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Alice’s APC > Conflict Avoidance > Flashcards

Conflict Avoidance Flashcards

1
Q

What is a conflict of interest?

A

Situation where there may be an actual, perceived or potential risk that professional judgement of an RICS-regulated firm or member could be compromised by undertaking an assignment

3 types – party conflict, own conflict + confidential information conflict

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2
Q

What is a party conflict?

A

When a duty to one client conflicts with a duty to another client in the same or related assignment

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3
Q

What is an own conflict?

A

When a duty to a client conflicts with the interests of the RICS member or their firm

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4
Q

What is a confidential information conflict?

A

When a duty to provide information to one client conflicts with a duty to keep that information confidential for another client

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5
Q

What RICS guidance relates to conflict of interests?

A

RICS Professional Standard Conflicts of Interest, 2017 (previously a professional statement but reissued in 2023 as a professional standard)

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6
Q

What does the RICS Rules of Conduct say about avoiding conflicts of interest?

A

Sets out an overarching obligation for both RICS-regulated firms + members to always act with integrity + avoid conflicts of interest + any actions or situations that are inconsistent with their professional obligations

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7
Q

Tell me about a conflict of interest check you have carried out

A

Carried out a COI check as part of a valuation instruction

Sent an email to offices affected + also checked on our database

No positive responses were identified

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8
Q

What would you do if you identified a perceived/actual conflict of interest?

A

Notify all parties in writing

Would put mitigation measures in place, e.g. information barriers, to manage conflict, only if both parties provide written consent

If no consent, would decline the second instruction

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9
Q

What is dual agency?

A

When agent has contractual agency relationships with both seller + buyer at same time

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10
Q

What is the practice of dual agency?

A

As a general rule, the practice of dual agency must not be undertaken under any circumstances

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11
Q

Can you tell me about any recent RICS guidance relating to dual agency/double dipping?

A

RICS Professional Standard Conflicts of interest – UK commercial property market investment agency, 2017

This prohibits the practice of dual agency in the UK commercial property investment market

Prohibition applies to both RICS regulated firms + RICS members working within non-RICS regulated firms

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12
Q

Explain the RICS conflict avoidance pledge

A

Initiative aimed at promoting proactive conflict management in construction industry

By signing the pledge, organisations commit to collaborative working, early intervention + conflict avoidance mechanisms

Pledge aims to reduce financial + relational costs associated with disputes in construction projects

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13
Q

What RICS guidance relates to conflicts of interest for dispute resolvers?

A

RICS Professional Standard Conflicts of Interest for Members Acting as Dispute Resolvers, 2nd edn, 2020

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14
Q

What is a COI defined as within the RICS Professional Standard Conflicts of Interest for Members Acting as Dispute Resolvers, 2nd edn, 2020?

A

An involvement between dispute resolver and one of parties, one of the parties’ representatives or the subject matter of dispute, or any other circumstances that raises justifiable doubts of bias or apparent bias

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15
Q

Tell me about the RICS guidance note on conflicts of interest for members acting as dispute resolvers 2020?

A

Professional Standard covers the appointment of surveyors as arbitrators, independent experts, mediators, adjudicators + other dispute resolvers

Aim of standard is to provide advice on dealing with possible COI for surveyors who are appointed to resolve disputes

Also helps all parties involved in a dispute to understand the main principles + considerations + to be aware of when an involvement may develop into a COI

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16
Q

What is a conflict?

A

Disagreement between parties

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17
Q

When do disputes arise in your role?

A

If invoices are not paid on time

If construction is delayed or the work is not completed to expectations

Lack of communication between tenants and contractors when they are carrying out works to tenanted properties

Unpaid rent

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18
Q

How can you avoid a conflict?

A

Early warning signs – look out for signs, e.g. communication breakdowns, late payments or excessive notices

Risk management – anticipate issues + potential disputes

Partnering techniques

Clear + robust client briefings

Client management

Maintain thorough records + regular updates

Ensure proper + clear contract documentation

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19
Q

What are the early warning signs in relation to dispute avoidance?

A

Identifying early symptoms of problems

E.g. communication breakdowns or late payments

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20
Q

What is partnering or alliancing?

A

Cooperative approach between parties which encourages trust + teamwork

Allows parties to pursue mutual goals + objectives

Assists in avoidance of disputes

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21
Q

How can partnering help to avoid disputes?

A

Identifies potential risks + manage sources of conflict at the outset

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22
Q

How can good record keeping avoid a conflict?

A

Provides written audit trail – evidence of what was agreed upon

Provides evidence of who is responsible for what, making it easier to hold parties accountable

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23
Q

How can good client management reduce conflict?

A

Helps build trust + relationships between parties

Promotes clear + transparent communication

Ensures regular updates are provided

Allows potential issues to be identified earlier + solved quicker

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24
Q

Give examples of good payment practices

A

Checking the invoice shows the correct amount

Ensuring invoices are clear + detailed, including due dates, amounts + payment methods

Paying invoices on time

Keeping track of payments received + due

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25
Q

What are the benefits of clear contract documentation?

A

Reduces misunderstandings (by defining clear terms + conditions)

Mitigates risks

Enhances transparency + trust between parties

Improves efficiency + decision making

In case of disputes, serves as evidence, making it easier to resolve

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26
Q

Why is good project or instruction management important?

A

Ensures projects are completed on time by setting deadlines

Keeps projects within budget by monitoring expenses + resource allocation

Identifies potential risks early + helps implement strategies to solve

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27
Q

How do reporting and proactivity reduce conflict?

A

Reporting – Increases transparency + keeps everyone informed about progress, issues + changes

Proactivity – helps detect early warning signs of conflict, e.g. breakdown in communication

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28
Q

What are the differences between conflict avoidance and dispute resolution?

A

Conflict avoidance – involves taking steps to prevent conflicts from arising in the first place

Conflict management – involves actively addressing + handling conflicts

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29
Q

How can you manage conflict?

A

Avoid aggressive behaviour

Investigate + find out facts

Don’t jump to conclusions

Understand each party’s position

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30
Q

What are the three pillars of dispute resolution?

A

Negotiation

Mediation or conciliation

An adjudicative process, i.e. litigation, arbitration, expert determination, adjudication

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31
Q

Who introduced these terms?

A

Professor Green of Bolton University

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32
Q

Talk me through how you would negotiate something?

A
  • Do research beforehand + be prepared
  • Understand client’s position + where may have flexibility
  • Try anticipate other party’s views + understand where we can meet an agreement
  • Outline what we agree on + don’t agree on in negotiation
  • Explain our position but have some things reserved
  • Try understand other party’s position
  • Identify key issues where we aren’t agreeing + try find way round it
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33
Q

How do you prepare for a negotiation?

A
  • Agree client’s objectives + negotiating strategy before negotiations
  • Clarify client’s fall back or BATNA
  • Decide what points you can concede on + which are non-negotiable
  • Prepare evidence to support argument
  • Mentally prepare + practice
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34
Q

What are the options of you cannot reach an agreement in negotiating a case?

A

Mediation

Arbitration

Adjudication

Litigation

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35
Q

What is ADR?

A

Alternative Dispute Resolution

Procedures to resolve conflicts between parties without resorting to litigation

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36
Q

Name some methods of ADR

A

Negotiation

Mediation

Conciliation

Adjudication

Arbitration

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37
Q

What are the benefits of ADR?

A
  • Cheaper than litigation
  • Quicker than litigation
  • Flexible + informal process
  • Can be confidential
  • Can involve specialists/experts rather than lay judges
  • Greater opportunity for negotiation
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38
Q

What is the role of RICS in dispute resolution?

A

RICS Dispute Resolution Services (DRS) provides range of ADR services, e.g. mediation, arbitration, adjudication + expert determination

Can apply for any DRS service on the RICS website

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39
Q

What is litigation?

A

The process of taking a dispute to law of court

Can be used where ADR fails to produce a solution as a last resort

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40
Q

What governs litigation in the Courts?

A

Civil Procedure Rules

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41
Q

Explain the role of CPRs

A

Civil Procedure Rules

Set of rules that governs litigation in courts

Designed to ensure that civil cases are handled justly, efficiently + at a proportionate cost

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42
Q

Can litigation be settled out of Court?

A

Yes – to avoid further costs based on risks of proceeding to judgement

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43
Q

What is the TCC?

A

Technology + Construction Court

Part of High Court that deals with construction related litigation

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44
Q

What are the issues with litigation?

A

Public process – no confidentiality

Costly

Strict procedures

Lay judges may not have expertise in property

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45
Q

What would you recommend if someone wanted to go straight to litigation?

A

Would encourage negotiation in the first instance + then mediation if that did not solve the issue

If mediation was unsuccessful, I would encourage the parties to go through arbitration

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46
Q

What is mediation?

A

Confidential process where a neutral party facilitates negotiations between the parties

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47
Q

Explain the process of mediation

A
  • Mediator chosen by mutual agreement
  • Process takes place on neutral ground
  • Parties kept in separate rooms
  • Mediator ‘shuttles’ between parties + consults each party in turn
  • Process is led by mediator
48
Q

What are the advantages of mediation?

A
  • Can improve communication + negotiation
  • Helps maintain good relationships
  • Informal, confidential, voluntary, flexible
  • Cost-effective
  • Has potential to reach resolution within days if parties are cooperative
49
Q

Is mediation legally binding?

A

No

Can be binding if a contract is produced out of the agreement

50
Q

Can mediation procedures be disclosed to Court?

A

No – they are undertaken on a without prejudice basis

51
Q

What is conciliation?

A

Confidential process where a neutral party facilitates negotiations between the parties and expresses their opinion on the dispute

52
Q

What is the difference between mediation + conciliation?

A

Mediation involves a neutral third-party facilitating discussion without suggesting solutions

Conciliation involves a neutral third party who actively suggests solutions + offers advice

53
Q

What is adjudication?

A

Dispute resolution procedure used to provide an interim binding decision

In construction – legally mandated process under Housing Grants, Construction + Regeneration Act 1996 that allows parties to a construction contract in UK to resolve disputes quickly + cost effectively. Process takes approximately 28 days + involves an independent adjudicator who is an expert on the subject matter + makes a binding decision on dispute that must be adhered to

54
Q

What is the adjudication process?

A

Notification of Adjudication from one party to another

From receipt of notification, parties have up to 7 days to appoint adjudicator

Adjudicator will review parties’ cases + make their decision within 28 days (can be extended to 42 days)

Does not have the power to award costs, unless parties agree to grant them this power

55
Q

Which Act governs adjudication (construction)?

A

Housing Grants, Construction + Regeneration Act 1996 (the Construction Act)

56
Q

What is the relevant timeframe for adjudication (construction)?

A

28-42 days

57
Q

Under JCT how long does an adjudicator have to make their award?

A

28 days, although this can be extended up to 42 days

58
Q

What legislation introduced statutory adjudication?

A

Housing Grants, Construction + Regeneration Act 1996 (Construction Act 1996)

59
Q

What happens after an adjudication interim decision is made?

A

Refer dispute to another process, e.g. litigation, arbitration or mutual agreement

60
Q

What is adjudication often described as?

A

Pay first, argue later mechanism

61
Q

What is the aim of adjudication?

A

Preserve cashflow during construction

62
Q

What type of claim is adjudication appropriate to use for?

A
  • Interim payments
  • Delay + disruption of works
  • Extensions of time for completion of works
  • Final account
  • Breach of contract
  • Termination of contract
  • Professional negligence
63
Q

When would a surveyor be most likely to act as an adjudicator?

A

In construction disputes

64
Q

Explain the various adjudication services provided by RICS

A

Construction Adjudication – for disputes in construction industry. Offers fast, cost-effective resolutions for complex issues

Low Value Adjudication – for smaller disputes where claim is less than £100,000 + does not involve multiple issues, offering simplified solution. More cost-effective than arbitration, ideal for urgent disputes where maintaining cash flow + project momentum is crucial

Summary Adjudication – good for resolving straightforward disputes where claim is below £20,000 quickly

Homeowner Adjudication – provides reliable service for resolving disputes between homeowners + contractors

65
Q

Explain the impact of the Housing Grants Construction and Regeneration Act 1996 (Construction Act) on dispute resolution and construction contracts

A

Act introduced right to refer disputes to adjudication at anytime, providing a quicker + more cost-effective method for resolving disputes compared to litigation

66
Q

What is the difference between adjudication + arbitration?

A

Adjudication is designed for quicker resolution (usually 28 days) – ideal for construction disputes requiring immediate action

Arbitration involves a longer, more detailed process – suitable for more complex disputes requiring thorough examination

67
Q

What is arbitration?

A

Form of ADR involving an independent third party making a final + binding decision on a dispute

68
Q

What Act is arbitration governed by?

A

Arbitration Act 1996

69
Q

What is the process of arbitration?

A

Arbitrator is appointed in a quasi-judicial role in accordance with Arbitration Act 1996

Receives written or verbal evidence at a hearing from parties’ representatives (acting as expert witnesses)

Makes legally binding decision + has power to award all costs

70
Q

Can surveyors act as arbitrators?

A

Yes, having passed their Chartered Institute of Arbitrators Exams

71
Q

How do you become an arbitrator?

A

Complete 18-month RICS Diploma in arbitration, or comparable qualification approved by RICS

72
Q

Does an Arbitrator have a duty to investigate all relevant evidence?

A

No – they act on evidence submitted by the parties, but can draw attention to matters the parties may not be aware of

73
Q

Can a lease require an Arbitrator’s costs to be split 50:50?

A

No – an Arbitrator always has full discretion to Award costs

74
Q

Can you appeal an Arbitration Award?

A

Yes – limited grounds of appeal under grounds S67-69 within 28 days of the Award being published

75
Q

Under what grounds can you appeal an Arbitration Award?

A

Point of law

Serious irregularity

Outside jurisdiction

76
Q

What are the advantages of arbitration?

A

Fast + confidential

Cheaper than litigation (but still fairly expensive)

77
Q

Give an example of when arbitration may be used

A

Rent reviews

Construction disputes

78
Q

What arbitration services do the RICS offer?

A

Fast Track Arbitration Service (Construction + Engineering Arbitration Service) – for disputes with value of £100,000 or less. Award published within 6 months

Select Arbitration Service (Construction + Engineering Arbitration Service) – for high-value complex disputes. Award published within 12 months

Rural Rent + Agriculture Arbitration – landlords must notify tenant 12 months before term date. If no agreement reached after negotiations, arbitrator can be appointed. Will charge for maximum 3 days’ work

Commercial Rent Review Appointment Service – landlords must notify tenant of intention to review rent 12 months before term date. If no agreement reached after negotiations, either party can apply for arbitrator. Has 6 months to reach decision from date of appointment

79
Q

What are the timescales around arbitration?

A

Depends on case itself + service of arbitration

Fast-track arbitration service – award published within 6 months

Select arbitration service – award published within 12 months

Commercial Rent Review Appointment Service – RICS appoints arbitrator within a few weeks; decision usually within 6 months from appointment

Rural Rent + Agriculture Arbitration – Decision published within 20 working days after final submissions or hearing; costs shared equally, typically £1000/day for 3 days

80
Q

Is there a fee to apply to arbitration?

A

£425 for construction + commercial rent review arbitration services

£195 for rural rent review arbitration services

81
Q

How do you apply for an arbitrator?

A

Can submit a DRS form on the RICS website

DRS1 – commercial rent review appointment service

DRS2 – construction + engineering arbitration

DRS3 – rural rent + agriculture disputes

82
Q

How many years post qualifying can you become an arbitrator?

A

10 years

83
Q

What is expert determination?

A

Relates to role of a third-party during ADR proceedings

Provides expert opinions on disputes

84
Q

How is an independent expert appointed?

A

Often appointed by parties or President of RICS (via RICS Dispute Resolution Service)

85
Q

What is the difference between an arbitrator and an independent expert?

A

Arbitrator – acts on evidence submitted by parties. Award must be between that contended by the parties. Cannot make award without receiving evidence from at least one of parties. Governed by Arbitration Act 1996. Has power to award costs. Limited right of appeal but restricted to point of law or challenge in the event of lack of jurisdiction or serious irregularity

Independent expert – relies on own investigations + initiatives to arrive at own opinion/decision, which may be outside that contended by the parties. No legislation – relies on contract within the parties. Has no power to award costs unless lease, contract or parties allows it. No right of appeal but parties can sue for negligence

86
Q

Which Act is Expert Determination governed by?

A

None – its purely governed by contract

87
Q

Does an Expert have a duty to investigate all relevant evidence

A

Yes

88
Q

Do the parties have to submit their own expert witness representations to an Expert?

A

No – unless the parties agree otherwise

89
Q

Does an Expert have power to determine costs?

A

Maybe – if the lease directs or the parties agree

90
Q

Can you sue an Expert for negligence?

A

Yes – can sue for damages/loss, but the Court won’t interfere with the determination

91
Q

Is a decision by expert determination legally binding?

A

No

92
Q

What are the advantages of expert determination?

A

Cheaper than litigation or arbitration

Fast process

93
Q

Is there any RICS guidance on expert determination?

A

RICS Guidance Note on Independent Expert Determination, 2016

94
Q

When acting as an Expert Witness, who is your duty towards?

A

The Court or other dispute resolution panel

95
Q

How do your responsibilities as a surveyor change when acting as an expert witness? Is there any RICS guidance on this?

A

You would have a duty to the Court rather than your client

RICS Practice Statement + Guidance Note ‘Surveyors acting as expert witnesses’ (4th edn), April 2014, amended Feb 2023. Effective in April 2014

96
Q

Do you act as an Expert Witness in negotiations?

A

No – you act as a negotiator/advisor

97
Q

Can an Expert Witness’ fee basis be performance-based/condition?

A

No

98
Q

What is the difference between an independent expert and expert witness?

A

Independent expert – relates to role of 3rd party during ADR proceedings

Expert witness – role that surveyor (representing client either landlord or tenant) may act during 3rd party proceedings

99
Q

What is an advocate?

A

Represents client in third party proceedings or court

Has a duty to court or tribunal to act properly + fairly but also has a duty to client’s best interest

100
Q

To whom does the advocate owe a duty?

A

Their client but still has a duty to the tribunal or court to act properly + fairly

101
Q

Is there any RICS guidance for advocates?

A

RICS Professional Statement ‘Surveyors Acting As Advocates’, (3rd edn), February 2017

102
Q

What is the difference between acting as an expert witness + advocate ?

A

Expert witness – has a duty to the court. Obliged to put forward genuine opinion

Advocate – Has a duty to their client + tribunal/court to act fairly. Able to put forward arguments + conclusions with which they do not necessarily agree

103
Q

What is PACT?

A

Professional Arbitration on Court Terms

For commercial lease renewal disputes, run by RICS

Involves third-party arbitrator or expert

Offers viable alternative to court where parties cannot agree on key lease terms, e.g. term, rent, service charge, etc.

104
Q

Can you tell me about PACT in relation to lease renewals?

A

It is a process where the determination of all/some of lease terms of a renewal lease (with consent of both parties) is delegated to an independent third party who will act as an arbitrator or independent expert

105
Q

What is a Dispute Review or Recommendation Board (DRB)?

A

Panel of experts established at beginning of construction project to help prevent + resolve disputes as they arise

Makes recommendations rather than binding decisions

106
Q

How does the DRB process work?

A

Three dispute board members are appointed at start of project

They become familiar with project by reviewing documentation + regularly visiting site during course of works

If a dispute arises that cannot be resolved through negotiation, either party can submit dispute to DRB (informal process)

DRB holds a hearing where both parties present sides of dispute. After considering sides, DRB makes a non-binding recommendation on how to resolve the issue

If DRBs recommendation is not accepted, parties can proceed to arbitration or litigation for a binding resolution

107
Q

How does the DAB process work?

A

DAB is established + members are chosen at start of project

They become familiar with project by reviewing documentation + regularly visiting site during course of works

When dispute arises, referred to DAB (quicker + less formal than court proceedings)

DAB holds a hearing where both parties present sides of dispute. After considering sides, DAB makes a binding decision (decision is binding unless it is overturned by arbitration or litigation)

107
Q

What is a Dispute Adjudication Board (DAB)?

A

Panel of experts selected by parties to resolve disputes that arise during construction project

Makes binding decision about any dispute referred to it

108
Q

Which dispute resolution procedures lead to a binding decision?

A

Adjudication

Arbitration

Litigation

109
Q

What RICS guidance are you aware of relating to dispute resolution, ADR or roles in dispute resolution?

A

RICS Professional Standard ‘Surveyors acting as arbitrators in construction disputes’ (2nd edn), originally published in April 2017 as a guidance note but was reissued in April 2023 as a professional standard

RICS Professional Standard ‘Surveyors acting as adjudicators in the construction industry’ (4th edn), originally published in April 2017 as a guidance note but was reissued in April 2023 as a professional standard

RICS Professional Standard ‘Independent Expert Determination’, December 2016

RICS Practice Statement + Guidance Note ‘Surveyors acting as expert witnesses’ (4th edn), April 2014, amended Feb 2023

RICS Professional Statement ‘Surveyors Acting As Advocates’, (3rd edn), February 2017

110
Q

What is a calderbank offer?

A

Private + confidential offer made by one party to other party which is intended to settle a dispute

Must be a genuine offer + capable of being accepted

If offer is not accepted it cannot be revealed to an independent dispute resolver, e.g. arbitrator, until arbitrator has made decision

111
Q

What is a Part 36 offer?

A

Settlement offer made in accordance with Part 36 of Civil Procedure Rules in England + Wales

Can be made any time during litigation, including before proceedings start

Must be made in writing, states that it is made pursuant to Part 36 of Civil Procedure Rules in England + Wales + specify period (at least 21 days) for acceptance + detail offer’s scope

Similar to private + confidential Calderbank offer to settle a dispute

112
Q

What is the difference between a part 36 offer and a calderbank offer?

A

Calderbank offer – more informal + more flexible. Fewer rules + more options for amending, withdrawing + setting time limits

Part 36 must be in a specific format + in writing

113
Q

What is a memorandum of understanding?

A

Non-binding agreement that states each party’s intention to do something, e.g. enter into a business transaction

Used to help parties move towards more formal, contractually binding relations

Can help to avoid conflicts + enable negotiations

114
Q

What tribunals are you aware of?

A

First-Tier Tribunal – for disputes between landlords + tenants, e.g. assessments of fair rents + market rents, variation to leases, etc.

Valuation Tribunal – determines appeals against business-rating assessments brought by ratepayers for commercial premises + appeals against council tax banding brought by residential homeowners/taxpayers

Upper Tribunal (Lands Chamber) – formerly known as Lands Tribunal. Used to determine disputes concerning values of damages in land compensation + CPOs, etc.

Alice’s APC (22 decks)

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