An end to conflicts of interest?

Conflicts of interest have, for years, been something about which solicitors have been concerned.  They will not act for a client if to do so would or could be perceived to put them in conflict with their own interests or duties owed to another party.

In March 2017, the RICS, after consultation with its members, produced a Professional Statement re conflicts of interest.  Launched at MIPIM 2017, the Statement is to apply globally to all members of and firms regulated by the RICS.  Its provisions are mandatory and came into force on 1 January 2018.

It states “An RICS member or regulated firm must not advise or represent a client where doing so would involve a Conflict of Interest or a significant risk of a Conflict of Interest; other that where all those who are or may be affected have provided their prior Informed Consent.

A Conflict of Interest might arise where the duty owed by a RICS member or regulated firm to one client or another party in a professional assignment conflicts with

  • the duty owed to another client or party in the same assignment (‘a Party Conflict’);
  • the interests of the same member or regulated firm or individuals within that firm involved directly or indirectly in the same assignment (‘an Own Interest Conflict); or
  • the duty owed to one client to provide material information conflicts with the duty owed to another to keep the same information confidential (‘a Confidential Information Conflict’).

All identified Conflicts of Interest must be managed in accordance with the Professional Statement.  Regulated firms are to have in place effective systems and controls to ensure it and its employees comply.  Additionally, all decisions made as to whether or not to accept the assignment, to obtain Informed Consent or of measures taken to avoid a Conflict of Interest must be recorded.

Informed Consent can only be sought where the member or regulated firm is satisfied that proceeding, despite the Conflict of Interest, is in the interests of all those who are or may be affected, is not prohibited by law and the conflict will not prevent the member or firms providing competent and diligent advice to those who may be affected.

Will the Professional Statement see an end to conflicts of interest?  We wait to see.

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