Mediation or Litigation?

Landlords and tenants of agricultural holdings operate against the background of around 100 years of agricultural holdings legislation which regulates the relative rights and responsibilities of both parties. Given the complexity of the legislation and the number of issues where disagreement can occur, it is unfortunately not uncommon for disagreements to escalate to a point where a resolution cannot be arrived at and where the relationship between landlord and tenant is at risk of becoming fractured.

At this point one or both parties may resort to litigation, with an application for the issue to be determined in the Land Court. This can be an expensive, antagonistic and time consuming exercise which does little to promote a good working relationship between the parties so there is increasing interest in using alternative dispute resolution methods to resolve disputes.

Mediation can be a highly effective way of reaching agreement. Unlike arbitration or expert determination, the mediator does not determine or recommend a solution but works with the parties to help them reach a position that both can accept. Mediation involves a third party, the mediator, with no vested interest in the outcome, to help parties reach a mutually acceptable outcome. Mediation can address legal and non-legal issues and evolves as the process develops – encouraging parties to think differently in order to find an acceptable outcome. Mediation works because both parties are heavily engaged in the process and take responsibility for trying to resolve their dispute. The process is flexible and voluntary, so either party can walk away at any point if they feel that an outcome cannot be reached. 

I am keen to encourage landlords and tenants to consider mediation when a difficult dispute arises or when the landlord/tenant relationship breaks down and communication becomes difficult. To that end, the Scottish Land Commission runs a mediation scheme which provides support to parties seeking to use mediation. The scheme provides access to a panel of approved mediators and makes a contribution to the mediator’s fees. Mediation can just involve the landlord, the tenant and the mediator but either party may choose to bring support in the form of a lawyer or agent or just a friend. In the first years of the scheme the Land Commission covered the full cost of the mediator(s) and 3 long running difficult relationships and disagreements were successfully resolved, with the parties involved being generally happy with both the outcome and the process. The current scheme provides a financial contribution of up to £1000 plus VAT towards the mediator’s costs with the parties being responsible for the cost of any professional advisers that they choose to involve in the process.

We are currently reviewing how the scheme works and there may be some changes to the rules in the future but we are keen to continue to support mediation and to encourage its use by landlords and tenants of agricultural holdings. Full details can be found on the Tenant Farming page where you can also view a video recording of a mock mediation to get a feel for what is involved. You can also contact Peter MacDougall on peter.macdougall@landcommission.gov.scot  to discuss the scheme further.