Arbitration in party wall matters
Whilst, as I have mentioned previously, resolution of disputes under section 10 are not arbitrations, nor even statutory arbitrations under the Arbitration Act 1996 - see, for example, the judgment in Lea Valley Developments Ltd v Derbyshire - that does not mean that arbitration has no part to play in relation to party wall disputes. Let me briefly tell you what arbitration is, and explain the potential benefits.
Arbitration can be described as a contractual and binding form of dispute resolution which, like the Party Wall etc. Act 1996 ("the Act"), operates outside the Court system. The parties to a dispute must agree to resolution of their dispute by an arbitrator, who is independent of the parties, and who produces a decision in writing - an award - which determines that dispute. The award is binding upon the parties, and can be enforced via the courts if necessary. Although an award can be appealed on a point of law, arbitration decisions are notoriously difficult to overturn, and therefore have a refreshing finality about them.
There are two main advantages of arbitration over court proceedings.
First, arbitrations can be dealt with quickly. Those of you who have been involved in litigation in England and Wales will know that it takes an average of 12-18 months to take a case from issue to determination. An arbitration can be dealt with, start to finish, in a fortnight, sometimes even sooner, albeit the timetable can always be adapted to suit the parties' requirements.
Secondly, arbitrations can be made as simple or sophisticated as the parties require, depending on how much the parties are willing and able to spend on the exercise. Arbitrations can range from a simple paper-based process, with each party submitting relevant documents and submissions for consideration, to a full-blown quasi-trial, with witnesses being called and cross-examined, and extensive written and oral submissions.
How then can arbitrations assist in party wall matters?
Appealing awards can be a very expensive business - I have written about the financial risks of such a step in this previous article. I generally advise clients to issue an appeal against the award they wish to challenge and, on the Appellant's notice, ask for a stay for a period of six weeks or so, to allow the parties to seek to resolve their differences other than via the court process. That period can be used for without prejudice negotiations, or for mediation - both of which are fine choices - but could equally be used to determine the dispute (whether merely the issues in the appeal, or, if the parties choose, wider issues), by arbitration.
This may be thought particularly attractive, and to both parties, where the appeal is based on a legal or procedural point, which does not require reams of fresh evidence. An arbitrator, who the parties can choose - for example, a retired judge, or a QC specialist in the area - can be appointed by the parties to read the relevant documents and produce a written and binding decision based upon something as simple as a copy of the relevant award and the grounds of appeal. Even assuming that the correspondence and submissions which informed the original award are required, an arbitrator should be able to produce a written decision/award within a matter of days and, dare I say it, quite possibly for a cost less than the cost of the award being challenged.
Of course, if the parties want to rely on fresh evidence, the process will become more expensive, but if a building owner is keen to get on with works, or an adjoining owner is keen to know what level of compensation they will receive to enable them to schedule repair works, the speed of the process will still potentially be very attractive.
Although not strictly arbitration, I can also suggest an inventive way of obtaining awards in relation to dispute of a legal nature under section 10. If a third surveyor has already been selected who is not suitably legally knowledgeable, the parties' surveyors can ask that third surveyor to declare himself incapable of acting, and a lawyer or retired judge can be selected in their place, on the basis that they will determine a specific legal dispute between the parties, and then declare themselves incapable of acting thereafter (to the extent that they are not already functus officio). The original or an entirely different third surveyor can thereafter be selected for any more surveyor-appropriate disputes which might follow. Alternatively, and arguably more simply, the original third surveyor can obtain the advice of suitably experienced counsel, acting as an amicus curiae to the third surveyor.
Readers may be unsurprised to hear that I am willing to act in any of these legal roles, or to recommend or arrange for other suitably qualified and experienced lawyers or retired judges to do so.
Barrister at 39 Essex Chambers
5 年Nick, I entirely agree with your sensible and practical approach. ?Kerry
Owner, steve campbell associates
5 年Nick, There is of course a third advantage of Arbitration over litigation, and that is the advantage of privacy, no interested members of the public can simply attend an Arbitration hearing, nor is the decision made public unless an appeal is allowed and heard. You are of course forgetting another class of people who would accept office in this role and that is trained and qualified Arbitrators who are also rather experienced and knowledgable in matters of the Party wall process and law. I do feel that lay people in particular ought not to be persuaded to use a contractual ADR method with very limited rights of appeal when there is a very comprahensive self contained scheme by way of the Statute available to them which can also be concluded swiftly and cost effectively. Finally, your post I feel does amplify the need for appointed surveyors to select their third surveyor carefully, and select someone who is capable of resolving the matter in the first instance without having to seek an alternative method of resolution, but who can of course seek consel oppinion if he felt it necessary. Good article though and refreshingly not a waft of self promotion. Thank you
Director, Chartered Building Surveyor and RICS Registered Valuer - Adrian J Singleton Limited
5 年Nick, As ever, a view that is very well expressed on how to make use of the Arbitration Act properly within the confines of a party wall dispute. I am less pessimistic than Andrew Thompson on these points being absorbed by anyone reading your article, but it is, of course, the issue of taking a horse to water and watching it drink!? However, I applaud his comments and suggestions that a draft form of ADR is prepared.? There is a Boundary Protocol produced by other Chambers that is fast gaining traction and is it not the time for a similar Party Wall and Adjacent Excavations Protocol to be developed?? Perhaps Tanfield Chambers can take the lead on this? I have a longstanding distrust of the PWA's approach to the giving of notice so much later than when other public notices such as applications for planning consent appear, as this has created a whole industry of dubious pre-dispute "appointments" and the AOS badgering the BO with threats of great expense, etc.? The aim apparently to become the AgS and avoid the need for scrutiny as an often pointless award is served on naive owners who don't actually have any de facto dispute.? You are also aware of my identification of the apparent anomaly in section 10 that appears to circumvent the exact wording of paragraph 10 - in which authority to make an award is stated to lie either with an agreed surveyor or any two of the three surveyors whereas in the event of neglect or refusal to act by one of the appointed surveyors the other can go it alone without involving the selected (third) surveyor.? This seems to deny the parties the use of a quasi-arbitration by the impartial 3S when one of the surveyors is in a hurry and the other one is tardy or reticent.? I seriously doubt that the Courts have properly tested that last argument, which might be a basis for bringing an appeal in the first instance to an ex-parte award.? The argument might run thus - that the appointed surveyor acting as the "agreed surveyor" did not extend the opportunity for the 3S to assist in making the award as a substitute for the absent surveyor and had he done so, the terms of the award might read differently and in consequence, the appellant has been denied justice at reasonable cost and efficient as provided for by the mechanism as set out in section 10.
Risk and Compliance Director of MJP Conveyancing
5 年Nick. Thank you for sharing. Your idea of appointing a lawyer in place of a Third Surveyor is interesting. The problem is I am not sure there would be many TPS willing to stand down and forgo an opportunity to charge a fee. Nor will you find many who would be willing to admit that they are out of their depth. Clearly on legal issues I would prefer to see the issue dealt with by a lawyer. I am not sure this view is widely shared in the surveying community. David.