You better (not) knock, knock, knock on wood

As an accredited mediator, it’s always of interest to me when I come across an example of a dispute which is better resolved through mediation than through litigation. These stories provide useful examples of the benefits of a mediated settlement.

Even more interesting was the example I came across just a few days ago in which I could just as easily have been one of the parties in need of mediation. Sadly, the actual parties in the case didn’t take the mediation route. They litigated all the way to the Court of Appeal (so far).

The court plainly agreed with the common sense approach but declared that its hands were tied legally

I am chairman of the company which owns and manages an apartment block. With over 130 apartments in the building, we regularly find ourselves receiving requests for permission to alter the interior of an apartment. Permission is needed if the works might adversely affect a neighbouring apartment and, in such cases, we have to appoint property specialists to ensure everyone’s rights are protected.

This is not always as easy as it first appears. Recently, there has been a wave of residents wanting to install wooden flooring. It’s smart. It’s fashionable. And, with the sound-proofing inherent in modern wood flooring, it’s usually quite OK.

But not always. We have had a few cases where neighbours have complained that the sound of heel-on-wood is causing a disturbance. It’s a regular source of worry for us as landlords, because there seems to be no way to predict in advance which floors will cause a problem. Residents who want hard flooring always seem to be convinced beforehand that the sound-proofing will be adequate – and disbelieving afterwards when they learn of a complaint. So far, we have managed to steer our residents through these problems.

Not so for the owners of Flat 6 Eaton Mansions, Cliveden Place, London SW1. The landlord of Eaton Mansions granted their upstairs neighbours a licence to lay £100,000-worth of wooden flooring along with under floor heating. There were conditions regarding sound-proofing which were apparently complied with, but nevertheless the occupants of Flat 6 were able to hear footsteps when people were walking above them. They sued to have the upstairs lessee reinstate carpeting. It may have seemed to them like an open-and-shut case – carpeting is required under the terms of the lease – but they lost.

Legally, the case turned on whether the licence to lay flooring overrode the lease or did the lease prevail? This was an all-or-nothing argument. Only one side could win. And one side would lose. Knowing in advance which it would be was far from clear. As Lord Justice Jackson said in his judgement:

“The points of law upon which the litigation has turned are not easy ones … neither party could have been confident of victory.”

[I rather suspect, given the amount of money spent on legal fees, that at least one side, if not both, was confident of victory. Perhaps Jackson LJ might better have said “neither party should have been confident …”]

The claimants did not have their minds set on a complete victory. They said that laying a few rugs could solve the problem without frustrating the purpose of the (plainly, very expensive) flooring. This was an intermediate solution that could have provided them with the desired protection from noise disturbance, without frustrating the purpose of the licence granted to their upstairs neighbours.

The court plainly agreed with this common sense approach, but declared that its hands were tied legally:

“[As much as the] intermediate solution might have a great deal to be said for it as an agreed or mediated solution to this sort of issue, arising as it does between neighbours who may have to live with the situation over a long period … [it is not] one which the court could achieve, whether under its discretion as to the grant of, and the terms of, an injunction, or in any other way.”

With £100,000 spent on the flooring and £140,000 spent on legal costs, this all seems somewhat tragic. Lord Justice Jackson again:

“In the present case a mediator would not have been concerned about the interaction between the various leases and the licence to carry out works. Nor would he have been concerned about the other interesting points of construction, which first the county court judge and now this court have been called upon to decide. Instead he would have been helping the parties to find a sensible resolution of the practical problem which had arisen.”

Sometimes litigation is the best advert there is for mediation.