Mandatory - Conflict Avoidance, Management and Dispute Resolution Procedures Flashcards
What is a conflict of interest?
Any involvement with a party / property which may influence your impartiality in an instruction.
What is conflict avoidance?
Not accepting an instruction as a result of conflict.
What is conflict management?
Accepting the instruction and putting a plan in place to manage the conflict.
What is the RICS guidance on Conflicts of Interest?
RICS Professional Statement on Conflicts of Interest 2017
What does the RICS guidance say on Conflict of Interest?
- Conflict of Interest – Member or Firm must not advice if a Conflict of Interest is present unless Informed Consent is provided.
- Must maintain confidential information unless required to disclose by law.
- Every firm must have in place effective systems to check and control conflicts.
What are the three types of conflict?
- Party conflict – work on same instruction for two different parties.
- Own Interest conflict – personal interest (‘connected person’).
- Confidential Information conflict – one client wants information which is confidential to another client.
What is informed consent?
Written consent from the client to proceed on the basis of full and transparent information regarding the conflict.
Should not seek to obtain this unless you are satisfied all parties are best served to continue.
What are the steps you should consider when undertaking a new instruction?
- Conflict avoidance
a. Carry out conflict checks for all instructions - Written advice to both parties – must be done by a Partner at C&W
a. Disclose nature of the conflict
b. Ensure both parties make independent decisions
c. Request informed consent to proceed - Conflict Management
a. Create information barrier between those acting for the conflicting parties
What are the practical implications of an information barrier?
- Inform CBRE compliance officer
- Working in different locations
- Using different support staff
- Restricting access to shared files
How would you carry out a conflict-of-interest check?
Using internal company software which carries out checks on all new instructions. In lieu of the software, issue company-wide emails.
Can you give an example of a conflict of interest you might encounter in your work?
Representing a tenant on a dilapidations negotiation where it has been served by another member of CBRE on behalf of the landlord.
Can you accept an instruction where there is a personal conflict of interest?
Must declare facts promptly in writing to compliance officer before accepting. Must not let the relationship influence your professional judgement and there must be full transparency.
What is ADR?
Alternative Dispute Resolution – avoids litigation
Why is ADR better than litigation?
Litigation is public, costly and more time-consuming.
What is litigation?
Making a civil claim in court of law.
What is the RICS guidance on dispute resolution?
Conflict Avoidance and Dispute Resolution in Construction 2012
What does the RICS Guidance note on Conflict avoidance and disputes say?
Defines the 3no. pillars of dispute resolution
1. Negotiation
2. Mediation
3. Adjudication
Mentions the Practical steps in Construction Conflict
- Checking Contract Docs
- Partnering
- Process of dispute resolution
What are the methods of dispute resolution you are aware of?
Negotiation
Mediation
Arbitration
Independent Expert determination
Adjudication
What is negotiation?
Discussion between parties to solve the issue.
What is mediation?
Use of a neutral mediator who facilitates discussions between two parties. Confidential and informal on ‘without prejudice’ basis. Mediator has no decision-making authority.
What is arbitration?
An arbitrator is appointed in quasi-judicial role (Arbitration Act 1996). Must have specialist knowledge of the area and cannot be sued for negligence. Parties are bound by the decision, but it can be overturned by the Court of Appeal.
Arbitration must be written into a contract for it to be an option on construction contracts.
What is determination?
An independent expert is agreed and appointed by both parties. Review evidence and make a binding decision.
What is adjudication?
Used in the case of construction contract payment disputes.
Referring party notifies the other party, an adjudicator must be appointed within 7 days and a legally binding decision must be reached within 28 days.
Who would you name as the appointed adjudicator in contracts?
RICS Adjudication Service – they nominate an expert
Differences between arbitration and adjudication?
Arbitrators have the power to order costs.
Adjudication has strict timescales imposed.
Adjudication can be overturned in arbitration.
What is your experience of ADR?
Negotiations on dilapidations schedules.
Negotiations around unforeseen costs during a contract.
What would your duties be if you were asked to act as an expert witness?
Duty is to the court, not the client. Must provide a Statement of Truth and confirm they will act impartially and objectively. Must only accept if they have the correct level of knowledge, experience and qualifications.
An expert witness can be sued for negligence.
What steps would you take to avoid disputes on construction contracts?
Ensure checking the contractor’s valuations thoroughly and only issuing payment for the works they have actually completed.
