Alternative Dispute Resolution (ADR) in Property Disputes

As of 1 October 2024, the Civil Procedure Rules (CPR) have been updated to place ADR at the forefront of the litigation process.

Following the Court of Appeal’s decision in Churchill v Merthyr Tydfil CBC (2023), ADR is now explicitly included in the CPR’s overriding objective (CPR 1.4(2)(f)), which is focused on dealing with claims justly and proportionately.

Courts are now required to actively promote or use ADR to achieve this objective and there is a burden on the parties to prove that they have considered the use of ADR from the outset. The new rules include:

• Granting Courts the power to order parties to engage in ADR as part of the case management process (3.1(2)(o)).
• Requiring ADR in fast and intermediate track claims (CPR 28.7(1)(d)) and in multitrack claims (CPR 29(1A)).
• Considering a party’s failure to engage in ADR or comply with ADR orders when determining liability for costs (CPR 44.2(5)(e)).

Why is ADR beneficial for property disputes?

ADR offers a practical, efficient and cost-effective way to resolve many types of disputes. Unlike Court proceedings, which can be lengthy and costly, ADR provides flexibility, allowing the process to be tailored to the specific needs of the parties involved and the parties the opportunity to agree outcomes which go beyond what a Court could order if the matter proceeded to trial.

For property disputes in particular, ADR can provide significant benefits:

• Faster resolutions – which can be beneficial to avoid delaying a development project or the re-letting of a property.
• Cost savings – by reaching a negotiated agreement, parties can avoid lengthy litigation and consequently limit their legal costs.
• Preserving relationships – whether it is a landlord and tenant issue, a boundary disagreement between neighbours or a dispute between a land owner and a developer, ADR can minimise the strain placed upon relationships which need to continue beyond the resolution of the dispute.

In many cases, ADR provisions may already be included in your lease, license or contract. At the outset of your matter, we will advise on your obligations to consider ADR, the most suitable type of ADR for your situation and work with you to find a swift and cost effective resolution to any property dispute.

How are the new rules being applied in property disputes?

Two recent cases demonstrate the importance of ADR in resolving property disputes:

• In Churchill v Merthyr Tydfil CBC (2023), a case concerning Japanese knotweed, the Court of Appeal highlighted the claimant’s failure to use the local authority’s complaints procedure or to consider ADR. The Court found the claimant’s approach in refusing a stay to allow for ADR was inconsistent with the overriding objective, emphasizing the growing expectation that Court proceedings are used as a last resort, with ADR being an expected preparatory step.
• In Dandara South East Ltd v Medway Preservation Ltd & Anor (2024), a dispute arose under a contract for sale, conditional on certain groundworks being completed. The contract’s expert determination clause was deemed applicable to all disputes, leading the Court to stay the case and direct the parties to engage in ADR.

These decisions illustrate the Courts’ increasing emphasis on ADR as a key element of property dispute resolution.

How can we support you?

Our experienced team is here to guide you through the use of ADR in property disputes. Whether it is advising on your obligations in relation to ADR, considering the options which are most suitable in your circumstances or representing your interests in the ADR process, contact us today to discuss how we can help.