Conflict avoidance, management and dispute resolution procedures

Question 1

What is a conflict?

Answer 1

a clash between individuals arising out of a difference in thought process, attitudes, understanding, interests, requirements and even sometimes perceptions.

Question 2

When do disputes arise in your role?

Answer 2

Disputes can arise of a number of situations, including contract terms such as extensions of time, liquidated damages and valuations.

Disputes can also arise on residential disrepair claims between a landlord and tenant.

Question 3

What can you do if negotiations break down?

Answer 3

Explore Alternative Dispute Resolution Methods, if fail ultimately litigation

Question 4

What is a conflict of interest?

Answer 4

a situation in which the duty of an RICS member or a regulated firm to act in the interests of a. client or other party in a professional assignment conflicts with a duty owed to another.

Question 5

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

Answer 5

The most important reason for avoiding conflicts of interest is to prevent anything getting in the way of your duty to advise and represent each client objectively and independently,
without regard to the consequences to another client, any third party, or your own interests and that the clients and in turn the public can be confident you are doing so.

Question 6

Give examples of ways that conflict can be avoided.

Answer 6

Good management

Clear contract documentation

Partnering

Strong project and client management

Record keeping

Good payment practices

Question 7

Why is good management important?

Answer 7

A surveyor who proactively
manages a project for which he or she is
responsible or the duties that they have to their
client in respect of the appointment is an excellent
starting point for the avoidance of disputes.
Proactivity and planning and managing future work,
as well as raising early any issues of concern,
provide confidence in the surveyor’s ability,
enabling problems to be analysed and managed.

Question 8

What are the benefits of clear contract documentation?

Answer 8

Many disputes arise from ambiguities in contract documentation or
argument as to whether there is a contract at all.
The real cause of a dispute might lie elsewhere, for
example, a contractor that is in financial difficulties
in respect of a project might seek to exploit
ambiguities in order to recoup its financial position.
Good documentation means capturing the specific
details of the project and addressing the particular
circumstances and risks of that project. Volumes of
general specifications might not meet this
requirement. The key is to identify the main areas
of risk and set out a strategy for dealing with them
clearly.

Question 9

What is partnering or alliancing?

Answer 9

Building co-operation between the project participants in order to foster team working, problem solving and an emphasis on
project delivery can assist in the avoidance of
disputes.

Question 10

Why is good project or instruction management important?

Answer 10

Means proactively managing all aspects of time, money and risk
associated with the project. This involves often
addressing some of the most difficult issues.
Simply allocating responsibility for any and all items
to others is never adequate. Surveyors should see
RICS Practice management guidelines: The
management of surveying businesses (3rd edition,
2010) for further guidance in this area. If a surveyor
is not acting as the project manager they should in
any event apply project management technics to
the planning and management of their own
services.

Question 11

How can good client management reduce conflict?

Answer 11

A good understanding of the client’s objectives and the client’s approach to risk is also extremely valuable, as will be
maintaining good lines of communication with the
client. This will assist not only in identifying how
risks and issues are to be dealt with within the
contract documentation and throughout the project,
but will also build sufficient rapport to avoid a
situation where the client incorrectly believes that
the surveyor is simply in control of all aspects of
the project. This is not always possible and good
lines of communication will mean that the surveyor
can warn the client about issues and problems that
are within the surveyor’s services under the
appointment with the client, and then discuss how
those issues might best be dealt with.

Question 12

Give examples of good payment practices.

Answer 12

The design team and the
constructor rely upon cash flow. Once payment
provisions have been agreed, the valuation should
be carried out and payments made promptly. This
in itself can avoid animosity, conflict and dispute.

Question 13

How can good record keeping avoid conflict?

Answer 13

Many disputes can be resolved by retrospectively considering records that have been kept during the course of the procurement or
the carrying out of a project. This means keeping a
proper record of the labour, plant and materials
used in respect of a project. It will also mean
obtaining a daily record of the site’s activities as
well as regularly obtaining progress reports.
Importantly, this should also include a record of
resource movement. In other words, when change
occurs, some record of how that change has
impacted upon the project should be made
contemporaneously

Question 14

How do reporting and proactivity reduce conflict?

Answer 14

The regular monitoring of cost, progress and quality is
important for the success of any project. This may
take the form of minutes of meetings, progress
reports, drop lines on programmes, and photos. It
is perhaps even more important to raise and
manage any issues that are causing delay, any
increases in cost or quality problems as soon as is
practically possible. Any actions should be
recorded so that they can be tracked towards
conclusion.

Question 15

What are the three pillars of dispute resolution?

Answer 15

Negotiation / Mediation / Litigation or Arbitration

Question 16

Who introduced the three pillars of dispute resolution?

Answer 16

Professor Green of Boston University

Question 17

Give examples of each pillar of dispute resolution.

Answer 17

Negotiation - The process whereby the parties work
out between them how to resolve any issues that
have arisen. Power to settle the dispute rests with
the parties.

Mediation - The parties agree on an independent, third-party neutral system to facilitate discussions between them, with the goal of reaching a settlement. The power to settle remains with the parties, but the process is led by the mediator.

Arbitration - For arbitration to apply, the contract between the parties must contain a written agreement to arbitrate. Where it applies the parties might choose to refer to or incorporate an arbitration procedure, such as the Construction Industry Model Arbitration Rules. Alternatively, the arbitration can simply be covered by the applicable legislation, such as the Arbitration Act 1996.

Litigation - The courts have inherent jurisdiction to hear a dispute in respect of just about anything. In the absence of any other procedure, the parties will have a right to refer their matter to an appropriate court. The procedure is governed by the Civil Procedure Rules, and the nature, complexity and value of the dispute will determine which court will hear a particular dispute. Courts have the widest jurisdiction and in addition to determining disputes and declarations, they can also issue Charging Orders, summon witnesses and involve the third parties in the dispute as necessary. Note that bankruptcy and insolvency proceedings such as administration and the winding-up of companies are not primarily governed by the Civil Procedure Rules but by the Insolvency Act and related regulations. In some circumstances a clear debt may be more economically and easily obtained by serving a Statutory Demand or a Winding-Up Petition rather than commencing an action in the court. This is beyond the scope of this guidance note, and specialist advice should always be sought.

Question 18

How do mediation and conciliation differ globally?

Answer 18

Although they may share similarities, Mediation and Conciliation are different things and the main difference between them is dependent on the third party and the role that they play.

When it comes to mediation, there is a third-party mediator who will facilitate the discussion to help both parties come to agreements. Mediation is an alternative form of dispute resolution and is supported by an unbiased third-party mediator.

With conciliation, the conciliator will play an advisory role and may intervene in order to offer feasible solutions to both parties and help settle their disputes.

Question 19

What is Alternative Dispute Resolution (ADR)?

Answer 19

ADR predominantly means alternative dispute resolution, and refers to processes which are alternatives to the traditional binding dispute resolution procedures of litigation and arbitration. It is alternative in the sense that it is providing a faster and more economic dispute
resolution procedure.

Question 20

Why might you prefer to pursue ADR rather than litigation through the Courts?

Answer 20

It is typically cheaper and quicker than litigation

It is a more flexible process than Court proceedings governed by the Civil Procedure Rules

It can be a confidential process

Specialists/experts may be involved rather than lay judges (who may or may not have an understanding of property

Question 21

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

Answer 21

When receiving an instruction from a client I undertake database checks, advisory emails to staff to enquire about any individual involvement, existing record searches

Question 22

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

Answer 22

I would tell the client that I cannot advise or represent a client where doing so would involve a Conflict of Interest or a significant risk of a Conflict of Interest; other than where all of those who are or may be affected have provided their prior Informed Consent.

Question 23

Can you tell me about any RICS guidance relating to conflicts of interest?

Answer 23

RICS Professional Statement - Conflicts of Interest 2017

Question 24

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

Answer 24

We often see candidates confuse the two terms; Independent Expert and Expert Witness. This is perhaps because both are sometimes referred to as an Expert in practice.

An Expert Witness is the role that the landlord or tenant’s surveyor will adopt at third party. They submit their expert witness evidence to the appointed third party, who will either be acting as an Independent Expert or an Arbitrator.

An Independent Expert, in contrast, is the role that the appointed third party may act as during the dispute resolution process. They will determine the level of new rent.

Both roles will be fulfilled by Chartered Surveyors, with sufficient training, qualification, knowledge and experience to fulfil the requirements of the relevant role.

Question 25

Can you tell me about any other types of ADR?

Answer 25

adjudication
mediation
arbitration and
expert determination.

Question 26

Explain how dispute resolution works in a contract you have worked with.

Answer 26

Negotiation –> Mediation –> Arbitration / Litigation

Question 27

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

Answer 27

DRBs are independent panels, made up of neutral third-party individuals selected by both the owner and the contractor, who review disputes from construction projects and offer recommendations on how to proceed.

Question 28

What is a Dispute Adjudication Board (DAB)?

Answer 28

The DAB will adjudicate upon disputes;
* The DAB shall consist of one or three people who must be suitably qualified;
* The composition of the DAB shall be by nomination and then joint selection;
* DAB members are to be remunerated jointly by the parties with each paying half of any fees;
* DAB members can only be replaced by mutual agreement;
* Appointment expires when the DAB has given its decision unless other disputes have been referred to the DAB before that decision is given.

Question 29

What are the relevant timescales for adjudication?

Answer 29

Adjudication is fast – it’s a process that takes 28 days from start to finish

Question 30

Which Act governs adjudication?

Answer 30

Housing Grants, Construction and Regeneration Act 1996

Question 31

Explain the various adjudication services provided by RICS.

Answer 31

Commercial:
- Construction Adjudication
- Low Value Adjudication
- Summary Adjudication

Consumer
- Homeowner Adjudication

Question 32

Explain what the role of the RICS Low Value Dispute Adjudication service is.

Answer 32

The RICS have developed a low cost adjudication procedure to resolve disputes where the sum claimed is less than £100,000 and do not involve multiple or complex issues.

Question 33

What makes the RICS Low Value Dispute Adjudication process cost effective?

Answer 33

The procedure provides for a streamlined and cost-effective process, under which, e.g.:

The Adjudicator is expected to limit the length, or time for submission of any statement, response or argument
The parties are required to limit their documents to no more than one A4 lever arch file (or electronic equivalent) per submission.
RICS will nominate an adjudicator who is an expert in the subject matter in dispute and will use this expertise to decide the matter within 28 days.

Question 34

What are the differences between conflict avoidance and dispute resolution?

Answer 34

Conflict Avoidance - good management practices put in place that help to minimise the risk of disputes occurring.

Dispute resolution - a dispute has occurred, this is the process of resolving the dispute between the parties.

Question 35

Which dispute resolution procedures lead to a binding decision?

Answer 35

Arbitration

Question 36

Explain the RICS conflict avoidance pledge to me.

Answer 36

The Pledge
We believe in collaborative working and the use of early intervention techniques throughout the supply chain, to try to resolve differences of opinion before they escalate into disputes.

We recognise the importance of embedding conflict avoidance mechanisms into projects with the aim of identifying, controlling and managing potential conflict, whilst preventing the need for formal, adversarial dispute resolution procedures. We commit our resources to embedding these into our projects.

We commit to working proactively to avoid conflict and to facilitate early resolution of potential disputes.

We commit to developing our capability in the early identification of potential disputes and in the use of conflict avoidance measures. We will promote the value of collaborative working to prevent issues developing into disputes.

We commit to work with our industry partners to identify, promote and utilise conflict avoidance mechanisms.