A recent Court of Appeal case shows that mediation can often be a more beneficial way of resolving disputes than what Lord Justice Jackson referred to as ‘full blooded adversarial litigation’.
The dispute in question arose between the leaseholders of two upmarket apartments in Eaton Mansions, London. Hameed and Inam Faidi were the occupants and leaseholders of Flat 6. They, in common with all other leaseholders in the block, had covenanted in their lease to observe all regulations imposed for the management of the block. One of these regulations was that the floors of each flat should be covered with carpet and underlay, except for the kitchen and bathrooms.
Flat 8 was directly above the flat occupied by the Faidis, who complained that they were disturbed by noise from the tenants that would not have arisen had the floors of the flat been carpeted in accordance with the lease provisions. The Faidis sought an injunction to require the leaseholders of Flat 8 to lay carpet over the expensive oak flooring and underfloor heating which had been installed in the apartment.
The leaseholders of Flat 8 were able to show that the landlord of the block had granted consent for various works to be carried out, including installation of the floors. They argued that the grant of this licence waived the obligation to carpet the rooms, particularly as this was incompatible with installing wooden floors and underfloor heating. The Court of first instance accepted this argument, as did the Court of Appeal.
Lord Justice Jackson pointed out that in bringing the case to court the outcome was always going to be an ‘all or nothing’ situation. Either the court would hold that the requirement to lay carpets had been waived by the licence or it would not, whereas in this case a compromise between the parties (for example partial carpeting) might have been the best outcome. If the parties had chosen mediation, a compromise might have been reached and much of the cost of the litigation, which amounted to more than £140,000, could have been saved.