Flashcards in An understanding of the importance of independence and objectivity Deck (12)
Which Red Book standard requires independence and objectivity in valuations?
Professional Standards (PS) 2 section 3
What does PS 2 section 3 state in relation to independence and objectivity in valuations?
Members undertaking valuations must act with independence, integrity and objectivity
Any COIs - otherwise written consent from both clients should be obtained before acceptance of instruction and disclosed in TOE and managed appropriately
Members must act within the RICS ROC
Requirement to maintain client confidentiality
Information barrier (Chinese wall) must be put in place
Valuer and firm must act objectively at all times and not be influenced by the client
What is Early Neutral Evaluation (ENE)?
Intended for use before any formal litigation / arbitration = started
Process involves a neutral (the ‘evaluator’) who is unconnected to dispute /either party
Evaluator produces evaluation / recommendation with likely outcomes if dispute goes to court /to arbitrator for a decision (it is non-binding)
ENE = voluntary, confidential and conducted on a ‘without prejudice’ basis
Can be used in conjunction with other DR options
In the UK, ENE = being encouraged by certain courts e.g. the Technology and Construction Court and the Commercial Court
What is the ENE procedure?
Each party makes written submissions, with evidence and supporting documents
Oral hearing may also be arranged
Evaluator can also hold a meeting to obtain further information about issues
The parties and the evaluator decide whether detailed reasons are given
He/she will evaluate evidence and law, bearing in mind the submissions, and produce a recommendation
What are the benefits of ENE?
Take place outside formal court setting and at location and time agreeable to parties
Can be used alongside other ADR measures
Clients decide on route to ENE and what documents/disclosure = needed to get there
In receiving early neutral indication, matters = heard and often resolved earlier, saving significant costs
What are the disadvantages of ENE?
Some may feel it's a risky process where once evaluation = provided, one party may become more entrenched in their views
Adds extra layer of cost to proceedings which do ultimately go to court /arbitration
For cases where position cannot be reached without court hearing = questions advantage an ENE may bring
What are DRBs?
Panels of experts - provide interim solutions that know interests of project in quick and effective manner
Make recommendations rather than binding decisions
Effective dispute avoidance and management for contractual disputes on medium - large scale projects
Purpose = save money, ensure project = delivered on time and on budget, and help maintain relationships
Usually exist throughout duration of contract and can be referred to at any time by any of the Parties
What are the benefits of DRBs?
Involved with project from inception to completion = benefits from ‘hands on’ knowledge and understanding of project
Can help give a decision quickly (as quickly as 30 days after formal request)
Any disputes and decisions = confidential
Expertise – Members of DRB = selected for knowledge and expertise
Prevention – existence of DRB can prevent disputes escalating because Parties = reluctant to be seen making frivolous claims
What are the disadvantages of DRBs?
Quick resolution can be labelled ‘rough justice’
Parties to incur the costs of the dispute board and perhaps external legal counsel
Relatively short proceedings = the process does not always result in full examination of facts as with arbitration /litigation
Determination may reflect a compromise between parties rather than firm, final award
What is med-art?
The same as arbitration
Which Act governs arbitration?
Arbitrations in the UK are governed by the Arbitration Act 1996