Mediation Brochure - RICS

Mediation through
the RICS Dispute
Resolution Service
A fast, cost effective, and amicable way to settle
disputes over land, property and construction
DRS rics.org/drs

Changes to Civil Procedure Rules require lawyers to
consider the use of Alternative Dispute Resolution (ADR).
Mediation is a form of ADR that gives parties
control over how a dispute is resolved.
It’s a quick, inexpensive, informal and confidential process
that gives disputing parties an opportunity to work towards
a solution that’s acceptable to all those involved.
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Professional mediation is led by an impartial,
specially trained expert with the skills to guide
the parties involved towards a successful outcome.
In this brochure you will find:
• an introduction to the concept of mediation
• examples of how mediation can work to help resolve property and construction disputes
• details of how to refer a dispute to mediation through the RICS Dispute Resolution Service.
What is mediation?
Mediation is the name given to a confidential process whereby parties to a dispute invite
an impartial, third party to facilitate negotiations between them with a view to achieving
a resolution of their dispute.
I can negotiate: why should I mediate?
If negotiation leads naturally to a conclusion that is acceptable to all parties, there is
no need to mediate. However, negotiations sometimes end in deadlock. A mediation
session can break that deadlock.
Why should mediation work where negotiation has failed?
Firstly, negotiation tends to be confrontational. The parties perceive themselves to be
opponents and each wants to ‘win’. However, a mediator will try to shift the dynamics
of the negotiations away from positional bargaining towards principled negotiation,
where the parties view each other as collaborators in a problem-solving exercise.
In a mediation the parties are not ‘eyeball to eyeball’ across a table – rather they negotiate
through a mediator who helps to introduce objectivity.
Just as importantly, discussions with a mediator are held in private. The parties involved
are able to share confidences with him/her, benefiting from the freedom to speak frankly
about their true interests.
Such openness affords the mediator a unique overview of the dispute and can help
him/her identify ways in which the parties can satisfy their needs. Through questioning
techniques and by suggesting options for consideration, the mediator can gradually
help the parties to devise an agreement that will help to resolve their dispute.

Surely agreeing to mediate is a sign of weakness?
Agreeing to mediate should not be seen as a sign of either weakness or strength – it is
purely common sense. Simply, the message is “let’s talk and see if we can resolve this
dispute in a way that satisfies our respective needs; avoiding the delay, expense and
hassle associated with traditional methods such as litigation and arbitration.”
The parties to a mediation have nothing to lose. The process is conducted on a ‘without
prejudice’ basis and, if at any time, any of the parties involved feel unhappy with the
direction the mediation is taking, they are free to leave the process. Should mediation
fail, the participants can still choose to turn/return to litigation or arbitration.
The preparation that they and their advisers have done for the mediation will still be useful.
I have heard that mediation is non-binding –
so what’s the point of it?
This is a common misconception. It’s true that mediation is non-binding in the sense
that entering into the process is voluntary, it involves no commitment to settle and the
mediator has no power to impose a solution. However, when a mediated agreement is
reached, the parties then sign the written agreement with the intention that it becomes
a legally binding contract.
Do I need a professional adviser?
No – representing yourself is an option, although the experience of the organisations
providing mediation services is that most parties do employ a professional adviser, for
example, a chartered surveyor and/or solicitor or barrister.
What cases are suitable for mediation?
Any dispute is suitable for mediation provided the parties to the dispute are willing to try.
Some cases are more suitable than others. Experience shows that multi-party disputes are
particularly suitable for mediation, perhaps because they are often complex and the cost
of sorting them out through more traditional techniques can be very high. The process is
also especially well suited to disputes that have a long-term relationship to protect.
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Examples of land, property or construction related issues which may
be suitable for mediation include:
• valuation, including rent reviews (especially where other issues may be involved)
• building works
• commercial landlord and tenant rights and obligations (eg dilapidations, service charges etc)
• joint ventures and development agreements
• disputes over residential leasehold obligations and restrictive covenants on title including
contractor/employer and contractor/sub contractor relationships
• disputes concerning professional fees or other aspects of professional appointments
• professional negligence claims
• partnership disputes
• land boundary and other ‘neighbour’ disputes
• local authority housing
• disputes involving public bodies and national utilities such as compensation for compulsory purchase.
These are only a few examples and, in practice, almost all disputes are suited to mediation. Even some
international and cross-border disputes have been found to be appropriate cases for mediation.
Mediation and the planning process
Today, mediation is often used when disputes arise during the planning process.
It can be helpful in a wide range of matters both simple and complex eg. neighbourhood planning,
development management, negotiations on financial obligations and enforcement.
However, using mediation does not remove the need to follow the statutory code; nor is it intended
to avoid transparent lawful decision-making or to negate the role of committees in determining
planning applications.
Mediation can be designed to ensure that the important representational and decision-making roles of
elected councillors are fully respected. It is compatible with the democratic planning process because
it does not bind the decision-maker unless he/she/they are party to the mediation.
Mediation can also be structured to take in third party interests such as neighbours and other interested
parties or to include confidential exploration of individuals’ positions without infringing public law/third
party rights.
The process provides an opportunity for participants to discuss issues and resolve problems in a
structured and non-confrontational atmosphere.
Just as importantly, mediation can be cost-effective – the additional cost, primarily the mediator’s time,
is paid for as agreed between the participants, either by one of the participants, or split.
Mediation offers participants a real opportunity to save significant time and money, especially where
appeals can be avoided.
Extracted from: Mediation in Planning, a Short Guide by the National Planning Forum
Does mediation work and if so, why?
It is estimated that the mediation success rate exceeds 70%.
Mediation works because, unlike traditional methods, it provides an opportunity for the
parties to work together constructively towards a settlement. It also offers the chance to
bring to a discussion elements that lie outside the original dispute but that can frequently
lead to a resolution where both parties will gain from an agreement. A further benefit is
that mediation can be conducted on a confidential basis, away from the glare of publicity.

Industry comment – from a RICS Accredited Mediator
Solving a dispute over dilapidations
“ Dilapidations
disputes lend themselves well to mediation as well as any other –
as long as the mediation occurs at the appropriate time. The essence of
dilapidations is a breach of contract to repair, decorate or reinstate a leased
property and for mediation to be effective, the extent and nature of the breaches
needs to have been properly discussed by the respective surveyors to avoid
mediation becoming a very expensive posturing or fact finding exercise.
An interesting example can be given of a small industrial unit let on full repairing
terms and then sub-let with limited repairing obligations due to a schedule of
condition. The situation was further complicated by the discovery of steel corrosion
in the reinforced concrete elements of the structural frame. The dispute, which
had been fully discussed between the parties, revolved around the nature of the
steel repairs and the extent of recoverability from the sub-tenant. No two parties
were prepared to settle without the agreement of the third.
Mediation was held with all three parties being present and proved to be extremely
effective. A dispute that had run into the buffers when negotiations were
exhausted 18 months earlier was resolved in less than six hours.
”
Edward Shaw, Director – Building Consultancy, Savills
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Industry comment – from a RICS Accredited Mediator
Mediation: the effective solution to service charge disputes
“ Service
charge disputes are difficult as they endanger the good relationship
between owners and occupiers. Any form of adjudication means that one party
will win and one will lose; therefore the chance of one being aggrieved and
continuing to effectively engage in the working relationship is unlikely.
In mediation the parties can stray outside the strict terms of the lease. They
can agree practical methods for going forward which are solutions that are
not available to a judge, arbitrator or independent expert when they adjudicate
the dispute. Mediation allows the parties to address ‘cultural matters as well
as the terms set out in the lease.
One occasion where mediation will not work is where a decision is needed; for
instance to interpret the meaning of the words of a lease. Here some form of
external adjudication is needed.
Finally mediation is substantially more cost-effective than arbitration, independent
expert or trial at court.
Whether the parties represent themselves or are advised, the cost of the mediator
at a full day’s mediation is likely to be less than a £1,000 for each party, where
typical costs of a day in court could well more than run at £10,000 plus
preparation time.
So what happens at a mediation?
Mediation can be evaluative or facilitative.
Evaluative Mediation
Early neutral evaluation means that a third party takes a look at the party’s
arguments and advise the likely outcome in adjudication. This independent
assessment lets the parties focus on the matters that are really in dispute
and move forward to settlement.
Facilitative Mediation
Here the mediator shuttles between the parties, testing the reality of each side’s
position and looking at matters outside the strict legal interpretation of the lease
and the real causes of grievance between them. Then, with the permission
of each party, the mediator attempts to facilitate a settlement between them.
This mediation is completely confidential (it cannot be used in any form of
subsequent litigation). The mediator will only pass information from one side
to the other when the express approval of the party has been granted to let
the other side have that information. The parties are therefore in control, albeit
they don’t necessarily spend time face to face with their opposite party. By shuttling
between the parties, the mediator moves the matter forward and addresses
the key issues.
80% of mediations settle on the day or within two weeks of the mediation day.
Whilst there is no guarantee of success, if the parties are genuinely willing to
try there is a good chance that a satisfactory conclusion can be reached and
matters settled allowing a sensible business relationship to exist going forward.

Time Limited Mediation
For smaller disputes, rather than have a full day for the mediation, it can be
agreed that the mediation will only last say four hours and the costs therefore
will reduce proportionately.
Conclusion
Mediation allows a third party, the mediator, to work with the parties and
facilitate a settlement of the dispute. That settlement is something the parties
have agreed, thus allowing relationships to be maintained – particularly in terms
of future business. A mediation can stray outside the strict parameters of the lease
and therefore find innovative and genuine solutions to the difficulties between
the parties.
”
Chris Edwards, FRICS – Principal of Commercial Property Advisors Ltd.
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How to refer a dispute to mediation through
the RICS Dispute Resolution Service
Step 1 – Agreement to mediate
Contact RICS Dispute Resolution Service by writing to the appropriate address shown
on page 10 or telephoning 0207 334 3806. If required, RICS will contact the other party
to the dispute, or will discuss with one or both parties the mediation services available.
No charge is made for this initial consultation.
If the parties have already agreed to mediate:
The parties should send RICS a statement to this effect. This statement should include
all name and address details of the parties involved and any professional advisers. A brief
summary of the nature of the dispute should also be included.
RICS will respond by sending an application form for completion. This should be
returned to RICS together with the standard administration fee payable for the
appointment of a mediator.
The President of RICS will then appoint a mediator and notify the parties.
If the parties have not already agreed to mediation:
Once an application for mediation has been received from the initiating party,
RICS will contact the other party or parties seeking their agreement to participate.
If any of the parties are unwilling to agree to the first request for mediation, the initiating
party may then ask RICS to appoint a mediator who will re-contact the other party
or parties with a view to securing their agreement to participate.
Step 2 – Preparing for mediation
Following the mediator’s appointment, he/she will liaise with the parties to arrange an
appropriate date and location for the mediation and co-ordinate an exchange of case
summaries between the parties and the mediator.
When notifying the parties of the appointment, RICS will issue its standard form of
Mediation Agreement to the parties and the mediator. This provides a framework in which
the parties agree to the mediation process on a ‘without prejudice’, confidential basis.
The mediator will bring the RICS Mediation Agreement to the first mediation meeting
for signature by the parties.
The fees and costs of the mediation will be agreed with the parties and must be paid
before the mediation starts.
A more informal procedure can be adopted in urgent cases or for preliminary meetings.

Step 3 – The mediation process
One of the reasons why mediation works so well is that its format can easily be adapted
to fit the circumstances of parties and their dispute. There is therefore no rigid procedure;
mediations can be based on joint or separate meetings of parties and mediator, technical
experts can be used alongside a mediator, and so on. The stages below describe a typical
commercial mediation, often requiring only one day.
The mediator will explain the procedure to be adopted at the first meeting with the parties.
In most cases, mediation begins with an initial joint session with the parties during which
each presents a summary of the case, and how they see it, to the mediator. The mediator
may be assisted by a ‘Pupil’ who will already have undergone formal RICS mediator
training (see below).
The mediator will arrange a joint session for both parties to meet and agree the ground
rules required to engender a productive discussion. Each party will be invited by the
mediator to present their views of the dispute. The mediator will then manage the process
to ensure that each party has an opportunity to speak without interruption.
Several sessions of this kind may be needed for the mediator to become fully briefed
on the background to the case, and each party’s views and interests. This is designed
to facilitate detailed and candid discussion on the strengths and weaknesses of a case,
as well as any options available to resolve the dispute. The mediator will explore these
options and any settlement offers to be made, with each party.
If agreement is reached, terms of settlement are drafted with the assistance of the
mediator. Once finalised, these terms are normally signed by the parties with the
intention of forming a legally binding contract.
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If the mediator or any of the parties form the view that agreement cannot be achieved,
the mediation will be ended or postponed to a future meeting. The mediator may suggest
terms of settlement to the parties as a basis for future negotiation. Such suggestions are
based on the mediator’s view of possible negotiated terms for settlement and are not
a legal or expert opinion. At the request of the parties, the mediator may also assist the
parties to draw up a settlement agreement.
Step 4 – Follow up
At the end of the mediation, RICS will send a follow up questionnaire to all parties
involved, this questionnaire will provide valuable feedback and help RICS to monitor
the performance of mediators appointed by the President.
The mediator will then invoice the parties for any additional costs and expenses incurred.
Who are the mediators?
RICS holds a Register of Accredited Mediators. All Accredited Mediators included on the Register
will have successfully completed training with RICS or a training provider that meets the requirements
of the CMC.
All RICS Accredited Mediators are also required to pass the RICS Assessment Day.
RICS mediators have specialist expertise that enables them to open up discussions and provide a
wider range of options. Their ability to mediate does not rely upon a specialist knowledge of the matters
in dispute. However, RICS mediators do offer a wide range of experience of all aspects of land, property,
construction and other disputes. They focus on personal, commercial and technical issues – not just
legal matters.
RICS appointments are made by the President of RICS from the panel of mediators. Panel Mediators
will have passed the RICS Assessment Day and the requirements of the RICS interview panel.

How to apply for a mediator
All applications for a mediator should be directed to RICS Dispute Resolution Service
who will provide additional information.
Please write to the appropriate address:
England, Wales, Northern Ireland
RICS Dispute Resolution Service
Surveyor Court
Westwood Way
Coventry CV4 8JE
t: (020 7) 334 3806
f: (020 7) 334 3802
e: drs@rics.org
Scotland
RICS Scotland
9 Manor Place
Edinburgh EH3 7DN
t: (0131) 225 7078
f: (0131) 226 3599
e: jsneddon@rics.org.uk
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DRS rics.org/drs