The property end of building is even more disputatious than the contruction end. It needs to find a better way to resolve disputes – so why not adopt adjudication?
There must have been nigh on 400 folk who attended the RICS National Building Surveying conference at Savoy Place last month. Refreshing too, because building surveyors are not only doing building and refurbing and tinkering with buildings and builders, they also tinker with rights to light, party walls, lease dilapidations, rent reviews, boundary disputes and nuisance. I call these chaps the property boys. The refreshing bit was to hear about how easy it is to get on the thick end of a dispute through gobbledygook in leases, in energy directions and in break clauses, in (wait for it) nano-science. Oh yes, RICS building surveyors are into nanoscience.
My job was to give an overview of recent legal developments. What struck me by the end of the conference was that you property surveyors are almost always within a hair’s breadth of landing up in a piece of property in the Strand known as the High Court. And it’s not only commercial property disputes that are just around the corner, it is those nasty little domestic consumer disputes about neighbours and boundaries and planning. I realised that our construction industry having been quite fairly branded as disputatious can’t hold a candle to the disputatious property end of building. I kept hearing: “If you don’t do this or if you do do this, you will end up in the High Court.” Damn it, that’s what was being said on platforms and in this page to construction surveyors until 12 years ago. Listen up, you property folk, you need a better way to manage your disputes.
RICS president Max Crofts and I had a chat about this afterwards. We are nearly on the same wavelength about what’s missing in the property business. My immediate view is that given the massive success of adjudication in construction, property surveyors ought to use the 28-day dispute management system. Max Crofts’ idea is to include a mediation clause in all the property documentation. It says:
- The parties agree to seek to resolve any dispute that arises during the continuance of this lease/agreement or upon or after its determination amicably and in good faith by negotiation in the first instance.
- If the dispute continues to be unresolved, the parties agree to attempt to settle it by mediation and will jointly source the mediator from the list of accredited mediators approved by the RICS.
- If the identity of a mediator cannot be agreed by the parties, the mediator may be nominated by the RICS.
- If the dispute is not settled at mediation within 20 working days or such longer period as may be mutually agreed, either party shall be entitled to resort to any other process for resolution that is expressly or impliedly provided for in this agreement or litigation.
Now then, let me tell you a good reason to make mediation a success. It’s the threat of “resorting to any other process for resolution”. The conference speakers were plain: if the next step was the High Court, they shuddered. Try as I might to tell the 400 or so how warm, friendly and cuddly the High Court is, try as I might to tell them not to be so frightened about lawyers’ fees, they somehow didn’t believe me. So come on RICS – the next step is to import the new, new Adjudication Act. All parliament need do is find five minutes to extend the Construction Act to read “Construction and Property Act”. Parliament will do it if the RICS asks. Easy. So, there we are Mr President, that’s a small task for you and your new chief executive.
Look, the RICS is the prime mover and shaker in dispute resolution. In one month alone it made nigh on 100 adjudicator appointments, 180 agricultural dispute appointments, 430 commercial rent review arbitrator appointments and 300 more arbitrator appointments in all sorts of other areas. There is no reason why the 28-day adjudication process won’t work beautifully in property as well as construction. The impression I got is that all the 400 folk in the Savoy Place conference would say, yes please.
As to nanoscience, I was told it is “defined as the new industrial revolution”. There is already a £1bn demand worldwide for nanomaterials, dealing with nanoparticles down to one hundred-billionths of a metre in size. Thank goodness the construction industry still builds to the nearest foot.
Tony Bingham is a barrister and arbitrator at 3 Paper Buildings