Cost of dispute


Derek Inkpin from local solicitors Axiom DWFM looks at how legal costs can spiral in cases like boundary disputes and urges the use of a mediator where possible

Unless you have won the lottery, the legal costs of getting involved in a dispute as either a claimant or defendant will be of great concern. Referring a dispute to a mediator can be a great boon, not least the court costs it saves on a successful outcome.

The parties concerned can feel fully engaged in the process. However, a mediator is not a judge and all they can do is encourage the resolution of the dispute by mutual agreement. A mediator does not make orders as does a court. A court decision in favour of a winning party can be a great outcome but can be a disaster financially for the loser. 

There is a 2021 case called Davis vs Winner involving a boundary dispute where the trial judge was informed that the combined costs of both parties were about £200,000. What was of great concern to the judge was that the case involved an allegation of 17 inches of boundary encroachment against a neighbour arising from the installation of two boundary garden fences. At an early stage, as in any civil court case, the district judge decides which ‘track’ is to be allocated and this is determined by the complexity of the matter. In the Davis case, this was allocated to the multitrack and in so doing affected the costs to be incurred. 

What the trial judge said was that to the outside observer, the extent of the boundary encroachment in terms of monetary value was not great. The judge made clear that where the value of the claim in monetary terms was unlikely to exceed £10,000, then if the parties both agreed, the case should be allocated to the small claims track where the costs to the loser would normally be restricted to court fees and witness expenses. 

The small claims track therefore minimises the financial risk to the parties, and in the Davis case would have concentrated the parties’ minds on not incurring the combined £200,000 fees.

However, boundary disputes can involve a complexity of facts, law and expert evidence, which may take two to three days to conclude and conventionally this will likely take it outside the small claims track to the multitrack, which incurs substantial costs. An important issue in these low-value cases is whether the court can save the parties’ costs by allocating it to the small claims track. However, if it is argued at an early stage that the legal and other issues are complex, then allocating the case to another track with no cost protection to the parties will likely be the outcome. And this is when a mediator could help save a fortune.

Axiom DWFM is located at 9–13 Cambridge Park, Wanstead, E11 2PU. For more information, call 020 8215 1000

Author: Editor