The Law Society and the Royal Institution of Chartered Surveyors (RICS) have recently launched the PACT (professional arbitration on court terms) scheme as an alternative to courts determining lease renewal terms and rent for commercial properties.The PACT scheme enables landlords and tenants jointly to elect to have the rent and the terms of their new lease determined by either a solicitor or surveyor acting as either an arbitrator or an independent expert.

The appointments will be made by the Law Society or the RICS in the same way as arbitrators or independent experts are currently appointed by the two organisations.The PACT scheme preserves the landlord and tenant's existing rights under part II of the Landlord and Tenant Act 1954, as it will still be necessary for an application to be made to the court, but the parties will then agree to use the PACT scheme.It may still be appropriate for the courts to deal with some complex legal issues and prospective participants should consider whether the PACT scheme is suitable for their particular dispute.The scheme is in line with the Woolf proposals as set out in Access to Justice in that court litigation should be regarded as the last resort.Advantages of the schemeChoice: When the rent or terms cannot be agreed upon renewal of a lease then the parties may elect to have the new terms decided under the PACT scheme, if the rent is in dispute then it is likely that parties will wish a surveyor to be appointed.

But if the terms are in dispute then a solicitor might well be selected.

If both terms and rent are in dispute then the parties can choose first to appoint a solicitor (to decide the terms) and secondly a surveyor (to decide the rent).

Alternatively, a surveyor or solicitor could be appointed on the basis that an adviser would also be appointed on an area which was outside that person's specialism.The choice of procedure relevant to the particular matter is important.

Arbitration procedures can range from short written submissions to hearings with advocates.

An independent expert need not, in some cases, receive submissions.Flexibility: The scheme is not cast in stone and where necessary can be developed and adapted by the parties according to the specific needs of their particular case.Speed: Delay may be one of the main problems of proceeding to court for determination.

Both arbitration and independent expert determinations can proceed very rapidly to a conclusion following the appointment.Lower cost: Although fees will be payable to the arbitrator or independent expert, streamlined and/or informal procedures should ensure that the total costs are reduced.Decis ion by an expert: The surveyors and solicitors available for appointment have:-- Specialised in landlord and tenant and arbitration for many years and will be able to make sound decisions;-- Attended specialised training courses-- Come from all areas of England and Wales to ensure that, when appropriate, they will have the necessary local knowledge.What you have to doWhilst it is necessary to observe the time limits imposed under the 1954 Act, an essential part of the scheme is the exclusion of the jurisdiction of the court over those matters which are to be determined by the arbitrator or independent expert.Where it is necessary to comply with the renewal provisions of the 1954 Act then the tenant will first apply to the court in the normal way and the parties will consent to refer the dispute to arbitration or independent expert determination by way of consent orders.

Model consent orders are available from the Law Society or the RICS.These have been drafted on the basis that any issues in connection with the renewal which are not to be referred to arbitration or to an independent expert will either have been agreed between the parties or decided through the courts before the consent order is made.

The form of consent order must be approved by the court in which the application for a new tenancy is made.The steps to be taken ......

when renewing a lease under the PACT scheme are:1.

Make an application to the court for a new tenancy in the normal way.2.

Decide with the other party whether to refer aspects of the lease renewal to a third party solicitor or surveyor rather than to a judge.3.

Identify which aspects of the renewal (if any) are agreed.4.

Decide which aspects to refer to the third party, eg:-- the interim rent-- the new rent-- other terms of the lease-- the detailed drafting of terms-- a combination of these5.

Choose which aspects are to be resolved by a third party solicitor and which by a third party surveyor.6.

Choose the third party's capacity -- arbitrator or independent expert.7.

Draft the court application making use of, or adapting, PACT model orders.8.

Apply to the court for consent.9.

Apply to the Law Society or the RICS for the appointment of a person to adjudicate (if not agreed between the parties.10.

Proceed with the adjudication.11.

Receive the award, subject only to cooling off rights, and in arbitration, any right of appeal.The Department of the Environment and the Lord Chancellor's Department have been consulted on the scheme.

Consumer user groups representing major landlords and tenants have also been consulted and have responded positively.The scheme has been designed and developed by the Law Society and the Royal Institution of Chartered Surveyors and is supported by the Incorporated Society of Valuers and Auctioneers.

Its aim is to offer landlords and tenants choice and to provide an effective and flexible alternative to court proceedings for determination of the terms and rent payable upon lease renewals of commercial property.HelplineTelephone helplines have been established by both the Law Society and the RICS.

Enquirers may receive up to half an hour's free advice from a surveyor or solicitor registered under the scheme.Further details of the PACT scheme and application forms may be obtained from either the Law Society's arbitration service at 50-52 Chancery Lane, London WC2A 1SX; DX56 Lond/Chancery Lane; tel: 0171 242 1222, fax: 0171 320 5918, helpline: 0171 320 5698; or from the dispute resolution service of the Royal Institution o f Chartered Surveyors, Surveyor Court, Westwood Way, Coventry CV4 8JE; DX 702112 Coventry 6; tel: 0171 222 7000, fax 0171 334 3802, helpline: 0171 334 3806.