Dilapidations in Scotland: how should a court reporter deal with items that are agreed?

Most dilapidations claims in Scotland are resolved without the need for court proceedings. But where cases do end up in court, it is increasingly common for the court to appoint a reporter – usually a building surveyor – to determine certain aspects of the dispute.

Even in dilapidations claims that require litigation, the parties will usually agree on at least some of the items in the schedule of dilapidations. But is the court reporter bound to accept the parties' agreement on these items, or can the reporter reach their own decision on whether a want of repair exists and/or the cost of putting it right?

That was one of the questions decided by the court in the recent case of Rutland Court Real Estate v Anderson Strathern LLP.

The facts

The action related to a dilapidations claim for a substantial office in Edinburgh. The parties having failed to reach an agreement, the landlord sued the former tenant. The court appointed a court reporter to determine certain parts of the claim.

In particular, the joint remit – which was proposed by the parties and adjusted by the court – directed the court reporter to decide, in relation to each item in the schedule of dilapidations:

1. Whether the want of repair existed at the end of the lease.
2. If so, whether it amounted to a breach of the lease.
3. If so, whether the proposed remedial works were necessary.
4. The reasonable costs of the necessary remedial works.

The schedule of dilapidations included a number of items in respect of which the parties had agreed what remedial works were required and the cost of those works. In his draft report, however, the court reporter did not always adopt these agreed costings. Instead, he made his own assessment of the reasonable cost of the works.

The Landlord complained to the court. It argued that where the parties had agreed on the cost of certain works, the reporter should simply have accepted this in his report.

The decision

The court held that the court reporter was entitled to reach his own view of the reasonable cost of the works, even if that meant he reached a different figure than the one agreed between the parties.

The joint remit tasked the reporter with deciding the four matters set out above, which included the cost of the necessary works. The fact that the parties were agreed amongst themselves did not absolve the reporter of the responsibility of reaching a decision based on his own knowledge and experience.

Is there a way to avoid this?

Yes. The joint remit could have directed the reporter to adopt any costs that had been agreed between the parties. Assuming that the court would approve a remit drafted in this way – and we think that it would - the reporter would have been bound to stick to what the parties had agreed.

Parties in future cases where court reporters are appointed – or where dilapidations disputes are to be resolved by arbitration or expert determination – should think carefully about how to deal with any agreed items in the joint remit. As this case shows, silence on that issue will mean that the reporter is entitled to disregard the parties' agreement and reach their own view on all items, even those not actually in dispute.

For more advice on dilapidations, get in touch with our market-leading Real Estate Litigation team or your usual Brodies contact.

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