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Mediation is the most sensible way to resolve service charge disputes

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13th January 2016

Mediation is the most sensible way to resolve service charge disputes. It is fast, cost-effective and flexible and it can help to bring about a better and more constructive relationship between the parties after the dispute has been mediated, often enabling them to resolve future disputes by themselves.

Not only is it quicker (in service charge disputes usually no more than a month from start to finish) and cheaper (no application fees, minimum documentation and the mediation will take no more than a day) and more flexible (mediation is not restricted by the jurisdiction given to a tribunal or court by law) than litigation; it is also confidential, final (no appeals), and without the risks of costs awards, or costs added to service charges, that come with litigation in the tribunal or court. And, best of all, the parties have control over the outcome – the mediator will not impose a result that maybe none of the parties wants but will help them to arrive at a solution that each can live with.

To set up a mediation, all the parties to a service charge dispute need to do is choose a mediator and sign an agreement to mediate. The mediator will then get in touch with them by email or telephone to discuss what the dispute is about, and will send them written guidance on how to prepare for the mediation. The documents they will need for a service charge dispute will usually be limited to a short position statement summarizing the issues and a few – maybe three or four – essential documents such as the lease (if liability to pay is in dispute) and the relevant service charge accounts.

The parties and the mediator will choose a date and time for the mediation and on the day the parties can be represented by a lawyer, surveyor or friend, or not, as they choose. The mediation will be totally informal and off the record. The mediator will shuttle between the parties and/or they will be in a room face to face – whichever seems more appropriate in the circumstances. The mediator will probably talk to each of them privately and confidentially, and will make constructive suggestions to help them find an agreement which they can all live with. The mediator cannot impose a solution although, if the parties wish and the mediator thinks it would be helpful, she or he will tell each of them, privately, what in the opinion of the mediator would be the result if they resort to litigation.

If they are able to reach agreement on the day the terms will be written down by the mediator or the parties and signed. The signed agreement is a contract which can be enforced in the courts if need be. Occasionally the parties will want to think it over and take advice before they sign, but in the writer’s experience over 90 per cent of service charge disputes which are mediated will result in agreement on the day.

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