Hot Topic Highlight - Dealing with Conflict

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Property Elite’s sole aim is to build better property professionals - supporting your career every step of the way, whether you are completing a RICS accredited degree course, your RICS APC or simply seeking engaging CPD.

Our Hot Topic Highlight blog posts will arm you with information on the hottest topics - ready to tackle an important client meeting or begin revising for your RICS APC final assessment.

This blog article will focus on the RICS APC competency; Conflict avoidance, management and dispute resolution procedures. When you're done, make sure you request your free CPD certificate.

Relevant RICS APC competencies

• Conflict avoidance, management and dispute resolution procedures
• Any technical competency where negotiation is involved

Why is this relevant?

Negotiations frequently break down - it's a fact of life. 

This means that we need to know how to avoid and manage conflicts. It helps us to provide a high standard of service and maintain a professional stance at all times. 

Dispute resolution procedures can often be complex to understand, but with good knowledge and experience you'll be on your way to becoming an expert in no time at all.

We will not consider the art of negotiation in this blog article - we will cover that in detail as part of a future blog article on the Communication & Negotiation competency. 

We will also consider specific dispute resolution applications in a future article - this will focus on the arbitration and expert determination procedures at rent review and PACT at lease renewal, together with the differences between acting as an expert witness and an advocate. 

As a small aside, it's important to note the difference between a conflict and a conflict of interest. In this article, we will be considering conflicts in the context of disputes.

In this article, we will consider:

• Why do negotiations break down?
• How can we avoid disputes?
• What is dispute resolution?
• What is litigation?
• What ADR procedures are available?
• What is mediation?
• What is conciliation?
• What is adjudication?
• What is arbitration?
• What is independent expert determination?
• What is the role of the RICS in dispute resolution?
• What could I be asked in my APC?

Why do negotiations break down?

There are many reasons for why negotiations might break down across the wide range of professional disciplines, e.g. landlord & tenant, building surveying, construction, agency:

• Money - unpaid rent, construction contract payments, unpaid invoices, incorrect amounts billed
• Delays - construction delays, parties not engaging in negotiations, taking too long to respond
• Defects - snagging issues, structural issues not detected for a substantial period of time
• Professional negligence
• Objectives - parties have differing objectives and cannot find common ground
• Personalities/emotions 
• Historic context
• Difference of professional opinion - evidence interpreted in different ways, opinion of market forces

How can we avoid disputes?

• Risk management - identifying the causes of disputes to minimise or avoid them
• Early warning signs - identifying early symptoms of problems, e.g. break down of communication, information flows diminish, increase in written notices/letters, late payment
• Partnering techniques - common agreement/commitment by stakeholders to pursue mutual goals and objectives prior to commencing work on a project or instruction, perhaps with the aid of neutral facilitators. This identifies potentials risks and manage sources of conflict at the outset
• Clear and robust client briefings

RICS have written an interesting case study based on Transport for London's conflict avoidance strategies.

What is dispute resolution?

Dispute resolution is simply a procedure to resolve conflicts between parties. 

Alternative dispute resolution (ADR) differs slightly in that it is a procedure to avoid litigation.

The benefits of ADR are:

• Typically cheaper and quicker than litigation
• More flexible process than Court proceedings governed by the Civil Procedure Rules
• Can be a confidential process
• Specialists/experts may be involved rather than lay judges (who may or may not have an understanding of property)

What is litigation?

This is the process of parties taking legal action through the Courts, defined by the Civil Procedure Rules. Litigation is a public process so it is not possible to preserve confidentiality.

Out of Court settlements may be agreed at the last minute to avoid further costs, based on the relative risks of the dispute.

What ADR procedures are available?

• Mediation 
• Conciliation
• Adjudication
• Arbitration
• Independent expert determination

What is mediation?

A confidential process where a neutral party facilitates negotiations between the parties.

What is conciliation?

Similar to mediation, although a conciliator is also required to express their opinion on the dispute.

What is adjudication?

A statutory UK dispute resolution procedure with a timeframe of 28-42 days, which is akin to a simple arbitration. 

It reaches an interim binding decision until the dispute is finally determined by another process, e.g. litigation, arbitration or mutual agreement.

What is arbitration?

Arbitration is governed by the Arbitration Act 1996, where a third party receives written evidence or verbal evidence at a hearing from the parties’ representatives and makes a legally binding decision. 

The arbitrator has powers of discovery (i.e. disclosure of documents or calling witnesses to give evidence) and has power to award all costs. There are limited grounds of appeal against an Arbitrator’s award and they are not liable for negligence.

What is independent expert determination?

An independent expert is appointed by the parties to give an expert opinion on the dispute. 

Depending on the terms of the contract/lease, they may be required to consider evidence from the parties’ representatives, may have to give a reasoned determination and may have power to determine part/all costs. 

An expert’s determination is not legally binding like an arbitrator’s award and they are liable for negligence.

What is the role of the RICS in dispute resolution? 

RICS runs the RICS Dispute Resolution Services, which is the largest provider of ADR services.

Examples include commercial property rent reviews, construction adjudications, dilapidations disputes, mediators, neighbour dispute specialist, Professional Arbitration on Court Terms (PACT) for lease renewal, service charge disputes

The RICS also provides professional guidance on dispute resolution, including:

• Mediation Guidance Note
• Conflicts of Interest for Members acting as Dispute Resolvers Guidance Note
• Independent Expert Determination Guidance Note

What could I be asked in my APC?

• When do disputes arise in your pathway?
• What can you do if negotiations break down?
• What are the methods of dispute resolution available to you?
• What are the difference between the types of dispute resolution you have experience with?
• What are the differences between arbitration and independent expert?
• What is the role of RICS in dispute resolution?

Further reading

• RICS DRS toolkit
• All about the RICS DRS (video)
• RICS conflict avoidance consultancy
• RICS guide to conflict avoidance
• RICS conflict avoidance pledge
• TED talk on negotiation and conflict management

Want to know more?

• Book your RICS APC final assessment review & feedback service - very limited availability so contact us before it's too late
• Sign up for your free CPD certificate

Stay tuned for our next blog post to help build a better you