Conflict avoidance lv 1 Flashcards
What is a conflict?
A conflict of interest arises in a situation where there may be an actual, perceived or potential risk that the professional judgement and ability to act impartially becomes compromised when undertaking an assignment.
When do disputes arise in your role?
Disagreemenst in HoTs, rent level, contract length, fee basis, tenant and landlord disputes,
What do the RICS Rules of Conduct say about avoiding conflicts of interest?
“Within Rule 1 - Honesty, acting with integrityand complying with professional obligations:
1) Must identify actual and potential conflicts of interest - must not provide advice or service if there is a conflict unless in accordance with COI RICS professional statement.
2) Firms have effective processes to identify potential conflicts of interest”
Give examples of ways that conflict can be avoided.
“When Instruction is first received my first step would be to consider actual, perceived or potential conflict of interest before proceeding with the engagement. I would consider:
- What is the extent of involvement with the client - including the prospect of work in the future. I will consider the actual and potential volume of work and the level of fee income.
- Is there any other involvment with the proeprt. For example is my firm responsible for providing other services at the building ?
- Can the work be completed obejetively and independantly and what are the implications in terms of perception of integrity. “
How can good record keeping avoid conflict?
“1. Clear, concise and careful drafting of contract, lease and/or associated documents
2. Use proactive conflict avoidance risk analysis - understand what could go wrong
3. Managing all parties expectations requires understanding of their objectives and implementing early warning systems
4. Negotiating contractural obligations carefully and transparently
5. Keeping good records with sufficient level of detail can often help to resolve conflicts before they escelate. “
What are the three pillars of dispute resolution?
“1. Negotiation
2. Mediation
3. Adjudication/Arbitration/Litigation”
What is Alternative Dispute Resolution (ADR)?
These are Dispute resolution processes and techniques that fall outside the scope of court litigation.
Why might you prefer to pursue ADR rather than litigation through the Courts?
“Advantages of Alternative Dispute Resolution include:
- Speed - less time than lenghty court proceedings
- Informality - outside a court
- Greater opportunity for negotiation
- Cost - less money than fees for litigation
- Quality of decision making - outcone or award cann be made by a surveyor rather than a judge
- Confidentiality “
What would you do if you identified a perceived/actual conflict of interest?
“1. Conflict Avoidance - Decline the instruction
- Conflict Management - Accept but manange process by putting in palce information and ethical barriers - Must obtain informed consent from all aprties in a transparent manner”
Can you tell me about any RICS guidance relating to conflicts of interest?
“Came into effect 1st January 2018
Emphasis on highlighting any possible conflict immediately allowing conflicts to be avoided
Prevents members from acting for a client which would create a conflict of interest, apart from when there has been informed consent. “
What is the practice of dual agency/double dipping?
Double dipping, double running or dual agency is the practice of acting for multiple parties, usually when undertaking investment work in the property industry, often for both buyer and seller or multiple buyers.
Can you tell me about any recent RICS guidance relating to dual agency/double dipping?
The global professional statement Conflicts of Interest became mandatory from 1 January 2018. In the UK, a supplementary professional statement for those dealing with commercial investment among other matters, banned the practice of double dipping
What is the difference between an arbitrator and an independent expert? Can you tell me about any other types of ADR?
“Other forms of ADR used in the UK include:
Mediation:
- Use of neutral mediator to facilitate discussions
- Confidential and Informal process
- Usually conducted on a ‘Without Pedjudice’ basis
- Mediator has no decision making authority
- There is RICS guidance on mediation, 2014
Arbitration:
- Invloves arbitrator appointed in quasi-judicial role in accordance with Arbitration Act 1996
- The parties are bound by the decision
- They can order a hearing or consider written representations.
- They will have specialist knowledge of subject area
- Cannot be sued for negligence but can be overturned by Court of Appeal
- This offers a fast, cost effective and confidential solution to a dispute
- Surveyors can act as arbitrators having passed Chartered Institute of Arbitrators Exam
- PACT is a form of arbitration used for lease renewal disputes.
Independant Expert Determination:
- An expert is appointed by the two parties (or President of RICS e.g Rent Revieews).
- RICS Guidance Note on independant Expert Determination, 2016
- Expert has expert knowledge of the subject matter of the dispute
- Both parties are bound by the decision.
- They are appointed to investigate the dispute and receive evidence from both parties
- They can also use their own opinion or evidence to decide upon the award
- This process offers speed and specialist knowledge in the solution
- There is a RICS Panel of Independant Experts for Service Charge Dispute Resolution”
What is the role of RICS in dispute resolution?
“1. The RICS DRS provides high quality alternative dispuet resolution
2. Provides training for individuals who would like to learning for e.g Expert Witeness accreditation
3. Running since 1976
4. Individual group, not governmnet of institutionaly led
5. Provide ADR and advice on how to prevent costs of litigation and court”
Tell me about your role if you were acting as an expert witness/advocate. What is the difference between the two?
“Acting as an Expert Witness:
- When a surveyor provides evidence to a judicial or quasi-judicial body it is as an Expert Witness.
- Mandatory RICS document - Surveyors Acting as Expert Witenss, 4th Edition.
- The expert witnesses primary and overifding duty of care is to the court or other dispute resolution panel and not the client, even though the clinet pays the fee.
- A surveyor should only accept instruction as an expert witness if they have knowledg and experience, qualifications and training and no conflicts.
- The expert must provide a statement of truth and confirm they will act impartially and objective to the body.
- Expert should give an objective and unbiased opinion to matters relating to their experience - cannot cherry pick details.
- Incentive fees are not allowed.
- ‘Hot Tubbing’ is where experts are sworn in alongside each other and given chance to ask each other questions.
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