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Mediation in Land Law

James Naylor

Content
1. What is mediation and how does it
work?
2. What is the Courts approach to
mediation?
3. How
does
mediation
work
specifically in relation to land law?

What is mediation
and how does it work?
Mediation is a flexible, voluntary and
confidential form of alternative
dispute resolution (ADR), in which a
neutral third party assists parties to
work
towards
a
negotiated
settlement of their dispute, with the
parties retaining control of the
decision on whether or not to settle
and on what terms.

What happens at a typical


mediation?
The mediator usually has discussions with the parties in
advance of the mediation to identify the key issues.
Usually, the mediator will formally open the mediation with a
joint session, attended by all parties and their lawyers.
During this session, he provides an overview of the process,
his role and the procedure.
Each party then has an opportunity to make an opening
statement, giving its perspective on the dispute and
highlighting points of particular concern. After the opening,
the mediator will have private discussions with each party to
assist in the negotiating process.
Ultimately, this may result in the parties reaching a
settlement that is either documented at the mediation or
shortly thereafter.

Benefits
Communication problems / deadlock problems between the parties
can be overcome.
The legal costs, lost opportunity costs and management time can be
reduced.
Mediation can produce outcomes that might not be possible via
determination by the court.
Mediation can provide a speedier resolution.
Mediation has a high success rate and produces durable results.
Even if a mediation does not result in settlement, the parties are
likely to have benefited from the process by:
having the opportunity to listen to each other's points of view and
perspectives;
narrowing the issues in dispute; and
testing with the mediator the strengths and weaknesses of the
case, and the strategies adopted or considered, in the run up to
trial.

Disadvantages
If unsuccessful, mediation will add
time and cost to the process of
resolving the dispute.
There is a fear that mediation will
expose the client's hand or strategy.
Parties who consider that they have a
strong case, may feel that this is not
adequately recognised through the
mediation process.

What is the Courts approach to mediation

Mediation and costs


What is the usual costs rule in
litigation?

The loser pays the winners costs.

Halsey v Milton Keynes General Trust [2004] EWCA Civ 576

This case involves a claim brought by Lilian Halsey against the NHS
Trust after her husband who was being fed through a nasal drip died
due to liquid food entering his lungs. The results of the inquest were
inconclusive as two medical experts disagreed about responsibility.
Mrs Halsey's solicitors claimed for bereavement damages but their
offer to mediate to settle was rejected as the Trust stated that they
did not accept any liability. At trial the claim was dismissed and the
Trust won their case. However, Mrs Halsey's solicitors asked for costs
to be awarded as the Trust had refused to mediate.
The original trial judge refused to award costs against the successful
defendant and the case was taken to the Court of Appeal.
The appeal judges concluded that the original judgement was correct
as the Claimant "had come nowhere near showing that the Trust
acted unreasonably in refusing to agree to a mediation".

Halsey

Dyson LJ identified the following as determining whether a


party acted unreasonably in refusing to mediate: The nature of the dispute. The court accepted that
mediation is not appropriate in all cases. However, most
cases are not by their very nature unsuitable for
mediation;
The merits of the case. If a party reasonably believes he
has a strong case he may act reasonably in refusing
mediation;
Other settlement options.
Costs of mediation. E.g. where the sums at stake in the
litigation are comparatively small and the costs of
mediation disproportionately high;
Delay. E.g. if mediation is suggested close to trial and
acceptance would delay the trial;
Prospects of success. Would the mediation would have
been successful?

Halsey
So, following Halsey, if the suggestion to
mediate is rejected out of hand, without any
consideration of the mediation option, cost
sanctions are likely.
If the suggestion is considered, but
rejected, a thorough explanation of the
reasons for rejection must be given,
although there will still be a risk of cost
sanctions if the refusal is considered to be
unreasonable.

Painting v University of Oxford


[2005] EWCA Civ 161
The claimant had made no attempts to
negotiate, made no offers to settle and failed
to respond to offers made by the defendant.
Costs sanction?
Longmore LJ: "Negotiation is supposed to be
a two-way street, and a claimant who makes
no attempt to negotiate can expect, and
should expect, the courts to take that into
account when making the appropriate order
as to costs."

Yorkshire Bank Plc and Clydesdale Bank Asset


Finance Ltd v RDM Asset Finance and J B
Coach Sales
(Mercantile Court, Leeds Registry, 30 June
2004, LTL 16/09/04)

It was an "all or nothing" case and,


accordingly, it was argued, mediation would
have no reasonable prospect of success.
Costs sanction?
Yes. The court disagreed. It took the view
that a skilled mediator could have helped
the parties, who were considered reasonable
businessmen, to negotiate an outcome.
The court allowed the claimant an additional
15% of its costs

McMillan Williams (a firm) v


Range [2004] EWCA Civ 294
When granting leave to appeal, Tuckey LJ noted that the costs of further
litigation would be disproportionate, and strongly recommended ADR.
Instead, the parties launched into argumentative correspondence. Two
days before the mediation, the appellant decided not to go ahead, on the
basis that it was clear that the mediation would not be successful due to
the unwillingness of the either party to change its position.
Costs sanction?
Yes. Ward LJ observed that he did not intend to review the "tedious
correspondence". Whilst accepting that negotiating positions will be taken
prior to, and during, mediation he condemned the "posturing and
jockeying for position" by each side and directed that each party should
bear its own costs. He identified as a lesson to be learned the fact that
"the true bottom line is never known until the mediation is concluded,
usually successfully.
Longstaff International v Evans and others [2005] EWHC 4 (Ch) The court considered that both parties had behaved badly, and unduly
aggressively, so that neither party was awarded costs.

Burchell v Bullard & Others


[2005] EWCA Civ 358
This was a small property dispute. An offer of mediation was made
before the issue of proceedings.
The defendants believed that their case was so watertight that
they need not engage in attempts to settle notwithstanding that
the cost of mediating was small ("a drop in the ocean" the court
said) when compared to the cost of litigation in a case of this kind.
Costs sanction?
Yes. The court confirmed that an unreasonable refusal to mediate
will be relevant to the issue of costs.
Ward LJ cautioned: "The court has given it stamp of approval to
mediation and it is now the legal profession which must become
fully aware of and acknowledge its value. The profession can no
longer with impunity shrug aside reasonable requests to mediate."

Rolf v De Guerin [2011] EWCA


Civ 78
This was a small property dispute and
there were countless spurned offers to
enter into settlement negotiations or
mediation.
Rix LJ described it as "a sad case about
lost opportunities for mediation". He also
said it demonstrated how, in certain
disputes, litigation can be "wasteful and
destructive" and a trial should be
regarded as a solution of last resort.

Garritt-Critchley and others v Ronnan


and another [2014] EWHC 1774
The defendants consistently refused to mediate due to
confidence in their position and a belief that the parties
were too far apart. This was a dispute that involved a
question of fact.
Did the fact that the defendants had responded to
mediation offers and given reasons why they did
not wish to mediate make a difference?
The court held that the claim was a classic case for
mediation and noted that parties do not know whether
they are too far apart to mediate, until they sit down and
explore settlement.
Therefore, the fact that they responded promptly each
time a letter was written was neither here nor there.

Northrop Grumman Mission Systems


Europe Ltd v BAE Systems (Al Diriyah
C4I) Ltd (No 2) [2014] EWHC 3148 (TCC)
(03 October 2014)

BAE made an offer that was rejected but did not


better at trial.
BAE believed its case to be strong and would not
mediate.
Costs sanction?
No because BAE reasonably believed in the
merits of the case and had made an offer.
Therefore, neither party should be penalised in
costs and therefore the usual costs rule applied,
so that the losing party was required to pay
BAE's costs.

Re Midland Linen Services Ltd


[2005] EWHC 3380 (Ch)
The claimant's rejection of the defendant's offer
to mediate was on the basis that they considered
that it was a delaying tactic. The Court agreed.
Further, there had been repeated disputes over
the appointment of independent experts.
Costs sanction?
No - the defendants approach in negotiation was
inconsistent and uncertain, they had a history of
making and withdrawing offers.

Allen v Jones [2004] EWHC 1189


(QB)
This concerned a dispute over a right of way and
there were strong merits of the defendants
case.
Costs sanction?
No. The court noted:
"It is most unlikely that mediation would have
achieved an outcome for the [defendant] as
good as [the] judgment did".
The court seemed reluctant to require
compromise in circumstances where a legal
solution could provide greater justice to a party.

Mason and others v Mills & Reeve


(A Firm) [2012] EWCA Civ 498
The parties had been "a hundred
miles apart" at all stages.
A party refused to mediate and
steadfastly maintained that position.
Costs sanction?
No - a refusal to mediate does not
become unreasonable simply by
virtue of being steadfastly maintained.

ADS Aerospace Ltd v Global


Tracking [2012] EWHC 2904 (TCC)
In this case, the mediation suggestion came from the
Claimant just before the double bank holiday Jubilee
weekend and with less than 20 working days before the
trial, when great efforts were being made to prepare for the
trial.
Costs sanction?
Yes without prejudice discussions would have been
quicker, cheaper and less intrusive into trial preparation
than a mediation which, even if it lasted only a day in itself,
would have diverted solicitors and counsel by more than
one day because they would have had to prepare for the
mediation. Mediation would also have cost substantially
more than without prejudice discussions, which was not
immaterial in the light of the Claimant's impecuniosity."

PGF II SA v OMFS Company 1


Ltd [2013] EWCA Civ 1288 (23
October 2013)

What should the Courts response be to a party who failed to


respond to an invitation to mediate?
The judge's decision to impose a costs sanction for the unreasonable
failure to mediate was upheld.
The court held that, as a general rule, silence in the face of an invitation
to participate in mediation was unreasonable. This was described as a
"modest" extension of the Halsey principle.
Briggs LJ concluded with the message that: "The court's task in
encouraging the more proportionate conduct of civil litigation is so
important in current economic circumstances that it is appropriate to
emphasise that message by a sanction which, even if a little more
vigorous than I would have preferred, nonetheless operates pour
encourager les autres."

The Wethered Estate Ltd v Davis


and others [2005] EWHC 1903 (Ch)
This was a peculiar case involving controversy over the factual
matrix. The claimants had refused the defendants' suggestion of
mediation before the issue of proceedings on the basis that they
considered that the issues needed to be clearer. They suggested
that this was best done via the issue of proceedings. The
defendant argued that the claimant should be deprived of part of
its costs due to its delay in agreeing to mediate.
Was a desire to see the allegations set out in pleadings
and witness statements a reasonable basis for deferring
mediation?
Yes it was reasonable for the claimant to believe that mediation
would be more likely to succeed once the matter had been
formulated.

Murray and another v Bernard


[2015] EWHC 2395 (Ch)
A party initially refused to mediate and then
changed its mind.
Costs sanction?
The judge held that this was not a case in which it
could be said that the claimants failed to mediate.
They did not have one opportunity only to mediate
for the purpose of the costs rule. A party may be
penalised for a wrongful refusal to mediate because
parties are not to be encouraged to refuse
opportunities to settle cases. However, in this case,
the claimants changed their minds and therefore
they could not be criticised for refusing to mediate.

Jarrom and Shepherd v Sellars


[2007] EWHC 1366 (Ch)
The defendant requested several times during the course of
proceedings, that the claimants consider entering discussions
with a view to settling the claim. The claimants declined to do
so.
The defendant lost.
Who should pay the costs?
The court declined to make the usual costs order that the
unsuccessful party pay the successful party's costs and held
that there be no order as to costs.
The judge commented that while costs would have
undoubtedly been incurred in attending a meeting: "as
everybody who has anything to do with litigation knows, the
costs of litigation very rapidly exceed the costs of one, two or
even several meetings to resolve matters".

Leicester Circuits Ltd v Coates


Brothers Plc [2003] EWCA Civ 333
The defendant withdrew from a mediation the day before it
was due to take place because it had no real prospect of
success.
Was that unreasonable?
Yes - the court considered that: "having agreed to mediation,
it hardly lies in the mouths of those who agree to it to assert
that there was no realistic prospect of success."
Whilst not assuming that mediation would have been
successful, the court rejected the suggestion that Coates'
decision
to
withdraw
from
the
process
was
an
acknowledgement of the fact that it had agreed to something
that was pointless. The court considered that there might
have been a prospect of settlement if the mediation had taken
place.

Earl of Malmesbury v Strutt and Parker and


others
[2008] EWHC 424 (QB)
The claimants' position at the mediation was plainly
unrealistic and unreasonable: the lowest settlement
figure put forward by the defendants was 267,000
whilst the highest put forward by the claimants was
about 5.3 million.
Does agreeing to a mediation, but then adopting
an unreasonable stance during the mediation,
mean a penalty in costs?
This is something the court can, and should, take
account of in the costs order. The claimant's stance was
unrealistic and unreasonable, and led to the judge
imposing a 20% reduction of the costs recoverable in
relation to the hearing on damages.

How does mediation work


specifically in relation to land law?

Boundary disputes why are they


the worst form of litigation?

Boundary disputes often have little or no financial interest for either party,
yet interests in land can become entrenched very quickly leading to timeconsuming, expensive and life-changing conflict.
Human nature such as intransigence, aggressively territorial behaviour,
and an unwillingness to compromise, perhaps derived from other incidents,
together with the potential for dishonest and manipulative behaviour
aimed at securing an advantage.
A failure in some cases by courts12 and solicitors to focus the parties
minds as early as possible on the need carefully to consider the costs and
benefits of pursuing litigation.
The adversarial nature of litigation, and a tendency of some solicitors to
discourage compromise.
The high cost of litigation favouring those with deeper pockets.
Difficulties in securing the co-operation necessary to make mediation
effective, and in relation to making the conclusions reached by these
means binding and enforceable.
Inherent difficulties involved in determining legal boundaries arising from
inadequate or inaccurate documentation and the fact that many title plans,
including the Land Registry title plan, only define general boundaries and
not precise legal ones (leading to confusion and misunderstandings by
parties to disputes).

Boundary disputes
One dispute in Hertfordshire began when planners used a thick pen to mark out
boundaries. The area was just 60 cm wide, yet the legal costs run to 400,000.
In Cheltenham, neighbours spent two years fighting over a 6m patch of land.
Two neighbours spent 500,000 in a dispute over the ownership of a thin strip of a
drainage ditch. It was described as Dickensian litigation by Lord Justice Bean who
also ruled: At a time when courts are under great pressure, the battle between
these two couples took up 10 days of court time - more than some murder trials.
Norris J in Bradley v Heslin [2014] EWHC 3267 (Ch), highlighted his thoughts on the
negative financial and community cost of a neighbour dispute going all the way to
trial: I think it is no longer enough to leave the parties the opportunity to mediate and to
warn of costs consequences if the opportunity is not taken. In boundary and
neighbour disputes the opportunities are not being taken and the warnings are not
being heeded, and those embroiled in them need saving from themselves. The
Court cannot oblige truly unwilling parties to submit their disputes to mediation; but
I do not see why, in the notorious case of boundary and neighbour disputes,
directing the parties to take (over a short defined period) all reasonable steps to
resolve the dispute by mediation before preparing for a trial should be regarded as
an unacceptable obstruction on the right of access to justice.

Can the court force parties to mediate?


Article 6
No - the court has no jurisdiction to force the parties to
mediate, relying on Article 6 of the European Convention
on Human Rights(ECHR): "It is one thing to encourage the parties to agree to
mediation, even to encourage them in the strongest
terms. It is another to order them to do so. It seems to us
that to oblige truly unwilling parties to refer their disputes
to mediation would be to impose an unacceptable
obstruction on their right of access to the court.it seems
to us likely that compulsion of ADR would be regarded as
an unacceptable constraint on the right of access to the
court and, therefore, a violation of Article 6."

Land/Real Property
Disputes
Rights of way, rights of light and other
easements
Neighbour disputes
Party walls
Misrepresentation claims and other
conveyancing disputes
Options and overage
Property development and complex purchases
Joint ventures and partnership disputes
Restrictive covenants

Commercial Landlord
and Tenant
Negotiating leases
1954 Act lease renewals friendly and
hostile
Consents to assignment, sub-letting,
alterations
Rent Reviews
Break clauses
Dilapidations
Service charges

Residential Leases and


Tenancies
Consents to assignment, sub-letting,
alterations or development
Housing disrepair
Enfranchisement
Service charge disputes

Professional Negligence

Solicitors and barristers


Surveyors and valuers
Property managers
Project managers

Conclusions
Mediation is a very good thing,
whether you like it or not.
Costs are the single biggest issue in
litigation and a failure to mediate can
turn a winner into a loser.
Mediation is very apt for all land law
disputes.

Any questions?