It's Good to Talk

Litigation can be expensive and there are good reasons in many cases for achieving a resolution by mediation when possible. The best course of action will depend on the individual circumstances of the case.

Recently, a court case was settled after a prolonged dispute between a landlord and a tenant over liability for the sharing of the cost of works to a building.

The tenant claimed nearly £6 million from the landlord. The landlord offered £400,000. The dispute was eventually settled, after more than a year of legal dispute, by the landlord paying the tenant £750,000.

When the question of which side would carry the legal costs was then considered, both sides claimed the other should pay: the landlord because the settlement was much lower than the sum claimed and the tenant because the settlement was more than the landlord’s original offer.

Although the court effectively ruled that the tenant was the ‘winner’, it only awarded the tenant 50 per cent of the costs it incurred commencing 21 days after the landlord’s offer was received. The judge considered that the original claim was ‘exaggerated’ and said that the tenant’s conduct in failing to respond effectively had driven up the costs unnecessarily. The practical effect of the decision was that the tenant’s irrecoverable legal costs exceeded the settlement awarded.

 

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