlement or renege entirely on the agreement.

However, do ensure that the drafting is right, particularly when drafting late into the evening. The author is aware of at least one case (unrelated to the case above) where drafting of a mediated agreement omitted to include a vital right of way, leading to court proceedings over that one issue after an otherwise successful mediation.

In conclusion, there can be no doubt that mediation as a form of alternative dispute resolution can be extremely effective and can really deliver to clients. Many of these points have been touched on already. Not least, they may include:

• working constructively with neighbours to resolve disputes, reducing future neighbourhood acrimony
• minimising legal costs
• potential costs protection should the matter go to trial
• the chance to resolve disputes more innovatively than a judge would have the power to order. Examples include donations to charity and apologies; and ultimately
• clients feeling more involved in active negotiation and settlement, retaining some objectivity and more control in a less adversarial process.

For further information, please contact Amanda Morris, a partner in Blake Lapthorn's Real Estate Dispute Resolution team and co-author of Neighbour Disputes: A Concise Guide to the Law and Practice, Callow Publishing 2006.