Conflicts of Interest Flashcards
What is a conflict of interest?
When an individual’s personal interests – family, friendships, financial, or social factors – could compromise their judgment, decisions, or actions in the workplace.
When does a conflict of interest exist?
When independence and impartiality is threatened.
What RICS document relates to Conflicts of Interest?
RICS Professional Standard: Conflicts of Interest 2017.
What is conflict avoidance vs management?
● Avoidance = do not accept the instruction.
● Management = instruction is accepted, but steps are agreed to manage the conflict, with written agreement of both parties.
What are the types of conflict of interest defined in RICS Professional Standard: Conflicts of Interest 2017?
1) Party conflict – working on same instruction for two different parties
2) Own interest conflict – a personal interest
3) Confidential information conflict – work between two parties which is confidential
How can conflicts of interest be managed?
1) Avoidance – decline the instruction unless the conflict can be properly managed maintaining transparency and openness.
2) Written advice to both parties – nature of the conflict and proposals (be clear so parties can make their decision), request written informed consent from clients.
3) Conflict management – upon written consent, set up Information / ethical barriers as agreed
What are information/ethical barriers?
● Must be robust so information cannot pass between the two parties
● Surveyors must be different and physically separated
● Information securely stored
● Keep a clear audit trail
● Overseen by compliance officer
What obligations does the RICS Professional Standard: Conflicts of Interest 2017 place on members and firms?
Members:
● Member must avoid conflicts of interest
● BUT only allowed if you have “informed consent”
● Must be in the best interest of all parties and not unlawful
Firms:
● All conflict must be managed in accordance with the Professional Standard (effective systems and controls in place)
● Keep records to show compliance with the standard
Summarise the RICS Professional Standard: Conflicts of interest – UK commercial property market investment agency?
Relates specifically the UK commercial investment agency work.
● Dual agency (agent has contractual relationship with the seller and buyer) prohibited from 1st January 2018.
● Multiple introductions allowed if on “non-exclusive basis” – informed consent given from all clients
● Incremental advice allowed, information barrier must be in place
● When acting for a ‘connected person’ (family member / close business associate), personal interests must be declared - must comply with s21 of the Estate Agents Act 1979 - declare agency work.
Tell me about a conflict of interest check you have carried out.
ITTs require tenderers to sign a declaration to confirm there is no conflict of interest or to notify any conflict of interest during the tender period.
If you identified a potential or actual conflict of interest, how could you handle this?
1) I would avoid the conflict of interest if possible (i.e. decline the instruction)
2) If lawful and in the best interest of all parties I would gain informed consent of all parties
3) Ensure a robust information barrier is in place, overseen by a compliance officer.
Give an example of a conflict of interest you have dealt with?
On the Bro Tathan Utilities project the contractor asked my firm to design an element of the contractor’s design responsibility (foundations for LPG tanks). This would result in my firm working on behalf of the client (WG) and also the contractor on the same project.
It was in the best interest as all parties as my firm had designed the rest of the scheme and helped to procure the LPG tanks meaning our structures team could provide the service more effectively (better and cheaper). I ensured that both parties (client and contractor) were aware of the conflict of interest and received informed consent from both before proceeding. Information barrier was put in place.
