Mandatory - Conflict Avoidance, Management and Dispute Resolution Procedures

Question 1

What is a conflict of interest?

Answer 1

Any involvement with a party / property which may influence your impartiality in an instruction.

Question 2

What is conflict avoidance?

Answer 2

Not accepting an instruction as a result of conflict.

Question 3

What is conflict management?

Answer 3

Accepting the instruction and putting a plan in place to manage the conflict.

Question 4

What is the RICS guidance on Conflicts of Interest?

Answer 4

RICS Professional Statement on Conflicts of Interest 2017

Question 5

What does the RICS guidance say on Conflict of Interest?

Answer 5

• Conflict of Interest – Member or Firm must not advice if a Conflict of Interest is present unless Informed Consent is provided.
• Must maintain confidential information unless required to disclose by law.
• Every firm must have in place effective systems to check and control conflicts.

Question 6

What are the three types of conflict?

Answer 6

• Party conflict – work on same instruction for two different parties.
• Own Interest conflict – personal interest (‘connected person’).
• Confidential Information conflict – one client wants information which is confidential to another client.

Question 7

What is informed consent?

Answer 7

Written consent from the client to proceed on the basis of full and transparent information regarding the conflict.
Should not seek to obtain this unless you are satisfied all parties are best served to continue.

Question 8

What are the steps you should consider when undertaking a new instruction?

Answer 8

1. Conflict avoidance
   a. Carry out conflict checks for all instructions
2. Written advice to both parties – must be done by a Partner at C&W
   a. Disclose nature of the conflict
   b. Ensure both parties make independent decisions
   c. Request informed consent to proceed
3. Conflict Management
   a. Create information barrier between those acting for the conflicting parties

Question 9

What are the practical implications of an information barrier?

Answer 9

• Inform CBRE compliance officer
• Working in different locations
• Using different support staff
• Restricting access to shared files

Question 10

How would you carry out a conflict-of-interest check?

Answer 10

Using internal company software which carries out checks on all new instructions. In lieu of the software, issue company-wide emails.

Question 11

Can you give an example of a conflict of interest you might encounter in your work?

Answer 11

Representing a tenant on a dilapidations negotiation where it has been served by another member of CBRE on behalf of the landlord.

Question 12

Can you accept an instruction where there is a personal conflict of interest?

Answer 12

Must declare facts promptly in writing to compliance officer before accepting. Must not let the relationship influence your professional judgement and there must be full transparency.

Question 13

What is ADR?

Answer 13

Alternative Dispute Resolution – avoids litigation

Question 14

Why is ADR better than litigation?

Answer 14

Litigation is public, costly and more time-consuming.

Question 15

What is litigation?

Answer 15

Making a civil claim in court of law.

Question 16

What is the RICS guidance on dispute resolution?

Answer 16

Conflict Avoidance and Dispute Resolution in Construction 2012

Question 17

What does the RICS Guidance note on Conflict avoidance and disputes say?

Answer 17

Defines the 3no. pillars of dispute resolution
1. Negotiation
2. Mediation
3. Adjudication

Mentions the Practical steps in Construction Conflict

1. Checking Contract Docs
2. Partnering
3. Process of dispute resolution

Question 18

What are the methods of dispute resolution you are aware of?

Answer 18

Negotiation
Mediation
Arbitration
Independent Expert determination
Adjudication

Question 19

What is negotiation?

Answer 19

Discussion between parties to solve the issue.

Question 20

What is mediation?

Answer 20

Use of a neutral mediator who facilitates discussions between two parties. Confidential and informal on ‘without prejudice’ basis. Mediator has no decision-making authority.

Question 21

What is arbitration?

Answer 21

An arbitrator is appointed in quasi-judicial role (Arbitration Act 1996). Must have specialist knowledge of the area and cannot be sued for negligence. Parties are bound by the decision, but it can be overturned by the Court of Appeal.
Arbitration must be written into a contract for it to be an option on construction contracts.

Question 22

What is determination?

Answer 22

An independent expert is agreed and appointed by both parties. Review evidence and make a binding decision.

Question 23

What is adjudication?

Answer 23

Used in the case of construction contract payment disputes.
Referring party notifies the other party, an adjudicator must be appointed within 7 days and a legally binding decision must be reached within 28 days.

Question 24

Who would you name as the appointed adjudicator in contracts?

Answer 24

RICS Adjudication Service – they nominate an expert

Question 25

Differences between arbitration and adjudication?

Answer 25

Arbitrators have the power to order costs.
Adjudication has strict timescales imposed.
Adjudication can be overturned in arbitration.

Question 26

What is your experience of ADR?

Answer 26

Negotiations on dilapidations schedules.
Negotiations around unforeseen costs during a contract.

Question 27

What would your duties be if you were asked to act as an expert witness?

Answer 27

Duty is to the court, not the client. Must provide a Statement of Truth and confirm they will act impartially and objectively. Must only accept if they have the correct level of knowledge, experience and qualifications.
An expert witness can be sued for negligence.

Question 28

What steps would you take to avoid disputes on construction contracts?

Answer 28

Ensure checking the contractor’s valuations thoroughly and only issuing payment for the works they have actually completed.