What is a conflict of interest?
Where your judgement is affected by a personal or business relationship, and independence and impartiality is compromised
What different types of conflicts could exist within your role as a valuer?
- Having acted for the client on the purchase of the property that is to be valued
- Being instructed to let/sell a property that is being valued by the same firm
- Valuing a property where a personal interest is involved (i.e. my dad owns the building)
- Having a long-standing relationship with the client where they contribute to a significant proportion of the firm’s annual income
What RICS standards are there concerning conflicts of interest?
RICS Global Professional Statement ‘Conflicts of Interest’ 2018
What happens where a firm fails to prevent a conflict of interest occuring?
This could result in costs arising in the management or resolution of issues arising from the conflict
What must qualified members do before accepting any instructions?
Ensure they undertake a COI check and that conflicts are either avoided or managed, to avoid compromise professionalism and impartiality. Where conflicts are acknowledge and to be managed, the management process must be confirmed within the ToE.
What is ‘informed consent’?
This is where a minor conflict between parties has been identified and brought to the attention of all stakeholders, and written consent has been provided to continue with the instruction regardless of the conflict.
What are they key requirements for informed consent?
- willingly given
- RICS professional is aware of the material facts of the existing conflict
- Other party understands that a conflict exists
- Other party understands that it may affect the professional’s ability to advise
What is conflict avoidance?
Avoidance -
- requires clear, concise and careful drafting of the contract or lease and associated documentation
- understand client objectives and communicate these clearly to manage expectations
- negotiate contractual obligations carefully & transparently
- proactively adopt conflict avoidance risk analysis involving understanding what could go wrong and how misinterpretation between parties may arise
- keep good records with sufficient detail
What is conflict management?
Management -
- requires written informed consent
- requires written confirmation of management process to include:
> information barriers
> separation of information (password protection)
> physical separation
> take reasonable step to secure info
> decline instruction if objectivity is entirely compromised?
What are the main types of conflict that can arise?
- Party Conflict (work on related instructions for 2 different parties)
- Own Conflict
- Confidential Information Conflict (taking on an instruction for one party would jeopardise the data confidentiality of another instruction)
What are the different dispute resolution processes available?
- Negotiation
- Mediation / Conciliation
- Adjudicative Process
What does negotiation involve?
- Preparation
- Proposal (initial offer)
- Bargaining (counter offer - giving and receiving)
- Closing (body language, tone of voice)
–> use influencing skills
What are some negotiation techniques?
- listen
- body language (non defensive, lean forward, mimic body language)
- silence
- visual aids
- counter
- relationship building
- trade off
What is mediation in terms of dispute resolution?
The use of a third party neutral mediator who facilitates discussions between the two parties to explore whether a solution can be found (ADR)
What are the terms/requirements of mediation in dispute resolution?
- confidential & informal
- conducted ‘without prejudice’ usually
- mediator has no decision-making authority and cannot impose a resolution upon the 2 parties
RICS GN ‘Mediation’
What is Early Neutral Evaluation?
Use of an independent person, experienced int he subject matter, to investigate and give their non-binding opinion
What is Alternative Dispute Resolution?
Dispute resolution processes/techniques that fall outside the scope of court litigation (e.g. The Property Redress Scheme/RICS Dispute Resolution Services)
What are the benefits of ADR?
- quicker thank going to court
- informal (outside the court)
- more room for negotiation
- cheaper
- quality of decision (made by surveyor not a judge)
- confidentiality
What are different forms of ADR?
- Mediation
- Arbitration (/PACT for LR)
- Independent Experts
- Early Neutral Evaluation
- Expert Witness
- Acting as an Advocate
