Mediation in the market place

Mediation in the Market Place

Take a prosperous provincial city with a retail economy that has more or less survived the economic downturn. Zoom in on a Covered Market in the centre of that city owned and managed by the Local Council. It’s more than 200 years old and is a Grade 1 Heritage asset. Parts of the market, particularly the fresh food sections, are doing well and are supported by local businesses and the more well heeled citizens.

How does that all sound? Part of Olde England adapting to the 21st Century? An iconic setting that caters for a wide variety of customers? A stronghold for an independent and local retail offer?

That’s certainly how it has been for many years, but I can tell you that it is currently in a bad way and in need of refurbishment, as much mental as physical. Why?

Well, neither side is blameless. The Council regards the market, along with its other properties, as a major source of income and ignores its additional significance as a civic asset. Many of the traders, who have invested in the leases, see the Council as responsible for all ills, even if some of them may be of their making.

And then there’s the more intractable problem of the landlord and tenant structure: there are more than 50 traders. Each has fifteen year renewable leases and every five years there are rent reviews. Since 2002 these have involved not face to face discussions between Council and Traders but recourse to agents, described as “independent” and “expert” who produce two widely divergent views of what the new rents should be. A few, very few, traders accept the Council figure; the majority don’t. After a year of wrangling they go to arbitration for a sample number of units on the understanding that the award will then be used as the basis for settlement for the remainder. So far, so not very good. A cumbersome process that leaves both sides feeling aggrieved.

This time, matters are even worse. The Council announces their new rent requirements in April 2012. The Traders produce their own much lower figure. The arbitrator starts his work in March 2013 and publishes his award, predictably in the middle of the two earlier figures, in December. But wait! One of the traders claims there is an error in the maths leading to the award. Oh yes, so there is, says the arbitrator who, two months later, produces a new lower award. The Council, while accepting that the new award is binding for the five units, says the arguments behind them are flawed and refuses to accept them as the basis for the remaining units. They send a letter to the individual traders “offering” a 3x% increase. The traders take out full page advertisements in the local press retaliating with an x% increase. Press Releases, more advertisements and, two years after the new rents should have been agreed, there is still stalemate.

Enter a councillor who is part of a committee panel charged with looking at the long term future of the market and of how to improve the relationship. Though it forms no part of his Council brief he is also a mediator. At last we’ve got there!

Meetings with both sides. What have you got to lose? Will it really help to go back to arbitration? Importance of helping to shape a settlement rather than having it imposed? A resolution within weeks rather than months?.

Prospects of success? Maybe 10% when I’m feeling optimistic.

Jim Campbell CEDR Accredited and Oxfordshire Community Mediation Accredited Mediator, BA (Hons), Elected City Councillor and Programme Director Global Mediation