Some civil disputes could be characterised as emotionally charged, but few are as contentious and hard fought as matters involving the home. This month we have two examples of highly contested cases and a call from the court for compulsory ADR.
First, we will consider a boundary dispute over 17 inches of land where the legal costs ran to over £200,000. These figures speak for themselves, but if you had any doubt, the circuit judge who heard the case confirmed that the cost was “beyond my comprehension.” He was also critical of the fact that both parties wanted the claim to be heard in the multi-track (reserved for claims worth more than £25,000) when it was a small claim (i.e. valued at less than £10,000, where costs would have been limited).
The dispute over the location of fences between two houses in Walsall in no way merited the legal costs spent. Perhaps the fact that the neighbours had once been close friends was part of the reason they lost sight of what was really being fought over. If they had paused, even briefly, to think about the value of the land, they may have agreed the case could be dealt with as a small claim or by using ADR. If either of these options had been used, the costs would likely have been in the low thousands. As it was, both parties were out of pocket by tens of thousands (the Claimant’s costs alone were over £100,000) and the alleged trespass of a new fence was not even proven. The judge decided that the parties had entered into an informal boundary agreement – so the “result” is that they paid a small fortune just to have the court confirm what had probably been agreed between the parties before they fell out.
The second case, while also stark in terms of the money spent on legal fees, at least had the benefit of the judge making some sensible suggestions for change. The case was heard in the Technology & Construction Court (part of the High Court) and involved a domestic construction contract.
The Claimant was the builder, who had sued the homeowner for payment of outstanding invoices. The total sum in dispute was less than £160,000. The Defendant denied the claim and produced a schedule of 160 items that they claimed needed to be remedied. After a five-day trial where there were five witnesses of fact and eight expert witnesses, the judge decided that no money was due to either party. In this case there had been several attempts by the Court to encourage the parties to mediate. This included directions before the final hearing that the parties should engage in mediation. While the judge expressed dismay that the parties were not able to resolve their dispute out of court, he acknowledged that a trial was only way in some cases. While the results in both these cases were depressingly similar, both parties being the losers, the judge did make some helpful suggestions in this instance:
- The court making directions at the first case management conference. These directions would include parties providing limited disclosure, instruction of a single joint expert building surveyor, a pause in proceedings for mediation and limited recovery of legal costs.
- If parties were not willing to mediate, then there could be an order for compulsory early neutral evaluation (a type of ADR) before another judge.
- If there was still no settlement achieved, then further directions to restrict witness statement evidence and limit the case to a one-day trial could be made.
This streamlined approach might not be suitable or appropriate in every case, but it is certainly worth considering as a way of keeping costs proportionate in lower-value claims. The Judge’s most interesting suggestion is having some form of compulsory ADR.
Giving the court the power to order mediation, or a compulsory early neutral evaluation if mediation is inappropriate, would be in line with a June 2021 report from the Civil Justice Council. In this report the Council suggested that compulsory ADR was lawful, intensifying the debate about compulsory ADR. Compulsory mediation/ADR for small claims (£500 or less) is likely to be approved soon, and once this has happened it will no doubt eventually be applied to higher-value claims.
Parties cannot be forced to settle their claims, and there will be disputes which do need to be heard at trial, but this is a reform to the Civil Procedures Rules that is long overdue.