The failure of the ‘agreed surveyor’ appointment

‘It was the government’s intention that an agreed surveyor should be used whenever possible.’ (Frame 2010).

The resolution of a dispute under the Party Wall Act requires the parties to the dispute to appoint a surveyor and this can be either an ‘agreed surveyor’ or each party can appoint his own surveyor. The uptake of agreed surveyors is relatively low, and it is surely a failure of the effectiveness of the Act that such appointments are not more common. In the end, regardless of whether one surveyor is appointed or two surveyors are appointed, an Award is served upon the parties to the dispute. Having two surveyors agree an Award can be excessive and burdensome, particularly for the building owner who ordinarily foots the bill.

Section 20 of the Act defines a surveyor:

“surveyor” means any person not being a party to the matter appointed or selected under section 10 to determine disputes in accordance with the procedures set out in this Act.

On 31st January 1996 Lord Lytton, in introducing the Party Wall Act Bill to the House of Lords stated:

'Clause 10 deals with the resolution of disputes. In this particular instance both parties can agree on the appointment of one surveyor. That is a step to be recommended most strongly, particularly for householders carrying out small works.'

Lord Lytton’s intentions are clear, in that he expected the widespread uptake of the agreed surveyor, to settle disputes.

An agreed surveyor is referred to in section 10(1)(a) of the act:

Section 10 (1) Where a dispute arises or is deemed to have arisen between a building owner and an adjoining owner in respect of any matter connected with any work to which this Act relates either — (a) both parties shall concur in the appointment of one surveyor (in this section referred to as an “agreed surveyor”);

Alternatively, if both parties cannot concur in the appointment of one surveyor, each party shall appoint a surveyor as per section 10(1)(b): each party shall appoint a surveyor and the two surveyors so appointed shall forthwith select a third surveyor (all of whom are in this section referred to as “the three surveyors”).

The adjoining owner therefore has options with regards to appointing a surveyor. Whilst the parties can concur in the appointment of a single surveyor ‘this is unusual and normally the next subsection is followed’ (Bickford-Smith et Al 2017). ‘Far more common is the three-surveyor tribunal provided for under section 10(1)(b)’ (Isaac 2014).

The reason why the adjoining owner often does not concur in the appointment of one surveyor to resolve the dispute often comes down to trust and the perception of impartiality, or lack thereof. There can be a misguided belief that there is a conflict of interest and they view such an appointment ‘with suspicion, wrongly believing that the agreed surveyor will not protect their interest and rights under the Act’ (Antino 2012). Interestingly, it is the agreed surveyor who is actually required to retain the highest degree of impartiality, and this is in contrary to the obligations of a party-appointed surveyor under Section 10(1)(b):

‘party-appointed surveyors are primarily responsible to their own appointing owners. Unlike the agreed surveyor and the third surveyor they do not therefore appear, as individuals, to be subject to an obligation to act impartially between the parties’ (Chynoweth 2001).

It should be noted, in theory at least, that the agreed surveyor has a greater responsibility to act impartially than a surveyor who is appointed under Section 10(1)(b). This is because the responsibility of the agreed surveyor is greater, in that he is acting on behalf of both parties. It can be understandable why in some cases, an adjoining owner does not wish to concur in the appointment of one surveyor. An example of this could be where the surveyor is the building owner’s architect, and whilst the Act allows such an appointment and many architects administer the Act competently, there can be a perceived conflict of interest in the sense that the Architect may be motivated to enable the work to the detriment of the adjoining owner. The Act therefore protects the adjoining owner in this respect, allowing him to appoint a surveyor of his choosing to act on his behalf.

Being able to choose a surveyor is a right that the adjoining owner can exercise. The building owner is expected to pay, and this gives rise to two very interesting points.

1.     Is the building owner really liable for the adjoining owner’s surveyor’s fees?

In the fairly recent case of Amir-Siddique v Kowaliw (2018) an adjoining owner dissented to a party structure notice and appointed his own surveyor. He then refused to allow his surveyor to act as the agreed surveyor. The Judge agreed that he was within his rights to refuse, but not on the basis that the building owner had to pay the additional costs associated with having two surveyors.

Judge Bailey stated ‘in light of the fact that the unreasonable behaviour of the adjoining owner has caused the building owner to incur the wholly unnecessary cost of the building owner’s surveyor’s fee, I consider that it is just to allow the appeal so that the adjoining owner is liable to pay the building owner’s surveyor’s fee’.

This case however, has done little to change the landscape of party wall surveying, and the status quo currently remains, where the building owner is simply expected to settle all surveyor’s fees.

2.     Are surveyors financially incentivised to encourage the three surveyor-tribunal?

When an adjoining owner appoints his own surveyor, the standard course of action is to proceed by the three-surveyor tribunal. Often, a building owner surveyor is appointed prior to a dispute arising (or being deemed). There is no need for a building owner to appoint a surveyor so quickly. A surveyor is only appointed once there is a dispute. Further, a surveyor can downplay the agreed surveyor option because, if the building owner goes with the adjoining owner’s surveyor, the building owner’s surveyor will lose his fee. There is a significant financial incentive to downplay the possibility of the agreed surveyor option. Collectively the industry benefits from a three-surveyor tribunal as this can allow three different surveyors to earn money (though the third surveyor only gets a fee when called upon).

Is it any wonder that there is a lack of uptake in agreed surveyor appointments?

Those who administer the Act stand to lose if the intention of Lord Lytton is realised.

It should be remembered that appointments cannot be rescinded, and there is the loss of a tribunal if the parties proceed by way of a single surveyor. The parties lose the advantage of having the safety net of a third surveyor, and they have nowhere to go if they are unhappy with the agreed surveyor’s conduct. The Act does provide some safety mechanisms for the parties to the dispute, for example, section 10(3)(a) allows the proceedings for settling the dispute to begin de novo if the surveyor refuses to act. Unfortunately, knowledge of the Act is required to understand these rights, and the parties to the dispute may not know that these rights exist. An agreed surveyor may also not wish to impart knowledge that can be used to bypass him.

It is perhaps a failure of the Act that agreed surveyors are not more widely used. The Act intended that such an appointment would be encouraged, however there is clearly a lack of incentive to proceed on this basis, and this, combined with a lack of trust by the general public, serve to ensure that this aspect of the Act is not working as effectively as had been intended. By way of an improvement, an amendment to the Act can be put in place whereby if an agreed surveyor is appointed, the two parties can also agree upon a reserve surveyor who in certain circumstances can intervene in a way that avoids the process beginning de novo. This could encourage the uptake of agreed surveyor appointments and provide a safety net in the event that an agreed surveyor is acting improperly. It may also ensure that the agreed surveyor acts to a higher standard, if there is the prospect of his replacement.

The appointment of an agreed surveyor is not always appropriate, and there are some pitfalls by proceeding in this manner. However, party wall surveyors and professional bodies must do more to ensure that the public are informed of the nature of the agreed surveyor appointment. Uptake needs to be increased, though the very professionals and their bodies who should be promoting it stand to lose financially, should they manage to promote the agreed surveyor appointment successfully. Therein lies the problem.

References:

Antino, P. (2012) A Practitioner’s Approach and Interpretation of The Party Wall etc. Act 1996. USA: Xlibris publishing.

Bickford-Smith, S., Nicholls, D., and Smith, A., (2017) Party Walls Law and Practice (4th edn), Bristol: LexisNexis

Chynoweth, P. (2001) Impartiality in the Party Wall Surveyor 17 Const. L.J. No.2 Copyright Sweet & Maxwell Limited and contributors.

Frame, A. (2010) The Third Surveyor. Rye: Faculty of Party Wall Surveyors

Isaac, N. (2014) The Law and Practice of Party Walls. Moseley: Property Publishing.