Bruce Duncan, a practicing surveyor, flanked by two solicitors, provided an enlightening summary of their experiences of arbitration within the field of commercial property rent reviews.

Lesley began by saying that arbitration had become an unpopular method of dispute resolution. Generally the public regarded it as too long-winded and complex for the majority of commercial contracts. Arbitration remains however the most common method of resolving disagreements between landlords and tenants when a revised rent is to be determined.

The majority of cases are dealt with by written representations and whereas, in the past, the arbitrator had to resist the urge to introduce his own expertise to achieve a fair result, the 1996 Act now permits such intervention with the parties prior approval. A change very much welcomed amongst the professionals.

Similarly the need to treat hearsay evidence as inadmissible no longer applies; indeed, it has been argued that word inadmissible is now something of the past. Any information can now be presented to assist a fair resolution of a case. It is merely a question of what weight should be attached to it.

The 1996 Act also requires an award to be accompanied by reasons, something that does not always suit the parties. It remains to be seen whether the facility to request an award without reasons will be commonly taken up.

The issue of determining responsibility for costs through use of Calderbank letters has been unsatisfactory, because in rent reviews, a band of values can apply. It is hoped therefore that s.61(2) will introduce some badly needed flexibility into the process.

Lesley considered the climate was now right for arbitration to retrieve much of its reputation in rent reviews process.

Bruce Duncan followed. He commended the new legal framework for its flexibility. Arbitrators can now make every effort to achieve at least some agreement between the parties, who can often be emotionally highly charged. In 1990 the RICS processed 17,800 applications for appointment of arbitrators. This fell to only 4,800 in 1994 with the recession in the property market. For 1997/98 the total is likely to be around 8,000 and can be expected to rise dramatically as rising rental values permit more and more rent reviews to be implemented. The move towards shorter leases will however result in a much greater number of lease renewals and the recent moves towards using arbitration as the method of resolving disputes rather than the County Court are welcomed.

Also welcomed are new guidance notes published by the RICS for surveyors acting as expert witnesses and for interpreting comparable evidence.

John Butler finished the session by saying the 1996 Act had been well received by all those involved with rent reviews. However, property professionals had yet to come to grips with it. Inquiries into customer satisfaction, carried out by the RICS, record 42% who described arbitration as "a good process" and 33% regarded it as "excellent".

Concern was expressed over the loss in expertise amongst surveyors and the legal profession during the years of recession and the need to train a new generation of rent review professionals.

A new member and prompt contributor to News & Views, Peter is a chartered surveyor and a partner of Weatherall Green & Smith at their Chancery Lane office. He specialises in the management of commercial property portfolios on behalf of large institutional landlords. He has carried out numerous rent reviews and lease renewals over the last 20 years, some of which have been referred to the decision of an independent Expert or an Arbitrator, where a negotiated settlement has not been possible. He is married, has three children and lives in Hildenborough in Kent, where he is also a churchwarden.