Alternative Dispute Resolution is a term that covers a variety of methods that try and resolve disputes without court action. They are intended to be quicker and cheaper.
Benefits of Alternative Dispute Resolution:
Often quicker and cheaper than litigation due to how busy the courts are;
It provides flexibility, choice and control. For example, the parties would seek to agree an Arbitrator or Mediator whereas they would have little to no control over the appointed Judge;
Matters are entirely confidential and decisions are not published;
Settlement can be reached by consent and this may mean the parties can maintain an ongoing business relationship, which is less likely if a dispute is litigated;
Settlement is reached in around 89% of matters that take the ADR route as of July 2018 according to the Centre for Effective Dispute Resolution (CEDR); and
If settlement is not reached, it may still achieve progress such as a narrowing of the issues making any litigation more straightforward.
Drawbacks of Alternative Dispute Resolution:
If settlement is not reached, ADR will serve to delay any progress with the resulting litigation and will add costs that would not have been incurred had proceedings been issued immediately. It is worth noting, however, that if one party agrees to ADR and another does not, there may be cost consequences for the refusing party even if they succeed in the litigation;
Parties are concerns that they reveal their litigation position to their opponent;
ADR is rarely suitable if the parties require injunctive or other interim relief and it mainly assists with helping to reach a final settlement;
If a dispute has been ongoing and limitation for issuing proceedings is approaching, ADR does not stop the clock and so it may be that litigation is still required; and
Parties have voiced concern that agreeing to ADR can be seen as them showing weakness and being overly willing to settle.
The Different Types of Alternative Dispute Resolution:
This is in no way intended to be a comprehensive list and the finer details of each type of ADR should be considered prior to making or agreeing any proposal to proceed.
Negotiation:
Parties should always try and negotiate prior to exploring any formal ADR or litigation and the court would expect it. Provided all negotiations are agreed as being without prejudice the parties can talk freely and explore possible settlement without incurring any or any significant cost. It is a very flexible form of ADR and can take place either by way of correspondence or in person if the parties prefer. Where the parties’ positions are some way apart, it may be that this is not successful.
Mediation:
This is a private and non-binding form of ADR and all discussions benefit from mediation privilege meaning that the parties can speak freely knowing that the other is unable to rely on their words in any litigation that follows. The parties have the choice and control of selecting a mediator who acts as a “steer” on negotiations. The mediator can only seek to advise and bring the parties together and cannot make orders, so mediation is mainly useful and successful when both parties are keen to reach a settlement agreement.
Adjudication:
Used in the construction industry for many years, this is similar to mediation, but with strict timescales and the decision of the adjudicator is binding. It normally arises when there is an adjudication clause in a contract, but the parties can agree to the process without such provision. The strict timescales mean that the process can seem rushed.
Arbitration:
This is very similar to litigation and Arbitrators often follow the rules of the courts where there are no specific rules for arbitration. Unlike court proceedings, they are private and confidential. The process is often quicker than litigation and so cheaper on lawyer’s fees, but the costs of the arbitration are paid jointly and severally by the parties and these fees are significantly higher than a Court’s. Arbitration normally arises when there is an arbitration clause in a lease or a contract.
Other Forms:
There are other forms of alternative dispute resolution that may be worth considering in specific circumstances including med-arb and the use of certain boards.
For more information on ADR and any dispute you may be having, commercial or private, call us on on 01253 858231 or e-mail info@mjvlaw.co.uk
by MJV&Co
On 20 March 2020, the Homes (Fitness for Habitation) Act 2018 (‘the Act’) comes into full force.
It already applies to certain types of tenancies that started on or after 20 March 2019, but will apply to all qualifying tenancies on the same day in 2020.
Does it apply?
For the purposes of most residential landlords’ business, it will.
This is because it applies to:
tenancies shorter than 7 years that are granted on or after 20 March 2019 (tenancies longer than 7 years that can be terminated by the landlord before the expiry of 7 years shall be treated as if the tenancy was for less than 7 years)
new secure, assured and introductory tenancies (on or after 20 March 2019)
tenancies renewed for a fixed term (on or after 20 March 2019)
from the 20 March 2020 the Act will apply to all periodic tenancies. This is all tenancies that started before 20 March 2019; in this instance landlords will have 12 months from the commencement date of the Act before the requirement comes into force
As most private residential tenancies are for 6-12 months, it is highly likely that the Act will be a consideration for most landlords
What Does it Mean?
Back in 1985, the Landlord and Tenant Act of that year inserted a clause into all relevant tenancy agreements that required homes to be fit for human habitation, but it only applied to properties where the rent was below a certain amount. This meant that, very soon, it did not apply to any tenancies and was irrelevant.
The Act does not link the requirement to the rent paid and so it will apply to all qualifying tenancies and will not become outdated or inoperable due to inflation. It is here to stay.
It requires landlords to ensure that their properties are fit for human habitation and the test for this will be whether there are any of the following issues:
the building has been neglected and is in a bad condition
the building is unstable
there’s a serious problem with damp
it has an unsafe layout
there’s not enough natural light
there’s not enough ventilation
there is a problem with the supply of hot and cold water
there are problems with the drainage or the lavatories
it’s difficult to prepare and cook food or wash up
As housing disrepair specialists, our view is that the biggest change brought in by the Act will be the way landlords are required to address damp.
Currently
Only damp, mould and other such water related issues that are caused by disrepair at properties are actionable.
For example, a property that has penetrating damp due to a failed damp proof course would fall under the landlord’s responsibilities. The damp proof course is in disrepair and has allowed the damp problem to develop.
A property that was poorly designed and suffered from damp due to poor ventilation would not be covered by the landlord’s duty.
The Change
Unless a landlord can prove that the damp is caused by the tenant not acting like a good tenant (by not opening windows in the summer for example), damp and mould are a prescribed hazard. The landlord would be required to take steps to resolve the problem such as by fitting extractor fans. This would previously have been considered an improvement that a landlord was not required to make.
Generally
The above is just one example used to illustrate the point.
If you are a landlord or a letting agent and receive complaints from tenants, you need to know that the law is changing and the scope of your responsibilities has changed.
We act for claimants in such claims and we foresee that the number of housing disrepair claims with a reasonable prospect of success increasing significantly following the full introduction of the Act.
What Should I Do?
It is always wise to ensure that your insurance is comprehensive enough to provide you with assistance should a tenant present such a claim against you. Make enquiries of your broker or insurer and check if you have legal expenses insurance and, if so, what it covers.
You should also seek legal advice. This is is especially so if you have a tenant in a property who has complained of disrepair that was not previously your responsibility as it may well be as of 20 March 2020.
At MJV Solicitors we can offer a no obligation free consultation to advice landlords on the changes to the law and their responsibilities. Call us today on 01253 858231 to arrange.
by MJV&Co
Alternative Dispute Resolution is a term that covers a variety of methods that try and resolve disputes without court action. They are intended to be quicker and cheaper.
Benefits of Alternative Dispute Resolution:
Often quicker and cheaper than litigation due to how busy the courts are;
It provides flexibility, choice and control. For example, the parties would seek to agree an Arbitrator or Mediator whereas they would have little to no control over the appointed Judge;
Matters are entirely confidential and decisions are not published;
Settlement can be reached by consent and this may mean the parties can maintain an ongoing business relationship, which is less likely if a dispute is litigated;
Settlement is reached in around 89% of matters that take the ADR route as of July 2018 according to the Centre for Effective Dispute Resolution (CEDR); and
If settlement is not reached, it may still achieve progress such as a narrowing of the issues making any litigation more straightforward.
Drawbacks of Alternative Dispute Resolution:
If settlement is not reached, ADR will serve to delay any progress with the resulting litigation and will add costs that would not have been incurred had proceedings been issued immediately. It is worth noting, however, that if one party agrees to ADR and another does not, there may be cost consequences for the refusing party even if they succeed in the litigation;
Parties are concerns that they reveal their litigation position to their opponent;
ADR is rarely suitable if the parties require injunctive or other interim relief and it mainly assists with helping to reach a final settlement;
If a dispute has been ongoing and limitation for issuing proceedings is approaching, ADR does not stop the clock and so it may be that litigation is still required; and
Parties have voiced concern that agreeing to ADR can be seen as them showing weakness and being overly willing to settle.
The Different Types of Alternative Dispute Resolution:
This is in no way intended to be a comprehensive list and the finer details of each type of ADR should be considered prior to making or agreeing any proposal to proceed.
Negotiation:
Parties should always try and negotiate prior to exploring any formal ADR or litigation and the court would expect it. Provided all negotiations are agreed as being without prejudice the parties can talk freely and explore possible settlement without incurring any or any significant cost. It is a very flexible form of ADR and can take place either by way of correspondence or in person if the parties prefer. Where the parties’ positions are some way apart, it may be that this is not successful.
Mediation:
This is a private and non-binding form of ADR and all discussions benefit from mediation privilege meaning that the parties can speak freely knowing that the other is unable to rely on their words in any litigation that follows. The parties have the choice and control of selecting a mediator who acts as a “steer” on negotiations. The mediator can only seek to advise and bring the parties together and cannot make orders, so mediation is mainly useful and successful when both parties are keen to reach a settlement agreement.
Adjudication:
Used in the construction industry for many years, this is similar to mediation, but with strict timescales and the decision of the adjudicator is binding. It normally arises when there is an adjudication clause in a contract, but the parties can agree to the process without such provision. The strict timescales mean that the process can seem rushed.
Arbitration:
This is very similar to litigation and Arbitrators often follow the rules of the courts where there are no specific rules for arbitration. Unlike court proceedings, they are private and confidential. The process is often quicker than litigation and so cheaper on lawyer’s fees, but the costs of the arbitration are paid jointly and severally by the parties and these fees are significantly higher than a Court’s. Arbitration normally arises when there is an arbitration clause in a lease or a contract.
Other Forms:
There are other forms of alternative dispute resolution that may be worth considering in specific circumstances including med-arb and the use of certain boards.
For more information on ADR and any dispute you may be having, commercial or private, call Michael Vincent on 01253 858231 or e-mail michael.vincent@mjvlaw.co.uk
