This is the first of what we intend to be a regular offering of problem solving scenarios from our panel of mediators.
When I first started out as a full time mediator in 1995, my previous career as a Chartered Surveyor stood me in good stead to help people find ways of resolving property and construction disputes which would cost a fortune to take to court. The property sector is never short of a dispute and during my mediation career I have mediated everything from boundary disputes between neighbours (some of the hardest to settle!) to those involving multi-million pound developments and a multitude of parties. But it is the dispute which finds a resolution which would be outside anything a court might be able to deliver that can give the most satisfaction to both the mediator and the parties.
Take for example, the dispute between a wealthy individual (Mr A) building his dream home, a seven bedroom mansion. He entered into a design and build contract with a contractor/developer at a cost of just over £4 million. It was apparent that Mr A had not been the easiest of clients – the specification was amended many times and the final account came to over £6 million. This came as a shock to Mr A, who had totally under-estimated the impact his variations would have on the cost and the delivery of the project, with increased preliminaries and significant extensions of time being required.
Mr A disputed this and indicated that he would be counter-claiming for a significant schedule of defects.
On the day, Mr A turned up with his legal team and experts, and the building company, highly experienced in building top of the range mansions on private Home Counties gated estates, was represented by its senior management and professional team. They were very indignant at the list of defects which they were presented with, taking considerable pride in the high standards to which they worked.
In the course of private meetings with Mr A it transpired that he was actually very pleased with his new house and appreciated the high quality of most of the workmanship. Unusually for cases of this sort, he was open to my suggestion that he have the contractor back to remedy the defects. On the other hand, the contractor was prepared to admit privately that there were a good many defects that needed attending to and that some of their sub-contractors hadn’t performed to their usual standard.
This was the moment when suddenly I saw that a deal might be possible.
During the course of the day, I worked with the parties, sometimes together but more often separately, to edge them towards agreement on the scope of the defects works and a timescale for completing them. Quantity surveying experts met under my supervision to try to find agreement on the final account, and eventually a compromise emerged. The deal was for Mr A to settle a discounted final account by way of staged payments geared to the completion of various stages of the remedial works.
This dispute was settled before proceedings had been issued at court, representing a huge saving in time, cost and stress for both parties. Each party had incurred costs to this point but these were a little under £25,000 each whilst the costs of a full hearing would have been at least £250,000 per party. In addition, both parties avoided the inherent risk and uncertainty of a trial and the contractor/developer avoided the potential for reputational damage in circumstances where its usual high standards may not have been met. A win all round!
