Conflict Avoidance

Question 1

• What do you know about RICS Conflicts of Interest statement?

Answer 1

It’s a professional statement setting out the requirements of regulated RICS firms. It defines conflicts of interest and the key terms surrounding it, including information barriers and informed consent. Also contains guidance about record keeping and dealing with conflicts.

Question 2

• What are different examples of conflicts?

Answer 2

• Party Conflicts: One firm accepting two assignments relating to one transaction
• Own Interest Conflict: Firm or member operating on two sides e.g. personal interest or financial interest, employee relationship
• Confidential Information Conflict: Responsibility to current and former clients to maintain confidentiality

Question 3

• Why is it important to undertake conflicts checks and why are they used?

Answer 3

Conflicts can occur at any point in the process. Checks are to be made before accepting an instruction.
They are used to allow an individual to provide a diligent and competent service.

Question 4

• What is informed consent?

Answer 4

Should there be a conflict of interest, it can still be acceptable to do the job if informed consent is gained.

Consent must be given by adversely affected party to proceed.

RICS highly recommend recording in writing.

o Possible if:
* All parties agree
* Not prohibited by law
* Doesn’t prevent competent service
* Transparency and records maintained
o Not possible if:
* Contentious assignment
* Individual member taking both duties

Question 5

• How can a conflict be managed if accepted (information barrier)?

Answer 5

If a conflict is to be managed, informed consent is required, and an information barrier needs to be in place.
* Can assist the situation of Informed Consent to a Party Conflict
* Not possible if a confidential information conflict from a previous client. Can contact firm to find out.
* Requires reporting of management lines, office layout, access to electronic files and printers etc
* Separate file access
* Audit trail of communication

Question 6

• How can you avoid conflicts arising?

Answer 6

• Careful working of leases and documents
• Clear communication
• Transparency
• Keeping good records

Question 7

• What is your company’s Complaints Handling Procedure?

Answer 7

• Referred in the first instance to the Finance Director (Complaints Handling Officer)
• They will pass on to the Partner for the subject division (if the complaint is against one of the listed partners, then another divisional shareholder will be chosen)
• We return a written understanding of the circumstances within 5 days
• Within 10 days provide a letter informing of the conclusions of the investigation
• If not pleased that it has been resolved – a third party mediation can be selected and can be passed to the Chartered Institute of Arbitrators
• Must be approved by the RICS
• RICS Guidance Note on Complaints Handling

Question 8

• What are the RICS Alternate Dispute Resolution Procedures?

Answer 8

• ADR are processes outside of court.
• They are faster, cheaper, and more negotiable
• Chosen by the firm if escalated to this stage
• Methods:
   Mediation
   Arbitration
   Independent Expert
   Early Neutral Evaluation
   Advocate

Question 9

• What is Mediation?

Answer 9

• Assist negotiations
• Confidential and informal
• Mediator can’t make decision

Question 10

• What is Arbitration?

Answer 10

• Arbitrator is quasi-judicial role
• Decision is final
• Specialist knowledge of subject area (can be surveyor having passed exam)
• Can be overruled by Court of Appeal

Question 11

• What is an Independent Expert?

Answer 11

• Appointed by parties (or by President of RICS in some cases)
• Expert knowledge
• Both parties bound by decision
• Receive evidence from both parties
• Provide own evidence
• RICS Panel of Independent Experts set up

Question 12

• What is Early Neutral Evaluation?

Answer 12

• Expert non-binding opinion

Question 13

• What is Expert Witness?

Answer 13

• RICS Guidance Note
• Overriding duty of care is to the court and not the client
• Should only be undertaken if have knowledge, no conflicts etc
• Provide Statement of Truth to confirm they are impartial
• Must remain objective
• Success related fees are not allowed
• Can be sued for negligence
• Hot tubbing = experts working collaboratively

Question 14

• What is an Advocate?

Answer 14

• Representing a client in a judicial hearing
• Maintain integrity and competence

Question 15

What is Professional Arbitration on Court Terms?

Answer 15

PACT!

Court process of agreeing a lease renewal

Question 16

What are the three steps to handling a conflict?

Answer 16

• Conflict Avoidance
• Written advice to both parties (informed consent)
• Conflict Management (information barrier)

Question 17

What are multiple introductions?

Answer 17

• Acting for a number of different potential purchasers on a property
• Must be agreed exclusively or non-exclusively

Question 18

If you are a sole practitioner, who would undertake CHP for you?

Answer 18

• Nominate a surveyor from another firm as Complaints Handling Officer