Conflict avoidance, management & dispute resolution procedures

Conflict avoidance, management & dispute resolution procedures

1. Conflict of interest

   • Arises when independence and impartiality is threatened due to the existence of a conflict between two clients or a personal interest
     • conflict avoidance
       • don't accept instruction in accordance with RICS Rules of conduct
     • contact management
       • Accepted and steps agreed and put in place to manage conflict e.g. a chinese wall (info barrier)
         • solicitors (our company is too small)
         • seperate team in seperate parts of the building
   • examples
     • financial interest (commissions)
       • personal interest (friend),
         • Family member wanted to view G/head road
         • Commercial relationships
           • The interests of you or your firm
             • acting on both sides of a transaction
         • may also be a personal interest in the property e.g. you live nearby or family owns
         • must not let personal interest interfere or influence your professional judgement
         • can act but interest must be declared as well as capacity in which you are acting, for full transparency
         • state if you will receive any remuneration over and above your fee (e.g. beneficiary)
         • S 21 EAA 79, interest must be declared in writing at all stages of process, toe's, property particulars & heads of term
       • referral fees?

2. Red Book 2014

   • PS2, 4 - Independence, objectivity & conflict of interest & PS2, 5 - Maintaining strict seperation between advisors
   • VPGA 2 - Valuation for secured lending - examples on how to recognise an existing, former or potential conflict of interest with a client, property or borrower where there has been a relationship within the last 2 years

3. Conflict of interest guidance note 2012

4. Handling

   • Step 1 - Conflict avoidance
     • Step 2 - Written advice to both parties
       • Step 3 - Conflict management
         • If confirmation and acceptance of proposal is receive, set up info barriers as advised
           • Barrier must be robust enough to offer no chance of info passing between 2 parties
             • must take reasonable steps to operate an effective barrier
               • surveyors acting on 2 sides must be different and physically seperated with seperate teams
                 • All info regarding instruction must be securely stored
                   • Firms compliance officer must oversee all actions
                     • 'Double running' describes situation where agents double their fees by acting for both buyer and seller
       • 1. Disclose nature of conflict, circumstances surrounding it and any other facts, set proposals of how will be dealt with e.g. info barrier
       • 2. Advise both clients to obtain independent professional advice on handling the conflict from an external professional before proceeding if they have concerns or require independent advice
       • Request written confirmation from both clients that your firm can act in accordance with the provisions of the proposal
     • Obtain the full facts, consider whether the conflict is irresolvable and should be avoided or whether it can be properly managed
     • If it can, decide whether you want to accept or decline

5. Acting as an expert witness

   • RICS pubilshed Practice Statement 'Surveyors acting as expert witnesses' updated in 2011 to reflect outcome of Jones V Kaney 2011
     • Supreme court found that expert witnesses are now not immune from civil action in relation to evidence they give in legal proceedings and that they can be sued for negligence
       • Related to provision of expert evidence in relation to a personal injury claim for post-traumatic stress following a car crash
     • Experts primary duty of care is to the court or dispute resolution panel, even though the client pays the fee and there is a duty of care to the client and wider public
       • Expert provides a statement of truth and confirmation that they will act impartially and objectively
         • Contingency fees (no win no fee) are not allowed
           • 'Hot tubbing' is where experts are sworn into cases alongside each other and are given the chance to ask each other questions.

6. Acting as an advocate

   • RICS published Practice Statement ' Surveyors acting as advocates', 2008
     • Represents client at a judicial hearing/tribunal - like solicitor
       • Must be competent and act in a way to maintain integrity of judicial process

7. Dispute Res

   • If you fail to reach an amicable resoution regarding a complaint CHP doesn't reach satisfactory outcome, there are 2 choices for further action
     • litigation / court following the civil procedure rules
     • ADR (Alternative dispute resolution
       • 5 (M A E A UUU (dragonsta din tei)
         • Mediation
           • Use of neutral mediator (middle man) who facilitates discussions and attempts to find solution
             • Confidential & informal
               • 'Without prejudice' basis
                 • No decision making authority and cannot impose a resolution (think matrimonial)
         • Arbitration
           • Appointment of arbitrator in a quasi-judicial role in accordance with Arbitration Act 96
             • Parties bound by the decision
               • He will have specialist knowledge of subject area
                 • Can't be sued for negligence but decision can be over-ruled by the court of appeal on a point of law
                   • Surveyors can act as an abritrator hving passed Chartered Institute of Arbitrators exams
                     • PACT (Professional Arbitration on Court Terms) is a form of arbitration used for lease renewal disputes
         • Expert Determination
           • Independent expert with expert knowledge of the subject matter in dispute is appointed by both parties to consider evidence and investigate the dispute
             • Both parties are bound by the decision, he can use his own opinion to decide upon the award
               • There is an RICS panel of independent experts for service charge dispute resolution
         • Adjudication
           • determines dispute in a contractual process
             • commonly used construction payment disputes
               • adjudicator must reach decision within 28 days, decision is legally binding
         • Use of an ombudsman
           • Not for profit organisation that confidentially receives, investigates and facilitates the resolution (ombudsman services: property)
             • complaint is handled by an investigation officer who will review the case within 6 weeks or receipt and provide a provisional conclusion. Both parties then have 28 days to reply and any comments will be considered when the ombudsman makes final decision.
               • Ombudsman can make financial award of upto £25l, if party still not satisfied can go to the relevant court
       • Advantages
         • Speed, less time than lengthy court proceedings
         • Informality, being outside court
         • Greater scope for negotiation
         • Cheaper, less money spent on prof/court fees
         • Quality of decision making - outcome or award can be made by a surveyor rather than a judge