The purpose of this Memorandum is to introduce the Party Wall Mediation Scheme (‘the Scheme’) which is provided by the two professional bodies representing party wall surveyors, the Pyramus & Thisbe Society and the Faculty of Party Wall Surveyors in association with His Honour Edward Bailey.

An Award under the Party Wall etc Act 1996

The rights given by the Party Wall etc Act 1996 (‘the Act’) to both Building Owners and Adjoining Owners operate in practice by an Award made by one or more Party Wall Surveyors. This Award follows the service of a notice by the Building Owner on the Adjoining Owner and is required where the Adjoining Owner does not expressly agree to the Building Owner carrying out the proposed works. The Award settles the dispute (whether actual or deemed) between the respective owners.

An Owner who is dissatisfied with the terms of the Award has the right under s10(17) of the Act to appeal to the county court. The court is given wide powers to uphold, rescind or modify the Award. Such an appeal must be exercised quickly. The Notice of Appeal to the county court must be issued within 14 days of the service of the Award on the appealing Owner, and this period of 14 days includes the day on which the Award is served. This short period within which an appeal must be commenced reflects the fact that in many cases an appeal against an Award may serve to delay the Building Owner’s works, and any such delay ought to be kept to a minimum.

Realities of litigation today

Unfortunately, the reality of litigation in the county court today means that parties to a party wall award appeal can usually expect to wait at least fifteen to eighteen months for a court hearing, as opposed to the six to eight weeks within which it should be possible to conclude a mediation. Furthermore, if either or both parties engage solicitors and counsel to represent them at a court appeal hearing legal costs of very considerable amounts will be incurred, (usually at least £50,000 to £75,000) with the real prospect that the loser at the hearing having to pay both his and a majority of his opponent’s costs. Even the winner of the appeal will usually not recover all their legal costs from the losing party. Some Owners therefore present or defend an appeal themselves. But party wall matters are frequently very technical, and most Owners are ill-equipped to manage an appeal by themselves.

This reality of litigation is well-known by those responsible for the administration of justice. It is a requirement of the Civil Procedure Rules that the court urges litigants to seek to settle their disputes by ADR (alternative dispute resolution) and, in particular, by Mediation. Case law from senior courts is increasingly emphasising the need for parties to engage in ADR, and mediation in particular, and a party who fails to engage in ADR without a good reason will face cost penalties at the end of the case, even where they took the view that they had a strong case and would eventually be the winning party.

Specialist mediators

Many lawyers and non-lawyers offer their services as mediators, and parties to a party wall dispute who decide to mediate their dispute are free to choose whoever they wish to act as a mediator. However, because party wall disputes frequently involve detailed technical issues of surveying, engineering, or legal practice the two professional bodies representing party wall surveyors have come together to provide the Scheme which will provide Owners with a list of mediators specialist in party wall matters. Owners will then be able to select a mediator confident that he or she is fully familiar with the Act and its operation, and, where technical surveying, engineering, or legal matters are involved, has practical experience and expertise in the subject-matter of the dispute.

The need to issue an appeal

No appeal, certainly in a party wall matter, should be undertaken lightly. Fourteen days is a very short time indeed in which to decide whether or not to appeal a Party Wall Award and if there is to be an appeal to draft the Notice of Appeal and have it issued in the county court. Even where the Owner wishing to appeal would prefer to mediate, it will be necessary to commence an appeal so as to safeguard the Owner’s position. Obtaining the other owner’s consent to mediate, agreeing a mediator, and entering into a mediation agreement will almost certainly take more than fourteen days, and should the mediation fail to reach a satisfactory result the appealing Owner will wish to be able to fall back on the court appeal.

Legal assistance

To assist Owners contemplating an appeal the Scheme is able to provide Owners with a list of solicitors and direct access barristers who offer their services in party wall matters. Such a lawyer will be able to:

(a) draft the required Notice of Appeal,
(b) assist in issuing the appeal in the appropriate county court,
(c) help prepare the Skeleton Argument which is usually required to support the appeal,
(d) assist the Owner in the course of the Mediation should the Owner wish to have legal help and advice.

The Scheme also provides an appealing owner with a draft Court Order which the court should be asked to make on the issuing of the appeal, staying the legal proceedings to enable mediation to take place. For the Respondent Owner a Scheme lawyer will be able to help prepare the Respondent’s Skeleton Argument opposing the appeal and to advise generally as to the Respondent Owner’s position on the appeal. The list of lawyers is provided by the Scheme solely to assist owners who do not have a party wall lawyer of their own. Owners are, of course, entirely free to rely on their own choice of lawyer at any stage of the appeal or mediation procedure.

Further advantages of mediation

The advantages of mediation are not restricted to speed and cost. In a mediation the parties will be able, should they wish, to include matters in any agreement they reach which could not form part of a court order. Mediation is also a strictly confidential procedure. There can be no publicity in the press (adverse or otherwise) as does occasionally happen where there is a county court appeal.

Mediation conducted remotely

It is now possible to conduct mediation hearings remotely. This is plainly important while Covid-19 is still about, but remote mediation may be preferable in many cases in any event. Remote hearings save both the cost of a venue and the time taken to travel. There will however be occasions when it is necessary for the mediator to inspect one or both of the relevant properties. When an inspection takes place it may be advantageous for the mediation hearing to take place immediately after the inspection using one or both the properties in question. That will be a matter for the Owners to agree with the mediator. In all other cases however the mediation may take place remotely if this is agreeable to the Owners. All the Scheme mediators will be able to host a mediation hearing on either Zoom or Microsoft Teams.

‘Medi-Arb’ available

Of course it cannot be guaranteed that a Mediation, even an evaluative mediation with a specialist mediator, will result in the parties reaching an agreement. For parties wishing to have the certainty of a decision without any further delay there is the possibility of agreeing to engage in ‘Medi-Arb’ where the mediator becomes an arbitrator should the mediation break down. The mediator turned arbitrator will then provide a reasoned arbitration judgment which determines the parties’ dispute. This judgment will be available within a short time period.

Early neutral evaluation

A further option available to parties under the Scheme is early neutral evaluation. Under such an evaluation the evaluator, who will have had considerable experience of party wall appeals in practice, will consider both parties’ arguments in a prospective appeal and give a considered view as to the likely outcome were the appeal to proceed to a court hearing. The object of the evaluation is to give both parties the ability to assess their prospects of success with the benefit of an informed option, and thus be in a better position to reach a settlement.

The list of mediators

The list of Scheme mediators provided to Owners from whom the Owners may select a mediator will comprise a list of names, a short CV with areas of expertise, and the mediator’s standard fee for a full or half day mediation together with all the preparatory work required for the mediation hearing. The owners are expected to pay the standard fee, or any other fee agreed with the mediator, in advance of the hearing on an equal basis. Where the cost eventually lies is a matter which may be agreed between the Owners in the course of the mediation. An additional fee may be payable if the Owners wish to have the mediation hearing at a neutral venue, or if the Owners agree to proceed to an arbitration award (which will be reasoned and in writing) in the event that mediation fails but the Owners want an early conclusion to their differences.

All mediators are required to comply with the Scheme’s Code of Conduct, a copy of which can be found here.