L1 How disputes and problematical issues can be resolved, and being able to prioritise key tasks

Question 1

What are the forms of insolvency?

Answer 1

Administration

Receivership

Company Voluntary Arrangements (CVA)

Voluntary liquidation

Winding up of company

Bankruptcy

Court procedure for an individual

Question 2

What is Administration?

Answer 2

Administrator appointed to rescue an insolvent company

Most common ‘rescue’ route

Process commenced either by company, its lenders or by order of the Court

Purpose = to create a period of protection for the company in order for the Administrator to deal with the assets of the company in the most appropriate way

The directors of the company continue in office but their powers cease

The administrator must send proposals to Creditors within 8 weeks and then with their agreement he will implement his strategy

Question 3

What is the main residential dispute resolution approach?

Answer 3

First-Tier Tribunal (Property Chamber)

Question 4

What does the First-Tier Tribunal (Property Chamber) dispute resolution approach cover?

Answer 4

Used for disputes between landlords and tenants / between freeholders and long leaseholders

Members appointed FTT = drawn from a pool of members appointed by the Lord Chancellor

Tribunal may hold a Pre-trial Review (PTR) to give directions on what evidence to be exchanged between parties by which date, and to agree number of witnesses who will be attending to give evidence

If hearing going ahead, parties will exchange documents and witness statements and attend on date set

Question 5

What types of disputes might you consider using the FTT for residential property?

Answer 5

What SCs should be recoverable by landlord / managing agent from the residents

Whether residents should have the right of first refusal in purchasing freehold interest if landlord = planning to sell investment of the property;

Price to be paid by the resident(s) when an extension of the leasehold interest is being sought from landlord;

Removal of the current managing agents (due to poor performance / other reasons);

Disputes over the landlord’s choice of insurance company;

Proposed variations to leases currently in force between the parties

ETC.

Question 6

What is a Valuation Tribunal (VT)?

Answer 6

Determines appeals against business-rating assessments brought by ratepayers for;

• commercial premises and;
• appeals against council tax banding by residential homeowners/taxpayers

Question 7

What is the process of a Valuation Tribunal (VT)?

Answer 7

Business rate / council tax payers unhappy with their rateable value / council tax banding should contact the VOA

Should seek to agree a settlement without the need to refer the case to the VT

Business rate payer will make a proposal to the VOA valuation officer including specific amount that he believes the rateable value should be

If matter unsettled within 3 months then valuation officer is obliged to refer case to the VT

Question 8

What is the Upper Tribunal (Lands Chamber) (formerly known as the Lands Tribunal)?

Answer 8

Specialist body to determine disputes concerning land and its jurisdiction

Where the Tribunal considers the case uncomplicated, a surveyor acting for a party is permitted, with consent of Tribunal, to represent that party as both advocate and expert witness

Can cause problems for surveyor and tribunal, as it must be made clear when surveyor is advocating the client’s position

Question 9

What are the THREE types of property cases that can be referred to the upper tribunal?

Answer 9

Disputes over values of damages in land compensation and compulsory purchase orders

Determining whether to remove (or modify) restrictions on the use of land (restrictive covenants)

Appeals against decisions of the First-Tier Tribunal (Lands Chamber)

Question 10

What are the TWO categories of upper tribunal members?

Answer 10

surveyors and legally qualified members

judges are a mixture of High Court judges and circuit judges

Question 11

What are the TWO types of courts which handle disputes?

Answer 11

o County Courts

o High Court

Question 12

What does the County Court do?

Answer 12

County Courts = lowest level of courts to deal with civil disputes.

Present in most large towns and cities across England and Wales.

Some of the larger county courts have jurisdiction over bankruptcy cases and some deal with non-property matters, such as family cases involving children.

Question 13

What are the types of civil disputes which are dealt with by the County Court?

Answer 13

 claims that a party owes another sums of money (a debt);
 breaches of contract between parties;
 claims involving personal injury suffered by a party;
 removal of squatters from land and buildings
 Repossession of properties due to non-payment.

Question 14

What does the High Court do?

Answer 14

High Court / High Court of Justice (formally known) = higher of the 2 courts dealing with first-instance civil cases (not appeals)

Unlike county courts, there is only one High Court with divisions = district registries e.g. High Court case heard in Manchester will be referred to High Court of Justice Manchester District Registry and not, as would be the cases of a county court, Manchester High Court.

Question 15

What are the TWO divisions of the High Court dealing with property disputes?

Answer 15

Chancery

Queen’s Bench – also includes a specialist court = Technology and Construction Court (TCC), which hears property disputes, and whose judges are former barristers specialising in construction and property

Question 16

What are the alternative methods of dispute resolution (refer to previous notes for some techniques)?

Answer 16

o Independent expert determination
o Arbitration
o PACT appointments for lease renewals

Question 17

What is PACT dispute resolution?

Answer 17

PACT = Professional Arbitration on Court Terms

Scheme administered by RICS and Law Society where disputed lease renewal terms = settled by surveyors and solicitors

Alternative to county court proceedings where a lease renewal is unopposed by landlord (usual route for settling disputed lease renewals = application to the local county court) BUT problem with county court judges = they are rarely property experts

Although scheme is a form of ADR, it produces a legally binding decision

Question 18

Under the PACT scheme, what are the FOUR choices of third-party decision-maker?

Answer 18

 a surveyor acting as an arbitrator;
 a surveyor acting as an independent expert;
 a solicitor acting as an arbitrator; and
 a solicitor acting as an independent expert

Question 19

What does non-binding mean?

Answer 19

Refers to resolution processes that do not end with a result or a decision that binds (forces), the parties to accept it

Each party can decide to walk away from dispute resolution at any stage of the process

Question 20

What non-binding dispute resolution approaches are there (refer to previous notes for these approaches)?

Answer 20

o Negotiation
o Mediation
o Early neutral evaluation

Question 21

What binding dispute resolution approaches are there (refer to previous notes for these approaches)?

Answer 21

o Arbitration
o Med-arb dispute resolution
o Independent expert determination
o Litigation
o Land Registration division of the Property Chamber of the FTT
o Housing Grants, Construction and Regeneration Act 1996 adjudication

Question 22

When should you make a dispute claim?

Answer 22

One of the first should be if it is worthwhile spending the time and money needed

Not unusual for parties to later regret either bringing case / defending the claim after time needed, costs, fees and charges = greater than assessed at outset

Question 23

What is the difference between a publicity averse potential claimant and a publicity averse potential defendant?

Answer 23

Publicity averse potential claimants: When potential defendant = faced with claimant who immediately suggests ADR without mention of litigation

Publicity averse potential defendants: A defendant with high profile and reputation to uphold = wish to avoid claims from becoming public, but claims for an alleged
debt can have particularly harmful on a reputation. Therefore, a potential claimant, who is aware of this can take advantage of it.

Question 24

What alternative actions can be taken to disputing a claim?

Answer 24

Part 24 application under Civil Procedure Rules - to be considered at same time as applying for security for costs. Part 24 allows for either party to seek a swift disposal of the case without the need for a trial and without the need for any expert evidence.

Calderbanks and/or Part 36 - offers to settle are made by either party to dispute with intention to protect that party from costs. Often a dispute has been going on for some time and intention is to bring the dispute to a swift conclusion.

Do nothing - may appear risky, but it could be a sensible approach. Can call bluff and avoid costs.

Question 25

What should be considered with false and fraudulent claims when disputing a claim?

Answer 25

False / fraudulent claims occur most often in service charge and dilapidations disputes because of large capital sums involved

Sanction - criminal charge under the Fraud Act 2006, where Section 2 makes it offence to dishonestly make a false representation with intention of making a gain for oneself, or to cause another party to suffer a loss or be exposed to the risk of a loss

Question 26

What are the THREE classes of misrepresentations in civil law?

Answer 26

1. innocent misrepresentations, where maker of the statement is said to have some reasonable grounds for believing the statement to be true
2. negligent misrepresentations, more serious than (1), caused by negligence by the maker of the statement
3. fraudulent misrepresentations, defined in Derry v Peak (1889) as ‘a false statement made knowingly / deliberately / without belief in truth - / recklessly without caring whether it was true or not’