GR CONSULTANTS AND CONFLICTS OF INTEREST

Conflicts of interest have the potential to undermine or compromise the impartiality, credibility or trustworthiness of a GR Consultant due to the possibility of a clash between the Consultant’s self-interest and a professional interest, or their public interest, or their client’s interest. A GR Consultant must avoid situations of conflict of interest, or situations that have the appearance of conflict of interest

A GR Consultant may be faced with a conflict of interest when undertaking an assignment. A conflict of interest creates a threat to objectivity and may create threats to the other fundamental principles of GR. Such threats may be created when:

• The GR Consultant undertakes an assignment related to a particular matter for two or more parties whose interests with respect to that matter are in conflict; or 
•  The interests of the GR Consultant with respect to a particular matter and the interests of a party for whom the GR Consultant undertakes an assignment related to that matter are in conflict.

A GR Consultant should not allow a conflict of interest to compromise professional or business judgment.

When identifying and evaluating the interests and relationships that might create a conflict of interest and implementing safeguards, when necessary, to eliminate or reduce any threat to compliance with the fundamental principles of GR to an acceptable level, a GR Consultant should  exercise professional judgment and take into account whether a reasonable and informed third party, weighing all the specific facts and circumstances available to the GR Consultant at the time, would be likely to conclude that compliance with the fundamental principles of GR is not compromised.

When addressing conflicts of interest, including making disclosures or sharing information within the firm or network and seeking guidance of third parties, the GR Consultant  should remain alert to the fundamental principle of confidentiality.

If the threat created by a conflict of interest is not at an acceptable level, the GR Consultant should apply safeguards to eliminate the threat or reduce it to an acceptable level. If safeguards cannot reduce the threat to an acceptable level, the GR Consultant should decline to perform or should discontinue professional services that would result in the conflict of interest; or should terminate relevant relationships or dispose of relevant interests to eliminate the threat or reduce it to an acceptable level.

Before accepting a new client relationship, engagement, or business relationship, a GR Consultant should take reasonable steps to identify circumstances that might create a conflict of interest, including identification of:

• The nature of the relevant interests and relationships between the parties involved; and
• The nature of the service and its implication for relevant parties.

The nature of the services and the relevant interests and relationships may change during the course of the engagement. This is particularly true when a GR Consultant is asked to conduct an engagement in a situation that may become adversarial, even though the parties who engage the GR Consultant  may not initially be involved in a dispute. The GR Consultant should remain alert to such changes for the purpose of identifying circumstances that might create a conflict of interest.

For the purpose of identifying interests and relationships that might create a conflict of interest, having an effective conflict identification process assists a GR Consultant  to identify actual or potential conflicts of interest prior to determining whether to accept an engagement and throughout an engagement. This includes matters identified by external parties, for example clients or potential clients. The earlier an actual or potential conflict of interest is identified, the greater the likelihood of the GR Consultant being able to apply safeguards, when necessary, to eliminate the threat to objectivity and any threat to compliance with other fundamental principles of GR or reduce it to an acceptable level. The process to identify actual or potential conflicts of interest will depend on such factors as:

• The nature of the GR professional services provided.
• The size of the firm.
• The size and nature of the client base.
•  The structure of the firm, for example, the number and geographic location of offices.

 If the firm is a member of a network, conflict identification should include any conflicts of interest that the GR Consultant has reason to believe may exist or might arise due to interests and relationships of a network firm. Reasonable steps to identify such interests and relationships involving a network firm will depend on factors such as the nature of the GR professional services provided, the clients served by the network and the geographic locations of all relevant parties.

If a conflict of interest is identified, the GR Consultant should evaluate:

• The significance of relevant interests or relationships; and
• The significance of the threats created by performing the GR professional service or services. In general, the more direct the connection between the GR professional service and the matter on which the parties’ interests are in conflict, the more significant the threat to objectivity and compliance with the other fundamental principles of GR will be.

The GR Consultant should  apply safeguards, when necessary, to eliminate the threats to compliance with the fundamental principles created by the conflict of interest or reduce them to an acceptable level.

In addition, it is generally necessary to disclose the nature of the conflict of interest and the related safeguards, if any, to clients affected by the conflict and, when safeguards are required to reduce the threat to an acceptable level, to obtain their consent to the GR Consultant performing the professional services.

Disclosure and consent may take different forms, for example:

•  General disclosure to clients of circumstances where the GR Consultant in keeping with common commercial practice, does not provide services exclusively for any one client in order for the client to provide general consent accordingly. Such disclosure might, for example, be made in the GR Consultant’s standard terms and conditions for the engagement.
• Specific disclosure to affected clients of the circumstances of the particular conflict, including a detailed presentation of the situation and a comprehensive explanation of any planned safeguards and the risks involved, sufficient to enable the client to make an informed decision with respect to the matter and to provide explicit consent accordingly.
•  In certain circumstances, consent may be implied by the client’s conduct where the GR Consultant has sufficient evidence to conclude that clients know the circumstances at the outset and have accepted the conflict of interest if they do not raise an objection to the existence of the conflict.

The GR Consultant determines whether the nature and significance of the conflict of interest is such that specific disclosure and explicit consent is necessary. For this purpose, the GR Consultant should exercise professional judgment in weighing the outcome of the evaluation of the circumstances that create a conflict of interest, including the parties that might be affected, the nature of the issues that might arise and the potential for the particular matter to develop in an unexpected manner.

Where a GR Consultant has requested explicit consent from a client and that consent has been refused by the client, the GR Consultant should decline to perform or should discontinue professional services that would result in the conflict of interest; or should terminate relevant relationships or dispose of relevant interests to eliminate the threat or reduce it to an acceptable level, such that consent can be obtained, after applying any additional safeguards if necessary.

When disclosure is verbal, or consent is verbal or implied, the GR Consultant is encouraged to document the nature of the circumstances giving rise to the conflict of interest, the safeguards applied to reduce the threats to an acceptable level and the consent obtained.

In certain circumstances, making specific disclosure for the purpose of obtaining explicit consent would result in a breach of confidentiality.  

The firm should not accept or continue an engagement under such circumstances unless the following conditions are met:

• The firm does not act in an advocacy role for one client where this requires the firm to assume an adversarial position against the other client with respect to the same matter;
• Specific mechanisms are in place to prevent disclosure of confidential information between the engagement teams serving the two clients; and
• The firm is satisfied that a reasonable and informed third party, weighing all the specific facts and circumstances available to the GR Consultant at the time, would be likely to conclude that it is appropriate for the firm to accept or continue the engagement because a restriction on the firm’s ability to provide the service would produce a disproportionate adverse outcome for the clients or other relevant third parties.

The GR Consultant should document the nature of the circumstances, including the role that the GR Consultant is to undertake, the specific mechanisms in place to prevent disclosure of information between the engagement teams serving the two clients and the rationale for the conclusion that it is appropriate to accept the engagement.