Landmark ruling set to generate significant rise in alternative dispute resolution settlements

4th November 2013

COURT OF APPEAL UPHOLDS DECISION AND PUNISHES COMMERCIAL TENANT FOR MEDIATION FAILURE The number of commercial property disputes where the parties attempt to settle through mediation is set to increase significantly following a recent landmark decision handed down by the Court of Appeal says a Sheffield-based property litigator.

  The PGF II SA-v-OMFS Company 1 Limited case focuses on a landlord's claim against a former tenant for damages in relation to the disrepair of three office floors in a building on London's Lombard Street.   The claimant originally issued proceedings for damages of £1.9m and later made without prejudice offers of £1.25m and £1.05m. The defendant and former tenant offered to pay £700,000 and crucially, refused to mediate.   On the day before trial in January 2012, the landlord accepted the tenant's offer of £700,000 on the basis that they were not liable for the air conditioning system. By this time, however, both sides had spent £250,000 on legal costs.   The case was heard by the Court of Appeal after the judge in the initial hearing had said, despite the usual rule, that the tenant was not entitled to recover its cost from the landlord because it had refused to respond to requests to mediate.   Although the defendant appealed this decision claiming that mediation would have failed, the Court of Appeal upheld the original decision.   Danny Revitt, a property litigation partner at the Sheffield office of law firm Irwin Mitchell, said:   -The Court of Appeal's decision in PGF reiterates the importance of mediation in the litigation process. Whilst, for the time being, Courts do not have the power to compel mediation this case makes clear the potential and costly consequence for a party that fails to engage in the process. Well advised litigants will almost certainly see this case as a way to exert pressure on opponents and it will undoubtedly lead to an increase in mediations. -

You might also be interested in

Business Key To Government Spending Plans

Tue 11th February 2025

The BCC is urging Government to help firms grow as it considers its future spending plans.

South Yorkshire Businesses Asked To Share Their Views On The Planning System

Mon 10th February 2025

Businesses across South Yorkshire are being asked to share their experiences with the local planning systems

Rate Cut Eases Some Pressure Points

Fri 7th February 2025

David Bharier, Head of Research at the British Chambers of Commerce reacts to the latest interest rate decision

Sheffield Chamber of Commerce and Industry holds 2025 AGM

Fri 7th February 2025

Sheffield Chamber of Commerce and Industry (SCCI) hosted its 167th Annual General Meeting (AGM) today, welcoming members for an afternoon of connection, celebration and insight.