Conflict Avoidance Flashcards
What is a conflict of interest?
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
What is a party conflict?
When a duty to one client conflicts with a duty to another client in the same or related assignment
What is an own conflict?
When a duty to a client conflicts with the interests of the RICS member or their firm
What is a confidential information conflict?
When a duty to provide information to one client conflicts with a duty to keep that information confidential for another client
What RICS guidance relates to conflict of interests?
RICS Professional Standard Conflicts of Interest, 2017 (previously a professional statement but reissued in 2023 as a professional standard)
What does the RICS Rules of Conduct say about avoiding conflicts of interest?
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
Tell me about a conflict of interest check you have carried out
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
What would you do if you identified a perceived/actual conflict of interest?
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
What is dual agency?
When agent has contractual agency relationships with both seller + buyer at same time
What is the practice of dual agency?
As a general rule, the practice of dual agency must not be undertaken under any circumstances
Can you tell me about any recent RICS guidance relating to dual agency/double dipping?
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
Explain the RICS conflict avoidance pledge
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
What RICS guidance relates to conflicts of interest for dispute resolvers?
RICS Professional Standard Conflicts of Interest for Members Acting as Dispute Resolvers, 2nd edn, 2020
What is a COI defined as within the RICS Professional Standard Conflicts of Interest for Members Acting as Dispute Resolvers, 2nd edn, 2020?
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
Tell me about the RICS guidance note on conflicts of interest for members acting as dispute resolvers 2020?
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
What is a conflict?
Disagreement between parties
When do disputes arise in your role?
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
How can you avoid a conflict?
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
What are the early warning signs in relation to dispute avoidance?
Identifying early symptoms of problems
E.g. communication breakdowns or late payments
What is partnering or alliancing?
Cooperative approach between parties which encourages trust + teamwork
Allows parties to pursue mutual goals + objectives
Assists in avoidance of disputes
How can partnering help to avoid disputes?
Identifies potential risks + manage sources of conflict at the outset
How can good record keeping avoid a conflict?
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
How can good client management reduce conflict?
Helps build trust + relationships between parties
Promotes clear + transparent communication
Ensures regular updates are provided
Allows potential issues to be identified earlier + solved quicker
Give examples of good payment practices
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