Conflict of interest Flashcards
What is a conflict of interest?
When a firm’s duty of care to one client is threatened by the fact they are acting for that client and another clients and both have competing interests.
According to the RICS Conflicts of Interest Professional Statement, what are the three types of conflict?
- Party Conflict
- Own Interest Conflict
- Confidential Information Conflict
What is a Party Conflict?
Where an interest with a client in a professional assignment conflicts with my firm’s duty to another party.
What is an Own Interest Conflict?
Where an interest of a client conflicts with my own or my firm’s interest.
What is a Confidential Information Conflict?
Duty to one client and duty to another client to keep that information confidential.
How would you deal with a conflict of interest?
- Declare to all parties
- Be prepared to step away
- If it can be managed, agree how in writing
What steps should be taken to handle a conflict of interest?
- Establish what the conflict is
- Disclose the nature of the conflict
- Advise both clients to seek independent advice
- Be prepared to step away
- Request written confirmation from both parties
- Set up information barrier once agreement is received
What personal interest situation did you handle?
I declined to advise a friend on a property due to personal interest and lack of PI insurance coverage.
What does the new RICS Professional statement say regarding informed consent?
‘Informed consent’ must be provided prior to proceeding and conflicts can occur during existing assignments.
What is informed consent?
Consent given willingly where the affected party acknowledges the risks but chooses to continue with the appointment.
What must be demonstrated for informed consent?
- There is a conflict of interest or a risk of one
- The material facts known by the surveyor or firm
- What a conflict of interest is
- That it may affect ability to act fully in the interest of a client
What should be done if there is uncertainty about the effect of a conflict of interest?
It would be prudent to decline the assignment rather than seek informed consent.
What is an information barrier?
Physical and electronic separation of individuals within the same firm to prevent confidential information passing between them.
What might be used to implement an Information Barrier?
- Working in different locations
- Using different support staff
- Using passwords to restrict access
- Oversight by the firm’s compliance officer
True or False: Informed consent is only relevant at the outset of a new assignment.
False
