Conflicts of interest
RICS Practice Standards, UK
1st edition, guidance note
Conflicts of interest1st edition, guidance note
A guidance note concerning the appointment of surveyors asarbitrators, independent experts, mediators, adjudicators and otherdispute resolvers.
Based upon the law and practice in England, Wales and NorthernIreland, this guidance note provides advice to surveyors who areappointed to resolve disputes, either by the President of RICS ordirectly by the parties to a dispute, on dealing with conflicts of interestand involvements. It also seeks to inform the disputing parties andothers involved in the dispute resolution process as to the relevantconsiderations and the procedures likely to be followed.
Conflicts of interestRICS guidance note
1st edition (GN 87/2012)
Cover image iStockphoto.com/Different Thinking (image no. 4559561)
Published by the Royal Institution of Chartered Surveyors (RICS)
Westwood Business Park
Coventry CV4 8JE
No responsibility for loss or damage caused to any person acting or refraining from action as a result of the material included in this publication canbe accepted by the authors or RICS.
Produced by the Dispute Resolution Services Professional Group of the Royal Institution of Chartered Surveyors.
ISBN 978 1 84219 707 3
Royal Institution of Chartered Surveyors (RICS) January 2012. Copyright in all or part of this publication rests with RICS. No part of this work maybe reproduced or used in any form or by any means including graphic, electronic, or mechanical, including photocopying, recording, taping or Webdistribution, without the written permission of the Royal Institution of Chartered Surveyors or in line with the rules of an existing licence.
Typeset in Great Britain by Columns Design XML Ltd, Reading, Berks
RICS guidance notes 11 Introduction 2
2 Scope and application 3
3 Glossary of terms 4
4 The overriding principle 5
5 Independence and impartiality 6
6 Routes to appointment 7
7 RICS appointment procedure 8
8 Dealing with possible conflicts after the appointment has been made 9
9 Practical application of the guidance 10
Appendix 1 RICS appointment procedure 11
Appendix 2 Hierarchy of conflicts with examples under each category 14
Appendix 3 IBA Guidelines on conflicts of interest in international arbitration 17
CONFLICTS OF INTEREST | iii
AcknowledgmentsIn the preparation of this guidance note the workingparty has done its best to secure the views andinvolvement of all the stakeholders relevant toproperty dispute resolution on the subject mattersof involvement and conflict of interest. The workingparty is most grateful to all those who havecontributed and to the efforts of those who havesought greater clarity in this difficult area.
In preparing this guidance note, the working partyhas been heavily influenced by the traffic lightsystem from the International Bar Association (IBA)Guidelines on Conflicts of Interest in InternationalArbitration (IBA 2004) and adopted many of theprinciples set out in this publication. However, thissystem has been adapted and upgraded to ensurethat it is appropriate for property and construction-based disputes where the parties representativesand the dispute resolver are often not lawyers.
This guidance note uses a traffic light system as areadily understandable approach to guide usersthrough an analysis of when an involvement shouldbe disclosed, and when it may be such as toamount to a conflict of interest. Some workingexamples of this approach are set out in theinformation paper which has been provided for thesake of convenience in Appendix 2 to this guidancenote. This paper, which will be updated from timeto time, is intended to provide assistance ratherthan actual guidance, and is not at this stage aformal part of the guidance note.
Special thanks are given to the working group:
John Anderson MRICS
Graham Chase FRICS FCIArb FRSA FInstCPD,Chase and Partners (Chairman)
Tim Cooper FRICS FCIArb
Guy Fetherstonhaugh QC HonRICS, FalconChambers
Peter Horne FRICS FAAV, MerryweathersAgriculture Ltd
Matt Molloy MSc FRICS FCIArb FCIOB MAEBarrister, MCMS Limited
Judith Way, lay member
And to the RICS Dispute Resolution ProfessionalGroup Board, notably,
Jonathan Cope BSc (Hons) FRICS FCIArb FCIOBMAE Barrister, MCMS Limited
Richard Honey MRICS FCIArb Barrister, FrancisTaylor Building, Temple
Brian J Reeves FRICS FCIArb, Brian Reeves & Co.
iv | CONFLICTS OF INTEREST
RICS guidance notes
This is a guidance note. Where recommendationsare made for specific professional tasks, these areintended to represent best practice, i.e.recommendations which in the opinion of RICSmeet a high standard of professional competence.
Although members are not required to follow therecommendations contained in the note, theyshould note the following points.
When an allegation of professional negligence ismade against a surveyor, a court or tribunal maytake account of the contents of any relevantguidance notes published by RICS in decidingwhether or not the member had acted withreasonable competence.
In the opinion of RICS, a member conforming tothe practices recommended in this note shouldhave at least a partial defence to an allegation ofnegligence if they have followed those practices.However, members have the responsibility ofdeciding when it is inappropriate to follow theguidance.
It is for each surveyor to decide on the appropriateprocedure to follow in any professional task.However, where members do not comply with thepractice recommended in this note, they should doso only for a good reason. In the event of a legaldispute, a court or tribunal may require them toexplain why they decided not to adopt therecommended practice. Also, if members have notfollowed this guidance, and their actions arequestioned in an RICS disciplinary case, they willbe asked to explain the actions they did take andthis may be taken into account by the Panel.
In addition, guidance notes are relevant toprofessional competence in that each membershould be up to date and should have knowledgeof guidance notes within a reasonable time of theircoming into effect.
Document status defined
RICS produces a range of standards products.These have been defined in the table below. Thisdocument is a guidance note.
Type of document Definition StatusRICS practice statement Document that provides members with
mandatory requirements under Rule 4 of theRules of Conduct for members
RICS code of practice Standard approved by RICS, and endorsed byanother professional body that provides userswith recommendations for accepted goodpractice as followed by conscientiouspractitioners
Mandatory orrecommended goodpractice (will be confirmedin the document itself)
RICS guidance note Document that provides users withrecommendations for accepted good practiceas followed by competent and conscientiouspractitioners
RICS information paper Practice based information that provides userswith the latest information and/or research
Information and/orexplanatory commentary
CONFLICTS OF INTEREST | 1
1.1 This guidance note seeks not merely to provideadvice to surveyors who are appointed to resolvedisputes on dealing with conflicts of interest andinvolvements; it also seeks to inform the disputingparties and others involved in the wider process asto the relevant considerations.
1.2 Although over the years there have beenrelatively few appointments where it has beendemonstrated that the appointee had a conflict ofinterest, there have been some high profile caseswhere a conflict of interest was found to exist.Either way, conflict of interest can become an areaof tension and consequently the object of thisguidance note is to assist all those parties involvedin a dispute to understand the main principles andconsiderations and be aware of when aninvolvement may become a conflict of interest.
1.3 A surveyor will typically be chosen to resolve adispute because of the particular expertise that heor she will be able to provide in considering theissues that have arisen. Parties to a dispute areentitled to expect that this expertise will befounded upon such experience as will enable thesurveyor properly to evaluate the subject matter ofthe dispute. This experience will have taken theform of numerous involvements and connectionswith other parties, properties and markets. Suchinvolvements are, of course, to be welcomed,because of the role they play in broadening anddeepening the surveyors expertise, and hence hisor her ability satisfactorily to resolve the dispute.
1.4 Even where the involvement in question is withone of the parties to the dispute or with the subjectmatter of the dispute, it may continue to have abeneficial role to play. In some circumstances,however, the surveyor may be so intimatelyconnected with one of the parties to the dispute orthe subject matter of the dispute as to call intoquestion his or her ability to be impartial as disputeresolver. In such circumstances, the surveyor issaid to have a conflict of interest, which will preventhim or her acting as dispute resolver, unless theparties expressly agree that he or she should doso.
1.5 This tension between the need for relevantexperience, which is clearly beneficial, and theoverriding obligation to avoid conflicts of interest,together with a clear transparent process, is