Dilapidations

In this issue, we look at the Dilapidations protocol currently in draft form that should govern dilapidations cases.

One of the main aims behind the Civil Procedure Rules was the resolution of disputes without the necessity of litigation wherever possible. In addition, the Civil Procedure Rules envisaged that if litigation was unavoidable, it should be conducted with a view to encouraging settlement at the earliest possible stage.

One of the changes made by the Civil Procedure Rules was the introduction of pre-action protocols. The protocols set out the steps that each potential Claimant and Defendant ought to take prior to the issue of proceedings. In his 1996 Access to Justice Report, Lord Woolf identified the purpose of these protocols as being “to build on and increase the benefits of early but well informed settlements which genuinely satisfy both parties to a dispute”.

The draft dilapidations protocol which has now been produced deals with damages claims arising from breaches by tenants of repairing obligations in leases at the expiry of the lease. The text of the protocol has been agreed with the Royal Institution of Chartered Surveyors.

The theory behind the dilapidations protocol is that it should encourage a landlord and a tenant to embark upon meaningful negotiations as soon as the possibility of a claim is identified. The parties’ advisers can use the information which must be provided under the protocol to gain an early understanding of the strengths and weaknesses of an opponent’s case, so as to enable them to make realistic Part 36 Offers, thereby putting as much pressure as possible on an opponent as soon as possible in the hope that a settlement is achieved before costs become disproportionately high.