BOROUGH OF POOLE
REPORT TO THE CABINET
5 OCTOBER 2004
DOLPHIN QUAYS – ALLEGED ENCROACHMENT
PART OF PUBLISHED FORWARD PLAN: NO
STATUS: EXECUTIVE POLICY
1.Purpose and Policy Context
1.1To advise Members of the arrangements for Mediation of the claim by the Council against Poole Developments Limited and Quay Developments Limited (both in Administrative Receivership), for compensation in respect of alleged encroachments onto the Council’s land adjoining Dolphin Quays.
2.Recommendations
2.1That Members note the proposed arrangements for seeking to secure the resolution of this dispute through Mediation, and note and confirm the Chief Executive’s authority to agree a binding mediated settlement if one can be achieved.
3.Background
3.1On 27 January 2004 the Cabinet received a report on a dispute between the Council and the Administrative Receiver for Poole Developments Limited and DolphinQuays Developments Limited concerning the alleged encroachment of the Dolphin Quays development both beneath and above the Council’s adjoining land.
3.2At their meeting on 22 July 2004 Members of the Cabinet were further advised that in spite of negotiations, the positions of the Council and the Receiver remained wholly at variance and it was clear that they could not be narrowed through further negotiation directly. Counsel for both the Receiver and the Council had therefore both concluded that there be some form of alternative dispute resolution put in place with a view to settling the dispute, and Cabinet, accepting that advice, resolved that the matter be referred to a Mediator in the hope and expectation that mediation would lead to a negotiated settlement.
4.The Mediation Process
4.1Following the Cabinet decision on 22 July, discussions took place between the Receiver and Council representatives and their respective Counsel in order to agree the identity of a suitable Mediator and the process to be followed. The mediation is now set to take place in London on 6October (the day after this Cabinet meeting) before a Mr Stephen York, - a Mediator in whom both Counsel have confidence. MrYork has a wealth of experience as a Mediator in construction and property matters, has appropriate legal qualifications and is said to have a success rate of over 90% in reaching settlements.
4.2The Mediator’s role is to consider representations and evidence and to use his skill and experience to lead both parties to agree a fair and just settlement. As a Mediator, rather than an Arbitrator, he cannot impose a settlement but it is an essential term of the agreed mediation process that each party has someone present who has the position and authority necessary to be able to agree, on behalf of the parties in dispute, any negotiated deal which may come forward during the course of the mediation. The Chief Executive will be attending the mediation, supported by me and other Council officers, Counsel and the District Valuer, and Cabinet is asked to note and confirm, for the avoidance of doubt, that the Chief Executive will have the authority to be able to make a binding agreement to accept any suitable terms which may be negotiated. Cabinet may wish to consider any guidance it may wish to give the Chief Executive as to the way in which this power should be exercised on the day.
4.3As for events on the day, the mediation process is not covered by rigid pre-defined rules, and Mr York, (who will have seen all relevant documentation in advance) will use his experience to structure the presentation of evidence by both parties and facilitate negotiations between them in the manner in which he believes to be most productive. If, and when, both parties agree on a settlement, this will be recorded in writing, signed by the persons authorised to bind the parties, and will then become a legally binding commitment, enforceable in the Courts. The Mediator’s costs will be shared equally between both parties, provided agreement is reached, but if no agreement is reached and the matter goes to court, the costs of the mediation are included in the costs to be paid by the party who loses the action ultimately.
5.Conclusion
As was highlighted in the report in July, the outcome of any legal property dispute can never be guaranteed. As Members accepted at that time, given clear and diametrically opposed advice received by the Council and the Receiver as to the Councils right to be compensated for the encroachment, and the fiduciary duty owed by the Council to council taxpayers and by the Receiver to creditors, there was really no choice but to pursue the claims to conclusion. The mediation should secure the closure of the dispute in a speedy and cost effective manner whilst demonstrating that whether final the payment agreed is large or small, it is a payment which can be shown to be justified as the right one in the circumstances.
C H Eames
Head of Legal Services 23 September 2004
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