Conflicts of Interest

Question 1

What is a conflict of interest?

Answer 1

Occurs in situations where one’s professional judgement may be impacted by actual or perceived factors.

Such situations may compromise (or be seen to compromise) impartiality of a RICS member or firm.

Question 2

Has RICS published any information on conflicts of interest?

Answer 2

Conflicts of Interest, 1st edition March 2017

(This has been republished in 2023 as a Professional Standard).

Question 3

Is the Conflicts of Interest 1st edition March 2017 a guidance note or professional statement?

Answer 3

It WAS a Professional Statement, now republished as a Professional Standard in 2023.

Question 4

Can you name 3 types of conflict outlined in the Conflict of Interest Professional Standard?

Answer 4

(1) Party Conflict: Where the duty of a RICS member or firm acts in the interests of a client or other party in a professional assignment which conflicts with a duty owed to another client or party in relation to the same or a related professional assignment.

(2) Own-Interest Conflict: Where the duty of a RICS member or firm acts in the interests of a client in a professional assignment which conflicts with the interests of the same RICS member/firm.

(3) Confidential Information Conflict: A conflict between the duty of a RICS member or regulated firm to provide material information to one client and the duty of that RICS member/firm to another client to keep that same information confidential.

Question 5

Can you provide working examples of a conflict or potential conflict of interest?

Answer 5

• Acting for both the developer and contractor on the same project.
• Having other obligations or pressures that detract you or affect your relationship with the client (e.g. acting as an expert witness where you/your firm has an interest in the outcome of the proceedings).

Question 6

What is informed consent?

Answer 6

Informed consent occurs when a party who might be adversely affected by a conflict of interest acknowledges the existence of that risk but still agrees to instruct an RICS-regulated firm or RICS member to proceed with the assignment.

Question 7

What action should someone take if a conflict of interest situation (or potential situation) arises?

Answer 7

As soon as you become aware, disclose to the client in writing and detail the nature of the conflict.

Question 8

You are instructed to work on a proposed development which would require the removal of a nature reserve. You have strong views on protecting the environment. What should you do?

Answer 8

• Ask myself the question - could I work on the project without bias and give the client proper, impartial advice?
• Notify the client in writing of the potential conflict of interest.
• I may need to respectfully decline the commission and offer somebody else in the business who could work on the development.

Question 9

Tell me what you understand about conflicts of interest?

Answer 9

• A conflict of interest is where someone in a position of trust has competing personal or professional interests making it difficult for them to fulfil their duties impartially
• An existing relationship will result in reduced impartiality and Chartered Surveyors have an obligation to make clients aware of this and if necessary, decline work opportunities where a conflict of interest occurs

Question 10

How could a conflict of interest be managed internally if two seperate departments were working for the same client?

Answer 10

• I could put in place procedures to ensure exclusivity of staff
• This would avoid any cross over of information between the departments
• I would also ensure that there are seperate communication lines into the client
• Seperate geographical locations and secure office and data storage would also need to be provided
• Staff could also sign up to confidentiality or non-disclosure agreements
• I would also need to monitor the potential conflict and keep the client updated on progress

Question 11

If a client was insistent that you worked for them despite an existing conflict of interest, how would you proceed?

Answer 11

• I would check the clients understanding around the conflict of interest
• I would then make the client aware of the potential for reduced impartiality
• If they were still insistent on the appointment, I would seek a letter of instruction from the client to continue
• Followign the appointment I would agree working procedures to manage the conflict of interest with the client and the teams involved