Rent Repayment Orders Part 3- Alternative Dispute Resolution
This is the final blog post in my series on rent repayment orders (or ‘RROs’). In this post I will discuss the benefits for parties in engaging in Alternative Dispute Resolution in rent repayment order proceedings. Part 1 gave an introduction to rent repayment orders and Part 2 looked at the Tribunal’s approach to these cases.
The Tribunal’s Role in Alternative Dispute Resolution (“ADR”)
The overriding objective for the Tribunal under the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 is to deal with cases fairly and justly. This includes, along with other considerations, avoiding unnecessary formality and seeking flexibility in proceedings.
The procedure rules directs the Tribunal in appropriate cases to bring to the parties attention the availability of any appropriate alternative procedure for the resolution of the dispute, and to facilitate the use of alternative dispute resolution where the parties agree and it is in accordance with the overriding objective.
Parties Roles and Forms of ADR
Parties are also required to help further the overriding objective and co-operate with the Tribunal. It is therefore worthwhile for parties to consider whether ADR is suitable in RRO proceedings as it enables the Tribunal to operate efficiently.
There are various forms of ADR in civil cases but landlords and tenants may choose to adopt either one more of the following in RRO claims at any point during the proceedings:
- Negotiation – this is when the parties try to do a deal themselves, sometimes with legal representatives acting for them;
- Arbitration – this involves an independent person appointed by the parties deciding the case; or
- Mediation – this means that a neutral person will assist the parties to find common ground and reach a deal.
Benefits of ADR
The use of ADR and in particular, negotiation, is becoming increasingly popular as it enables parties to conclude matters more quickly and at a much lower cost for the landlord. There are various advantages to utilising ADR in RRO claims and these include:
- Parties are actively encouraged by the Tribunal to attempt to settle their disputes outside the Tribunal where they can. This assists with parties resolving their disputes promptly and avoids the need of preparing for a lengthy and expensive hearing.
- Parties can agree settlement terms which cannot be ordered in Tribunal proceedings and keep matters confidential. Tribunal decisions are often available on the internet and are therefore publicly accessible. This could have a reputational impact on landlords, particularly, where criminal conduct is alleged. Through ADR, parties can agree to keeping matters confidential.
- If the tenant alleges a criminal conduct by the landlord then a landlord could risk any admission or finding by the Tribunal of the offence being used as evidence in prosecution proceedings. If a case is settled through ADR, the Tribunal will not be called on to make such a finding and landlords could avoid the finding that they committed a criminal offence.
- It is less time consuming and more cost effective. Due to the recent Covid-19 outbreak, Tribunals are no longer conducting face to face hearings and are only conducting hearings through video and teleconferences. Therefore, Tribunal may experience an unprecedented backlog of cases which could prevent RRO claims from progressing quickly and efficiently. Parties could find themselves waiting for an uncertain amount of time for directions to be issued and their cases to be listed. Parties may want to instruct a legal representative for advice on the claim, comply with the directions, prepare a witness statement and a bundle of documents with supporting documents. Compiling multiple copies of the bundle may be time consuming and could add to a landlord’s legal costs which cannot be recovered from the tenant. By choosing to settle through ADR, parties avoid the timely and costly preparation for trial.
- A tenant could receive financial settlement from the landlord more quickly than they would in the Tribunal. An RRO claim is an application for repayment of money and therefore the tenant’s ability to obtain financial settlement more quickly incentivises parties’ agreement to settle at an earlier stage.
ADR has many benefits and there are many reasons why parties may choose to adopt ADR in RRO proceedings. It is arguably a more economic route for parties to resolving the claim more quickly and efficiently without the intervention of the Tribunal. Parties are entitled to utilise ADR at any stage during the proceedings and with Tribunal’s experiencing delays due to Covid-19, ADR is the only way to achieve settlement. It is important that parties consider using ADR at an early stage during the proceedings, as if any settlement is achieved, it would avoid the need of incurring further costs associated with preparing legal documents.
*Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*