Conflict Avoidance, Management and Dispute Resolution Procedures (L1M) Flashcards
What is a conflict on interest?
A situation which an individual/company has competing interests or loyalties
When do conflicts exist?
- Independence and impartiality is materially affected
- Financial / Personal / Commercial / Dual Agency
How can conflicts be managed?
- Avoidance
- Written advice to both parties - nature of conflict and proposals, clear and concise. Request permission (informed consent)
- Set up conflict management procedures
- Firms must have effective checking and handling procedures in place (Mark England?)
What is the difference between a conflict and a dispute?
- Dispute = short-term disagreement that can result in the disputants reaching some sort of resolution; it involves issues that are negotiable.
- Conflict = long-term with deeply rooted issues that are seen as “non-negotiable”
RICS Conflicts of Interest Professional Statement 2017
3 types of conflict:
- Party - conflicts party acted for
- Own interest - conflicts own personal interests
- Confidential information - have to keep confidential information from client (information barriers)
- Informed consent must be given
- Must be in interest of all parties
RICS Conflicts of Interest - UK Commercial Property Market Investment Agency Professional Statement 2017
- No dual agency (act for buyer and seller)
- Multiple introductions allowed if on a ‘non-exclusive basis’ - informed consent from all parties
- Incremental advice allowed - information barrier in place
- Personal interests must be declared & remuneration stated
Is there any RICS guidance on Complaints Handling?
Yes - RICS Complaints Handling Procedure Guidance Note, 2016
What does the RICS Complaints Handling Procedure Guidance Note (2016) state?
- Keep Terms of Engagement accurate and clear, with CHP outlined
- CHP should be:
a. Fit for purpose (size of company)
b. Available to all staff and potential complainants
c. Regularly reviewed
d. Agreed with PII provider
What is your firm’s Complaints Handling Procedure?
- Written complaint to Mark England (C10) - reports on action taken
- Written complaint to Etienne Prongue (Senior Director)
- Written complaint to Ombudsman
What are the key principles of Negligence?
- Surveyors have reasonable duty of care to clients and parties
- Must use ‘reasonable care and skill’
- Negligence - breach of this where damages arise
- Limitation Act 1980 - 6 years from date of negligent act - 3 years from knowledge that claim was possible - 15 year longstop date
- Margin of error can vary
What are the different types of Alternative Dispute Resolution?
- Negotiation
- Mediation - neutral who facilitates discussion between parties
- Independent Expert Determination - appointed by two parties, undertakes own investigations both parties bound by decision, can be sued, issues determination.
- Arbitration - provide information to, limited right of appeal to High Court - not liable for negligency, powers of disclosure, bound by decision - cannot be sued
- Early neutral evaluation - independent, non-binding opinion
- Ombudsman - confidentially receives details and instigates resolution of complain
What are the benefits of Alternative Dispute Resolution?
- Speed
- Informality
- Greater opportunity for negotiation
- Cost
- Quality of decision making
- Confidentiality
Arbitrator vs Independent Expert
Arbitration: • Decision based on submissions of the parties • Needs parties to submit evidence • Cannot be sued • Issues an ‘award’
Independent Expert:
• Does not have to reach compromise – uses own knowledge and expertise
• Can be sued for professional negligence
• Issues a ‘determination’
What RICS document relates to expert witness?
RICS Surveyors acting as Expert Witness Practice Statement (2014, amended 2020):
- Duty to the courts, even if client pays fee - can be sued for negligence (Jones v Kaney 2011)
- Must not be conflicted - no incentive fees allowed
If you wish to accept an instruction with a conflict, what should your written advice to both parties include?
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