Some of you may have seen that the RICS has published guidance on how to deal with conflicts, helpfully called Conflicts of interest. I should declare an interest at the outset (not a conflict though!). While I wasn’t an author, I am chairman of the RICS’ Dispute Resolution Professional Group (DRPG) and the DRPG is responsible for standards concerning dispute resolution, including this guidance note – apologies if I therefore appear biased!
The guidance note is available to RICS members to download from the RICS website and to non-members to buy from www.ricsbooks.com. It has been prepared not only to give guidance to surveyors appointed as dispute resolvers on how to deal with conflicts, but also to be of assistance to the parties and their representatives.
The guidance note
The guidance note contains some very useful sections, including one that explains the difference between independence and impartiality. The RICS’ overriding principle is that dispute resolvers should be impartial at the time of their appointment and remain impartial during the entire proceedings. Some may be surprised to learn that being impartial doesn’t necessarily mean dispute resolvers have to be independent of the parties.
For those that regularly use the Dispute Resolution Service (DRS), there is a detailed explanation of its appointment procedure. DRS’s involvement obviously ends once the surveyor has been appointed, however there is a useful section on how to deal with possible conflicts after the appointment has been made. Such advice might have come in handy for the arbitrator in A v B (which Matt blogged about last year).
Traffic light system of red, orange and green
Those practitioners who undertake international work (and many of those who don’t) are likely to be aware of similar guidance published by the International Bar Association (IBA). The IBA’s guidance heavily influenced the authors of this guidance note. Indeed this guidance note uses a similar traffic light system to assist users on when an involvement should be disclosed and when it might amount to a conflict. It sets out a schedule of worked examples for the dispute resolver to consider:
- The red list, when it would be inappropriate to accept the appointment. The red list is further divided between non-waivable and waivable conflicts.
- The orange list, where an involvement might amount to a conflict.
- The green list, where there is no possible conflict.
Surveyors act as dispute resolvers in a multitude of disputes, be that construction adjudicators, commercial independent experts, agricultural arbitrators, to name but a few. The types of conflicts that arise in these forums can differ significantly. The lists have been prepared in an attempt to cover all of these appointments and there are some examples that construction practitioners are likely to disregard, for example the waivable red list includes the following example:
- The dispute concerns a rental valuation, and the dispute resolver, or his or her firm, is acting on a comparable property that may be taken up as evidence on the subject property.
Others might be very relevant to construction practitioners, for example the following from the orange list:
- The dispute resolver was within the relevant past a partner of, or otherwise associated with, another advisor on the same dispute or property.
This was the type of involvement discussed by Edwards-Stuart J in Fileturn Ltd v Royal Garden Hotel Ltd.
It is important to note that these worked examples do not form part of the guidance note, and therefore a surveyor failing to disclose one of the examples on, say, the orange list, will not necessarily be in breach of the guidance.
Guidance of wider application?
However, I nevertheless think that the worked examples are likely to come in very handy for surveyors being appointed as dispute resolvers, those doing the appointing and the parties and their advisors (including lawyers). For example, I see no reason why lawyers attempting to agree an adjudicator, whether that be a surveyor or other professional, shouldn’t ask the potential adjudicator to confirm that there are no involvements on the red or orange lists.
Only time will tell if this happens and we find others readily adopt the traffic light system. In the meantime, surveyors and construction practitioners alike need to be aware of it. It applies to any form of dispute started since it was published at the end of January 2012.