Dispute between Neighbours – A case for mediation?

28-05-2012 09:48

Faidi & Anor v Elliot Corporation [2012] EWCA Civ 287 (16 March 2012)

This case involved a dispute between neighbours in a prestigious block of flats in London. Carpeted flooring had been removed from an upper flat and replaced with timber flooring benefitting from underfloor heating. The downstairs neighbours took exception to the noise created by this and sought to enforce a covenant in the lease of the property requiring floors within the flats (save for the bathroom and kitchen) to be carpeted, however, both the court at first instance and the Court of Appeal concluded that the timber flooring had been installed with the freeholders consent and the freeholder had waived the right to strictly enforce the terms of the lease of the premises which had required that floors be carpeted.

In the Court of Appeal Lord Justice Jackson had the following interesting comments to make about the suitability of mediation to cases of this nature:

“This case concerns a dispute between neighbours, which should have been capable of sensible resolution without recourse to the courts. During the course of his submissions in the Court of Appeal Mr Pearce for the claimants observed that this may not be an "all or nothing" case. A moderate degree of carpeting in flat 8 might (a) reduce the noise penetrating into flat 6 and (b) still enable the occupants of flat 8 to enjoy their new wooden floor. This is precisely the sort of outcome which a skilled mediator could achieve, but which the court will not impose. 

Of course there are many cases where a strict determination of rights and liabilities is what the parties require. The courts stand ready to deliver such a service to litigants and must do so as expeditiously and economically as practicable. But before embarking upon full blooded adversarial litigation parties should first explore the possibility of settlement. In neighbour disputes of the kind now before the court (and of which I have seen many similar examples) if negotiation fails, mediation is the obvious and constructive way forward. 

In the present case a mediator would not have been concerned about the interaction between the various leases and the licence to carry out works. Nor would he have been concerned about the other interesting points of construction, which first the county court judge and now this court have been called upon to decide. Instead he would have been helping the parties to find a sensible resolution of the practical problem which had arisen. I have little doubt that such a mediation would have been successful. The points of law upon which the litigation has turned are not easy ones and at the time of the hypothetical mediation neither party could have been confident of victory. 

As it is, neither side wrote to the other proposing mediation until shortly before the hearing in the Court of Appeal. By then huge costs had been incurred. The claimants' costs up to the end of trial were £23,195. The claimants incurred a further £34,609 costs on the appeal. The defendant's costs up to the end of trial were £32,798. The defendant incurred a further £49,532 costs on the appeal. Thus the total costs thrown away amount to £140,134. If the parties were driven by concern for the well being of lawyers, they could have given half that sum to the Solicitors Benevolent Association and then resolved their dispute for a modest fraction of the monies left over.”

This is an interesting commentary on the suitability of mediation in claims such as these where an adversarial approach may rule out the possibility of a sensible negotiated settlement.

If you would like any more information on mediation, please contact Philip Vickers.

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