1. Ethics, Rules of Conduct & Professionalism

Question 1

What is the meaning of the RICS Motto?

Answer 1

There is a measure in all things

Question 2

What is the Mission Statement of the RICS?

Answer 2

• To qualify and equip their members to offer the highest standards of professional service.
• To promote and enforce standards
• To lead solutions to the major challenges facing the built environment through professional expertise.

Question 3

When was the RICS founded?

Answer 3

• It was founded in 1868.

Question 4

How is the RICS Structured?

Answer 4

• The RICS was founded in 1868 with the Royal Charter being granted by the Privy Council in1881.
• Under the royal charter The Governing council manage and agree the strategy for the RICS.
• The RICS Board and Standards and Regulation board are beneath the governing council and execute the strategy set by them.
• The RICS is self-regulated and internally monitored (meaning that it is not regulated by the Government or external parties.)
• The Bye-Laws determine how the RICS is regulated.

Question 5

What are the RICS’ 5 principles of better regulation?

Answer 5

• Proportionality.
• Accountability.
• Consistency.
• Targeting.
• Transparency.

Question 6

What is the difference between RICS ethics and rules of conduct?

Answer 6

• Ethics are a set of moral values.
• Rules of conduct are a framework that we work to.

Question 7

How many Global Professional and Ethical standards are there?

Answer 7

• Up until the 1st February 2022 there were 5 Global Professional & Ethical Standards.
• From the 2nd February 2022 onwards the Global Professional & Ethical Standards have been consolidated within the New Rules of Conduct 2022.

Question 8

What are the New Rules of Conduct?

Answer 8

• Rule 1. Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
• Rule 2. Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
• Rule 3. Members and firms must provide good-quality and diligent service.
• Rule 4. Members and firms must treat others with respect and encourage diversity and inclusion.
• Rule 5. Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.

Question 9

Why did the previous Rules of Conduct change?

Answer 9

• The previous rules had been in place since 2007.
• Following research and consultation with RICS Members, Firms and Members of the public, the majority voted in favour of replacing the existing Rules of Conduct and separate Global Professional and Ethical Standards.
• This was to provide a single document to enable greater clarity for RICS members and firms.
• I also understand there is now a greater focus on clearer example behaviours, understanding evolving technology and tackling climate change

Question 10

Talk us through your understanding of the Rules of Conduct changes?

Answer 10

• The Rules of Conduct October 2021 Global Practice Statement will overhaul the previous separate
  documents:
  o Rules of conduct for Members.
  o Rules of Conduct for Firms.
  o Global Professional and Ethical Standards.
• Appendix A of the Rules of Conduct now contains the professional obligations of Members and Firms.

Question 11

What are the professional obligations of members?

Answer 11

• 1. Members must comply with the CPD requirements set by the RICS which requires 20 hours of CPD for each calendar year, 10 hours of which must be formal CPD.
• 2. Members must cooperate with RICS.
• 3. Members must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.

Question 12

What are the professional obligations of firms?

Answer 12

Firms must publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log.

Firms must ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets the standards approved by RICS.

Firms must cooperate with RICS.

Firms must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.

Firms must report to RICS any matter that they are required to report under the Rules for the Registration of Firms.

Question 13

Please explain the steps of the RICS Ethics Decision Tree?

Answer 13

Yes

Question 14

Why does the RICS have Rules of Conduct?

Answer 14

• To provide a framework that we can all work to and so the client knows he is getting a set level of service.
• As well as being an important tool for the Institution, the Rules of Conduct are also a useful professional guide for individual institution members.

Question 15

Your brother-in-law is a chartered surveyor. You find out that he is working outside the RICS Rules of Conduct. What do you do?

Answer 15

• I verify the facts and confront him reminding him of his duties as a member of the RICS.
• I inform the RICS specifying my relationship to the person and any corrective action which I believe my brother-in-law is committed to put in place.

Question 16

In the case of a breach of a rule of conduct what is the procedure?

Answer 16

• Not every shortcoming will necessarily give rise to proceedings.
• A formal investigation by the Head of Regulation of the RICS is the first step in the process.
• The RICS can request information and/or visit and inspect to investigate compliance.
• Members must cooperate fully with all enquiries.

Question 17

How can a disciplinary proceeding be triggered?

Answer 17

• Someone complaining to the RICS.
• An allegation by a client or third party.
• Information received or established by the RICS.

Question 18

What three actions can be imposed after the end of the investigation stage?

Answer 18

• Fixed penalty.
• Consent order.
• Disciplinary panel

Question 19

What are fixed penalties?

Answer 19

A fine by the RICS.

Question 20

What are consent orders?

Answer 20

• It is a written agreement between the RICS and a member or firm concerning a disciplinary issue on a breach of the RICS rules.
• It can require the member to take certain corrective actions, or restrain them from taking certain actions for a specified period of time and may require them to pay a fine or costs.

Question 21

When is a disciplinary panel applicable?

Answer 21

• They are used for more serious breaches of conduct.
• The panel will usually be held in public.
• The burden of proof is on the RICS.
• A balance of probabilities approach will be adopted.

Question 22

What sort of breaches would expulsion be suitable for?

Answer 22

• Gross, persistent or willful failure to comply with an RICS rule of conduct.
• Fraud, dishonesty, conviction of a serious criminal offence, gross incompetence, deliberate discrimination, misappropriation of a client’s money.

Question 23

What procedures must you follow if you are starting up a new practice?

Answer 23

• Contact the RICS for guidance and obtain a company start up pack.
• Inform the RICS and register for regulation.
• Appoint a contact officer for all RICS communication.
• Prepare a complaints handling procedure.
• Obtain Professional indemnity insurance cover.
• Abide by the Rules of Conduct for Firms.
• Use the designation ‘Regulated by RICS’ on all practice material.

Question 24

Would you advertise your new company in the press?

Answer 24

Yes as long as it is in a trustful and responsible manner in line with the Rules of Conduct for Firms.

Question 25

What insurances would you need if you were starting up your own
firm?

Answer 25

• Professional Indemnity Insurance.
• Employer’s Liability.
• Public Liability.
• Building’s insurance of an office premises.

Question 26

What sort of information do registered firms have to send to the RICS
annually?

Answer 26

• It is called annual return and carried out on-line.
• Failure to do so leads to a fixed penalty.
• It includes:-
  o Type of business and staffing.
  o Nature of clients.
  o Training provision.
  o Complaints handling procedures details and records.
  o PI insurance details.
  o Whether the firm holds clients’ money.

Question 27

What processes do regulated firms need to put in place when handling
Clients’ Money?

Answer 27

Preserve the security of clients’ money which does not belong wholly to the company.
* RICS regulated firms that operate a client account must:-
o Set clear segregation of duties for employees.
o A Principal oversees the client money accounting functions.
o Principles cannot override controls.
o Competent and knowledgeable staff are to process clients’ money with cover provided for long
term absence.
o Accounting systems and data must be secure.
o Client money must be kept separate and clearly identifiable with the word ‘client’ included in
the bank account name.
o Clients must always have access to funds.
o We must agree the terms and advise the client on bank details.
o The account must not be overdrawn.
o We must maintain client ledgers and provide a running balance.

Question 28

What are the different types of client money accounts?

Answer 28

• General accounts hold money for more than one client.
• Discrete accounts reference a single named client.

Question 29

What is meant by the term Negligence?

Answer 29

• A duty of care is owed to all clients and 3rd parties using reasonable skill and care.
• If it is breached due to Negligence a claim may arise resulting in damages being paid or a Professional Indemnity Insurance claim.
• Negligence is a failure to provide the duty of care that is owed to the client.

Question 30

Tell us about the Merrit V Babb case law?

Answer 30

• This case dates back to 2001 and highlights the importance of having run-off cover in place.
• A surveyor was sued for negligence by a former client.
• Because the surveying firm was no longer in existence therefore the individual surveyor was pursued for damages successfully.
• This caused a big shock in the industry and highlighted the need to ensure that run-off cover is in place for all previous employees.

Question 31

What limitation periods are associated with underhand and deed
forms of contract?

Answer 31

• 6 years when executed under hand.
• 12 years when executed as a deed.

Question 32

What must a complaints handling procedure include?

Answer 32

• The RICS provides a model form.
• The process must include a redress mechanism.
• Details of the policy should be issued to the client with the Terms of Business.
• It must be clear, quick, transparent and impartial and free of charge within the first stage.
• Names and contact details of the nominated investigating person must be stated.
• The complaint must be investigated within 28 days.
• All complaints, their progress and outcomes must be recorded.
• We must note the need to advise PI insurers of a complaint immediately.
• The process must have two stages as a minimum:-
  o Stage 1 is where there needs to be consideration of the complaint by a senior member of the
  firm or the complaints handling officer.
  o Stage 2 if the issue is not resolved, the complaint is referred to an independent third party with
  the authority to award redress. The complainant may be expected to contribute towards costs
  at this stage.

Question 33

What is an independent redress scheme?

Answer 33

• It is a consumer scheme designed to handle small issues that would be disproportionally expensive to take to court.
• If the scheme judges in favour of the complainant, it is binding.
• If it judges in favour of the firm, the complainant can escalate the matter to court.
• RICS firms must specify which redress scheme they want to use, it could be an ombudsman,
  arbitration or sometimes adjudication.
• If the complaint relates to a large amount of money or if the complainant wishes so, he can take the matter to court.

Question 34

What do you do if you receive a letter of complaint?

Answer 34

• I would acknowledge receipt and I would forward it to my firms designated complaint handler, as per our complaint handling procedure, providing additional information as required.
• I would also highlight the importance of informing our Professional Indemnity insurance providers immediately.

Question 35

What is the ‘Clients’ Money Protection Scheme’?

Answer 35

• This is a money protection scheme operated by the RICS.
• It contains provision for any member of the public to be reimbursed their direct loss of funds when using an RICS regulated firm.
• This is provided through an RICS insurance policy.

Question 36

What is the purpose of the joint names on a client account?

Answer 36

• For the purpose of dual authorisation.

Question 37

What are the continuous professional development (CPD) requirements?

Answer 37

• Members must undertake and record appropriate lifelong learning.
• On request by the RICS they must provide evidence that they have carried out the CPD to maintain
  and improve their levels of professional competence.

Question 38

How many hours must you do?

Answer 38

• A minimum of 20 hours CPD must be achieved per calendar year, of which a minimum 10 hours must be formal.
• Members must undertake learning on the standards expected around RICS Ethics on a rolling 3-year period.
• All CPD’s must be recorded via the RICS on-line management system.

Question 39

What sorts of activities are included?

Answer 39

• It must have a clear learning objective relevant to my role to count as CPD.
• Formal CPD can be classed as web based training with structured assessments, formal seminars, providing training to others where research and preparation is required.
• Informal CPD is classed as private reading, internal CPD’s and on the job shadowing.

Question 40

What types of articles do you read?

Answer 40

• My employer’s research & development team send us weekly digests of the relevant press and I request
  copies of articles of interest.
• I also read the RICS journals (Modus, Construction Journal, RICS regional magazine).
• I also keep up to date via the RICS website, Building Magazine, Estates Gazette and BCIS updates.

Question 41

What recent article have you read from the RICS?

Answer 41

• This is going to be specific to the candidate’s own reading.
• Be sure to have a couple of articles in mind that you are able to talk through with the assessors.

Question 42

How do you keep up to date with topical issues?

Answer 42

• I am on the mailing list for several CPD providers.
• My employer’s research & development team send us weekly digests of the relevant press and I request
  copies of articles of interest.
• I also exchange industry articles and relevant information with colleagues.
• I follow updates on the RICS website and Construction Journals
• I undertake regular web research on key topics relevant to my field of surveying.

Question 43

What is your CPD strategy

Answer 43

• I meet with my manager twice a year to review my career development plan and objectives.
• I build my CPD strategy around these objectives, current topics and personal interests.
• The candidate should try to explain their own personal objectives to address this question.

Question 44

What does PII stand for?

Answer 44

• Professional Indemnity Insurance.

Question 45

What is the purpose of Professional Indemnity Insurance?

Answer 45

• To provide financial cover in the event a client suffers financial loss as a result of a breach of professional duty e.g. neglect, errors or omissions.

Question 46

What benefits does PII provide for the professional?

Answer 46

• The professional is protected from financial losses.
• The firm does not have to meet the claim from their own assets and resources.

Question 47

What benefits does PII provide for the client?

Answer 47

• They are able to recover their financial losses.

Question 48

On what basis is PII underwritten in the UK?

Answer 48

On a claims made basis.

Question 49

What does this mean?

Answer 49

• The insurance policy that is in place at the time the breach is discovered is responsible for providing the indemnity, not the insurance policy in place when the breach was made.

Question 50

What are the requirements regarding Professional Indemnity Insurance set by the RICS?

Answer 50

• The policy cover must be made on an ‘each and every’ claim basis.
• The RICS sets out the minimum levels of indemnity.
• The RICS sets out the maximum levels of uninsured excess.
• Run off cover must be in place for at least 6 years.
• The policy should include cover for past and present employees, directors and partners.

Question 51

What are the new RICS minimum levels of indemnity and Maximum levels of uninsured excess?

Answer 51

100,000 or less - minimum indemnity is £250,000
100,001-200,000 - £500,000
200,001 and above £1,000,000

Maximum levels of uninsured excess

Question 52

What measures should be taken to try and avoid PI claims?

Answer 52

• Keep full and detailed records of meetings and conversations.
• Record recommendations and advice given.
• Use proper letters of engagement, scope of services and terms of engagement.
• Don’t advise on a specialism outside your field of experience.
• Use RICS guidelines.
• Avoid poor management and excessive workloads

Question 53

If you made a mistake in your cost plan what would your insurance company expect?

Answer 53

• For you to notify them and comply with any conditions & procedures set out in the insurance policy.

Question 54

If an estimate prepared by a QS is incorrect can the client claim damages?

Answer 54

• An estimate that is incorrect in itself will not provide the client with a right of redress.
• The client must demonstrate that the QS warranted the accuracy of the estimate or that it was incorrect due to a lack of reasonable skill and care.
• It could have been incorrect due to reasons outside their control for example market conditions or an item referred to in their exclusions.

Question 55

How can you limit your liability when agreeing terms of appointment
with a client?

Answer 55

• Base the appointment on reasonable care and skill rather than fitness for purpose which is more onerous.
• If the client’s requirements are performance based, this may imply fitness for purpose. It is advisable to request a clause limiting the appointment to reasonable skill and care only.
• Run off cover must be in place.
• Execution of the appointment under hand will result in a reduced liability period of 6 years instead of 12.

Question 56

What are the main elements included within a fee proposal?

Answer 56

• Terms and conditions.
• Scope of services.
• Exclusions.
• Assumptions.

Question 57

If you put together a fee proposal, but a couple of months into the job you realise that you have under forecasted your resources, would you go back to the client and ask for more money?

Answer 57

• If project requirements such as the services, scope or value of the project has increased then I would go back to client and request a fee increase.
• If the scope of works had remained the same, this highlights a mistake within our fee bid and the additional work would need to be carried out without reducing the level of service being offered and without requesting additional fees from the client.

Question 58

Once you and your client agreed the services that are to be provided verbally what would you do next?

Answer 58

• Follow up with a formal letter which includes the terms and conditions, fees and scope of services that are to be provided.

Question 59

If the client gives you a lump sum fee before going on holiday, what would you do?

Answer 59

I would place the funds in a separately identified client account and agree a drawdown of monies against the services being provided with the client.

Question 60

Tell me what you understand about conflicts of interest?

Answer 60

• A conflict of interest is where someone in a position of trust has competing personal or professional interests making it difficult for them to fulfil their duties impartially.
• An existing relationship will result in reduced impartiality and Chartered Surveyors have an obligation to make clients aware of this and if necessary, decline work opportunities where a conflict of interest occurs.

Question 61

How could the conflict of interest be managed internally if two separate departments were working for the same client?

Answer 61

• I could put in place procedures to ensure exclusivity of staff.
• This would avoid any cross over of information between the departments.
• I would also ensure that there are separate communication lines into the client.
• Separate geographical locations and secure office and data storage would also need to be provided.
• Staff could also sign up to confidentiality or non-disclosure agreements.
• I would also need to monitor the potential conflict and keep the client updated on progress.

Question 62

If the client was insistent that you worked for them despite an existing
conflict of interest, how would you proceed?

Answer 62

• I would check the clients understanding around the conflict of interest.
• I would then make the client aware of the potential for reduced impartiality.
• If they were still insistent on the appointment, I would seek a letter of instruction from the client to
  continue.
• Following the appointment I would agree working procedures to manage the conflict of interest with
  the client and the teams involved.

Question 63

What are the Main Principles of the Bribery Act?

Answer 63

• The offences are:-
  o Making a bribe.
  o Receiving a bribe.
  o Bribery of a foreign public official.
  o Failure of a corporate entity to prevent bribery on its behalf.
• The legislation applies to all UK Entities and includes associated Persons for example sub-consultants
  and external advisors.
• There are six principles of prevention companies should put in place:-
  o 1. Proportionate Procedures.
  o 2. Top Level Commitment.
  o 3. Risk Assessments.
  o 4. Due Diligence.
  o 5. Communication.
  o 6. Monitoring & Review.

Question 64

Under the Bribery Act, under what circumstance is a facilitation
payment permitted?

Answer 64

• The only circumstance in which it is OK to make a facilitation payment is when you are under duress.
• For example if there is a real and present risk or danger to “life, limb or liberty”.
• If you or your companions are under immediate physical threat.
• You should put safety first, make the payment and report the matter immediately.
• Or as soon as is practicable to your manager or your ethics compliance contact.

Question 65

You are attending a Main Contractor organised business conference
where it is announced the you have been randomly selected as the
winner of this months prize draw. Its an i-pad air. How would you act
in this scenario?

Answer 65

• I would be extremely uncomfortable accepting the prize in this scenario.
• The prize is of a significant value and could be interpreted as a bribe.
• Furthermore due to working on a project with the Main Contractor at the time of this scenario,
  accepting the prize would have been highly inappropriate and could be interpreted as having an affect
  on my business conduct during the project.
• I would respectfully decline the prize and suggest that this is made as a charitable donation to a charity of the Main Contractor’s choice.
• I am aware that bribes are commonly distributed as random prizes and due to the seriousness of this
  incident I would report this to my line manager.

Question 66

You receive an invite to attend the Theatre with some members of
your Project Team but they dropped out due to illness at the last
minute, would you still attend?

Answer 66

• In the first instance I would declare this hospitality on my companies’ gifts and hospitality register.
• Assuming the invite was approved and I was authorised to attend, I would need to decline the invite
  due to the Project Team dropping out.
• Since they won’t be present, this will not be a genuine business event.
• Consequently, I would decline this hospitality at the Project Team’s expense

Question 67

A contractor invites you to lunch to a restaurant and advises they’ve
got two Michelin stars and a wine list second to none. They say they
are keen to discuss the details of their tender they are about to submit
for the project you are working on. How would you respond?

Answer 67

• Going to what sounds like a lavish lunch paid for by a bidder in the middle of a tender process is
  against Company policy and could be an offence under the UK Bribery Act.
• If this were the first time, it would be OK just to decline and explain that such an invitation is
  inappropriate.
• However if this supplier is persistent, there is a red flag in that he wants to discuss things that he cannot put in writing, so we should report this infringement

Question 68

What is Rule of Conduct 1

Answer 68

Members and firms must be honest, act with integrity and comply with their professional obligations including obligations to RICS

Question 69

What is Rule of Conduct 2

Answer 69

Members and firms must maintain their professional competence, and ensure services are provided by competent individuals who have the necessary experience

Question 70

What is Rule of Conduct 3

Answer 70

Members and firms must provide good quality and diligent service

Question 71

What is Rule of Conduct 4

Answer 71

Members and firms must treat others with respect and encourage diversity and inclusion

Question 72

What is Rule of Conduct 5

Answer 72

Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession