Conflict Avoidance and Dispute Flashcards
What is a conflict of interest?
When your involvement with one party affects your ability to act with impartiality in an instruction.
What literature covers Conflicts of Interests.
RICS Professional Statement: Conflicts of Interest 1st Edition 2017
what are the different types of conflict
Three types of conflict as outlined by the RICS Guidance Note: Conflicts of Interest:
Party Conflict:
a situation in which to act in the interests of a client or other party in a professional assignment conflicts with a duty owed to another client or party in relation to the same or a related professional assignment
Own interest Conflict:
a situation in which to act in the interests of a client in a professional assignment conflicts with the interests of that same RICS member/ firm (or in the case of a regulated firm, the interests of any of the individuals within that regulated firm who are involved directly or indirectly in that or any related professional assignment
Confidential information Conflict:
Small practice of sole practitioner where there is no conflict checking software.
Self checking must be undertaken.
How do you undertake a conflict of interest check?
We have a conflict check system and I therefore put all the details of the instruction onto the system, including all the parties involved and the building involved and I receive an email confirming if there is a conflict and what actions I should take.
How would you handle a conflict of interest?
1) Consider if it should be avoided or can be managed
2) Disclose the nature of the conflict and how you propose to manage it
3) Advise both clients to seek independent professional advice if they have any concerns
4) Request written confirmation from both parties that they are satisfied with these measures and wish you to proceed. known as informed consent.
5) Once agreement received set up information barrier
what is Informed consent?
Informed consent is the express written consent of a party acknowledging the conflict and the associated risk that they could be adversely affected by a conflict and proceeds to instruct the RICS member/ firm anyway.
Surveyors must only seek informed consent if satisficed that it is in the best interests of all parties to do so.
What can you do if a conflict arises and what is the difference between them.
Conflicts can either be Avoided or Managed.
Avoidance – Don’t accept the instruction
Management - Manage the conflict with information barrier and written agreement of all parties.
What are the practical implications of an Information Barrier?
An information barrier that separates two or more groups, usually as a means of restricting the flow of information. This may include:
Location - working in different locations,
Staff - using different support staff,
Passwords - using passwords to restrict who can view the information
Compliance Officer - the process should be overseen by the firm’s compliance officer.
can you give an example of a conflict that may arise in your day to day work?
A payment dispute between contractor and employer. For example, contractor believes they are owed more and the employer issues a pay less notice. The contractor can refer the dispute to adjudication.
What is RICS Conflict Avoidance and Dispute Resolution in Construction Guidance Note?
- Describes processes for conflict avoidance with the aim of avoiding litigation.
How can you best avoid conflicts?
By communicating well, clearly and in a timely manner.
What are the conflict avoidance processes?
Good Management
Good project management
Good client management
Good constructor management
good design team management
Clear contract documentation
Good payment practice
Good record keeping
Regular reporting proactivity.
What is an ombudsmen?
An ombudsman is someone who investigates complaints about companies or organisations.
What are the processes required to avoid conflicts?
- Good management
- Clear contract documentation
- Good client management
- Good contractor management
- Good payment practices
- Record keeping
- Regular reporting
Any literature produced by the RICS for conflict avoidance and dispute?
RICS Guidance Note: Conflict Avoidance & Dispute Resolution.
What is ADR?
Alternative Dispute Resolution.
What the three pillars of dispute resolution
Negotiation, mediation and (binding) adjudicative process
What dispute resolution procedures are you aware of?
Negotiation Mediation Conciliation Adjudication · Arbitration - Expert determination
Why is ADR better than litigation
- Cheaper
- Quicker
- Confidential
What is litigation?
Litigation is the process of making a civil claim in a Court of Law, where Barristers act on each party’s behalf.
Why should you avoid Litigation?
not private
Bad for relationships
Cost and time implications
What are the types of ADR?
- Mediation
- Expert Determination
- Adjudication
- Arbitration
Explain the process of conciliation?
- Similar to mediation
* Conciliator provides a non-binding decision
Explain the process of mediation?
· A neutral mediator facilitates negotiation between the two parties.
·It’s a confidential and informal process
·Usually conducted on a ‘without prejudice’ basis.
·The Mediator has no decision making authority and cannot impose a resolution upon the two parties.
There is an RICS GN on mediation 2014.
What is expert determination?
An expert in the field is agreed with a contract. They review evidence and make a legally binding decision. (hard to appeal)
Explain the process of adjudication?
· Commonly used for construction payment disputes since section 108 Housing Grants, Construction and Regeneration Act 1996
Process:
- Referring party notifies other party.
- Adjudicator appointed within 7 days
- Referral notice served within 7 days
·The adjudicator comes to a legally binding decision
·Must reach a decision within 28 days of their appointment
There is no requirement for contracts to be in writing.
The adjudicator can correct a clerical or typographical error in the construction contract.
Adjudication can be overturned by Arbitration and litigation.
Who do you name in contracts as the appointed Adjudicator?
RICS Adjudication Service.
They will nominate an expert adjudicator
Why do you use the RICS Adjudication service?
- Well established service
- RICS is the UK’s leading
- It is my professional body and they use RICS chartered professionals
What amended the Housing Grants, Construction and Regeneration Act 1996
Local Democracy, Economic Development and Construction Act 2009
Explain the process of Arbitration
·The Arbitrator takes on a partly judicial role.
- They provide a legally binding award
·The parties are bound by the decision
·Arbitrator can order a hearing or consider written representation
· The Arbitrator will have specialist knowledge of the subject area
·The Arbitrator cannot be sued for negligence
·Their decision can only be overruled by a court of appeal on a point of law only
· for arbitration to occur there must be a written agreement in the contract to arbitrate.
·Advantages – fast, cost effective and confidential solution.
What is the difference between adjudication and arbitration?
- arbitrators have the power to order costs whereas adjudicators do not.
- Adjudication must adhere to strict timescales and typically takes up to 28 days. Where as timescales are not as strict for arbitration.
- Due to quick timetable cost of adjudication is usually low compare to arbitration.
What is the difference between adjudication and mediation?
- Timeframe - mediation depends upon the parties’ agreement whereas adjudication set to 28days unless referring party extends.
- Mediation is informal whereas rules of the adjudication are set by the adjudicator nominating body e.g. RICS.
What is your experience of ADR?
Dilapidations - negotiation
CA - negotiation around costs. Aware of adjudication and arbitration due to preparing contracts but have not been involved.
You are an expert witness acting on behalf of a client and there is a separate expert witness acting on behalf of a separate client. What are your duties acting as an expert witness?
An expert witness has a duty to the court, not to the client. (appointed by a client)
Duties include:
- establishing the facts
- assessing the merits of a case,
- define and agree the issues between the parties,
- help quantify or assess the amount of any sum in dispute,
- give expert (opinion) evidence to the tribunal and
- conduct enquiries on behalf of the tribunal and
- report to that body as to findings
Can an expert witness be sued?
- Yes they can be sued for negligence
When is one form of dispute resolution better than another?
- where money is a concern negotiation is better option
- when the matter concerns payment dispute in relation to a construction contract adjudication must be used
- when relationships want to be preserved - negotiation, then mediation.
- when confidentiality is required - mediation is private and ‘without prejudice’.
Tell me about process which you undertake to avoid disputes.
Checking contractors payment applications before providing a payment certificate. Ensuring that they have accurately claimed for the works they have completed.
