Although the language of section 10 of the Party Wall etc. Act 1996 (“the Act”) undoubtedly uses the language of arbitration – “award” “dispute” “determination” – it is well established, that the dispute resolution process under the Act is not an arbitration, nor indeed a statutory arbitration. See, for example, Lea Valley Development Ltd v Derbyshire [2017] EWHC 1243 (TCC).
However, those surveyors who deal, often on a daily basis, with the quasi-arbitral dispute resolution process under the Act, may nonetheless have much to learn from studying the dispute resolution process used in arbitration, and commonly-used arbitration rules.
This is, therefore, the first in a short series of articles I plan to publish over the next month or two, which suggests some learning points for party wall surveyors arising from consideration of selected Articles from the UNCITRAL arbitration rules 2013 (“the Rules”).
Article 3(3):
The notice of arbitration shall include the following: … (e) A brief description of the claim and an indication of the amount involved, if any; (f) The relief or remedy sought…”
Although disputes under the party wall Act do not require an initiating notice as such – a point discussed further below – there is much that might be usefully adopted by party wall surveyors, and by parties under the Act, from Article 3(3) of the Rules. In essence the purpose of Article 3(3) is to ensure that the notice initiating the arbitration process provides the basic information necessary for the other party and the arbitrator to understand what the dispute is being brought to arbitration for, and how much it is worth. This information can then be used to inform both the appointment of an appropriate arbitrator, and whether the process which is then followed should be simple or sophisticated (i.e. depending on the value of the claim).
In terms of party wall matters, and this might be said to apply equally to deemed disputes and to actual disputes arising under section 10(1), it ought to be an essential part of the dispute resolution process for the surveyors to establish from the parties what the true extent of any dispute really is.
In relation to a deemed dispute, this might simply involve the adjoining owner’s surveyor asking the adjoining owner whether they have any particular concerns about the proposed works, or whether the reason the adjoining owner has not consented to the notified works is simply because they wish a surveyor appointed by them to independently review the building owner’s proposals.
In relation to an actual dispute, for example as to the extent of damage caused by notifiable works and the appropriate level of compensation to be paid, it is surprisingly rare for the surveyors to make any effort to establish the parties’ positions on such matters, or to seek to define the nature and extent of the dispute. This lack of clarity at the outset can cause significant and expensive difficulties further down the line. In the case of R on the application of Subramaniam v City of London Magistrates Court[2019] EWHC 1240 (Admin) for example, the failure of the surveyors to establish and clearly define the extent of the dispute between the parties led to an ambiguous award being made, with the consequence that the adjoining owner spent a great deal of time and money attempting, ultimately unsuccessfully, to enforce that award.
I would suggest, therefore, that, as a starting point, surveyors appointed under section 10 would be well advised to establish, and to record in writing, what the extent of the dispute between the appointing owners in fact is.
No less important is for the surveyors then to consider what the value of that dispute is. Although I have yet to see a case where party wall surveyors have explicitly asked themselves this question, it is arguably an essential stepping-off point for the dispute resolution process under the Act. Why?
Part and parcel of the dispute resolution process under the Act, and a subject close to the hearts of the surveyors acting in that process, is the determination of the surveyors’ reasonable fees. The explicit reference to the value of the claim under Article 3(3) of the Rules forces the parties and the arbitrator to address their minds to how the arbitration process should be tailored so as to be appropriate to the value of the claim. Thus, if a claim is of low value, a short and simple arbitration procedure can be adopted, whereas if the claim is of high value, a more sophisticated procedure can be utilised. Similar considerations apply in civil litigation generally, with the small claims track, fast track and multi-track, with different procedural and costs’ rules applying depending (primarily) on the value of the case.
My experience in party wall matters is that, almost universally, surveyors fail to give sufficient, or often any, consideration to the value of the matter in issue before launching into their dispute resolution process. Instead, the tendency is to consider all questions of fees at or very close to the end of that process – effectively determining after the event whether those fees were reasonable. It seems to me that this approach is fundamentally flawed. The surveyors appointed under section 10 should be asking themselves right at the outset what the value of the matter in issue is, and should then modify the dispute resolution process so that the fees which they incur are not disproportionately high.
Simple and/or low-value works neither require nor justify surveyors spending significant time and effort resolving disputes arising from them. In such circumstances, surveyors should ask themselves, at the very beginning, what steps are both necessary and proportionate to resolve the dispute. Is an inspection required? Is a formal schedule of condition required? Is an engineer’s input required? The oft-repeated mantra that the surveyors are a “practical tribunal” is never more appropriate than in these circumstances.
In the next article in this series I will look at Articles 5(3) and 11, dealing with a couple of issues often arising at the outset of dispute resolution under section 10 of the Act.
