Seek early advice during a dispute…save £200k in some cases!

If there was ever a case that highlighted how seeking professional advice early on could save you a lot of time and cost, then it’s this one. Not only did the defendant go against a written agreement but they drew out the process long enough, took the dispute to court and caused incurrence of over £150,000 in legal fees – leaving them having to pay out nearly £200,000!

Back in 2012, Advertising Executive Miss Thomas bought a flat in London for £315,000. Her long term boyfriend at the time, Mr Powell, didn’t have enough capital to buy the property jointly, so promised to use his building trade skills to renovate the flat which was described as ‘uninhabitable’.

Prior to the couple splitting up, it’s believed Miss Thomas’ mother asked Mr Powell to sign an agreement to protect her daughter, which said that he’d be entitled to a third of the profit from the property if they were ever to split up. Mr Powell says he discussed the contract with Miss Thomas and they both signed it, however, she said that she was never aware of the agreement put forward by her mother (something which the Judge didn’t believe) and when she found about it, the contract was destroyed.

Potential settlement and costs

Mr Powell spent more than £14,000 on materials to renovate the flat, not including his own time and labour. When the couple split up in 2014 the flat had increased in value to around £450,000. Messages exchanged between the couple after the break up show that Miss Thomas knew about the agreement and was willing to stick to it, according to the Judge.

With a healthy profit on the property, Mr Powell should have been entitled to approximately £45,000 in accordance with the agreement. It’s reported that Miss Thomas turned down a settlement offer of £35,000 and decided instead to fight her case in court.

The Judge ruled in Mr Powell’s favour and he now looks set to get what he’s entitled to. Miss Thomas on the other hand will have to hand over a third of the profit from the sale alongside paying the her own legal fees and costs ordered against her which all together total up to almost £200,000.

The moral of the story

This is a very sad case indeed and has cost two young people an awful lot of time, effort and money to sort out.  With hindsight Miss Thomas is likely to regret taking her dispute to court when offers to settle had been made.  Alternative dispute resolution (ADR) is also available in a dispute and can allow the parties to agree with terms that a court would not order. ADR is a much more efficient and cost-effective process.

The moral is that receiving early advice and carefully considering alternative means of dispute resolution will often benefit both parties.

Our specialist Dispute Resolution team can give you an honest and expert assessment of your dispute and help you work out a way forward. To speak to me or another solicitor in our team, get in touch by calling 0343 507 5151 or emailing enquiries@gorvins.com.