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EXPENSIVE ADVICE

LEGAL

From time to time here in chambers we are asked to advise friends about problems with their builders, writes Kim Franklin. This is always a tricky one to deal with.

We have been doing this job for long enough now to know that only the deranged, badly advised or fabulously wealthy involve themselves in building disputes if they can possibly avoid it. For corporate concerns, litigation - and its alternatives - is a commercial tool operated with commercial objectives.

For individuals it is a different matter entirely. The law reports are littered with casualties of the process. Never forget that a person of principle is a blank cheque to a lawyer.

On the other hand, it is jolly frustrating when you believe your builder has lied, broken every promise ever made or left you without a damp-proof course. What to do?

Good advice and sound judgement are the secret to success in such circumstances.

The truth is that if there is less than £50,000 at stake it is just not worth the candle. Sort it out. If you can't, better to bite the bullet and put it down to experience than to embroil yourself in litigation.

The point was brought home again by the Court of Appeal in the recent case of Burchell v Bullard (judgment 08.04.05). The builder, Burchell, claimed £18,500 from the Bullards for extension works. They claimed the work was defective and counterclaimed remedial costs of £100,000. Burchell suggested mediation with 'a qualified construction mediator'.

The Bullards, advised by a building surveyor, believed that the dispute was 'technically complex' and that mediation was 'not an appropriate route' to settlement. Three years, and a five-day trial later, their counterclaim was found to be worth less than £14,000.

The builder had recovered the balance of some £5,000.

But at what cost?

The Court of Appeal described the costs position as 'horrifi c'. The builder's costs were about £65,000;

the Bullards' £70,000. A roofing subcontractor who had been joined to the proceedings and found liable to the tune of £79.50 had run up costs of £27,000. A total of £185,000 had been spent to recover a judgment of £5,000.

The Appeal Court endorsed the judge's findings that, while there were faults on both sides, the Bullards had been more unreasonable in their conduct of the litigation.

A small building dispute was, par excellence, the type of case that lent itself to alternative dispute resolution and the reasons for rejecting mediation were 'plain nonsense'.

Nevertheless, the court shied away from penalising the Bullards for their approach, which they adopted on the advice of its building surveyor.

They had enjoyed some success on their counterclaim, even though it was only 15 per cent of what was claimed.

Ultimately the court held that the Bullards should pay 60 per cent of both the builder's and the roofer's costs and the costs of the appeal, totalling about £67,000.

In passing, the court queried whether the defendants had been fully advised as to the risks involved in their approach to the dispute. Like I said, good advice is the secret to success.

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