Conduct rules, ethics and professional practice Flashcards
What standards are required for sole practitioners to be compliant with the RICS regulations ?
Rules of conduct for firms.
What are the RICS rules of conduct for members?
-ICE SSI CCC Interpretation Communication Ethical Behavior Services Solvency Information to RICS CPD Competence Co-operation
What are the RICS rules of conduct for firms?
-IC
Interpretation
Communication
-CCC PAPA SICCUS
Competence
Cooperation
CPD
PI insurance
Advertising
Professional Behaviour
Arrangements to cover death of sole practitioner
Service Information to RICS Complaints handling procedure Client's money handling procedure Use of designations Solvency
What are the different status types of RICS documents?
- Mandatory (Information standards, professional statements)
- Recommended best practice (RICS guidance note, Code of practice)
- Information only (RICS information paper, RICS insight, RICS economic report, research)
What is meant by ‘treat others with respect’?
Be courteous, polite and consider cultural sensitivities and business practices
Never discriminate, encourage the fair and respectful treatment of clients
Why are the ethical standards important?
Create a clear and streamlined guide to members to ensure that clients and anyone else who deals with the RICS has confidence in the profession
What factors does the RICS Decision Tree consider?
Sufficient facts Legality Ethical standards Consultation of appropriate people Clear reasoning Impact if actions made public
Give some examples of how you reflect the RICS ethical standards in your work.
- Integrity - turning down an invitation from the client whilst bidding for consultancy services
- High standard of service - referring clients to specialists when scope is outside competence EG. VAT is not my speciality.
- Trust - Letting the contractor know that they have undervalued their work
- Respect - Despite being in a dispute over a variation, I spoke in a respectful manner
- Responsibility - reporting dangerous practices on site, such as spanner falling between scaffold board.
What is the RICS Decision Tree?
Flowchart to help members decide how to act in difficult situations where their professional ethics may be at stake
What is a ‘Chinese Wall’? (now informed consent/ information barrier)
An information barrier within an organisation used in order to prevent exchanges or communication that could lead to a conflict of interest
What is meant by ‘act with integrity’?
Being honest and trustworthy in all that I do
Transparent, respecting confidential information, not taking advantage of anyone, not allowing bias or pressures affect my judgement or obligations, not accepting gifts or hospitality that might suggest an improper obligation, acting in the interest of the public
What is meant by ‘take responsibility’?
Be accountable for my actions and don’t blame others if things go wrong
Always act with skill, care and diligence, respond to complaints in the appropriate professional manner, prepare to question things that don’t seem right
What is a bribe?
The exchange of something of value in return for someone doing or agreeing to do something improper in a business context
Bribery also covers the offer or request for a bribe, even if it is not completed
What is meant by ‘provide a high level of service’?
Ensuring the best possible advice, support or performance is given to my clients
Be clear about the service being provided, act within my scope of competence, transparent about fees and any other costs or payments, communicate with clients in a way that allows them to make informed decisions
What are the penalties under the current bribery legislation?
A maximum 10 years’ imprisonment and/or an unlimited fine
Give some examples of where conflicts of interest may arise.
- Acting for two different parties with competing interests at the same time
- Financial interests (e.g. gaining over and above your normal fee)
- Personal relationship
- Commercial relationship
- Interests of your firm conflict with that of your client
What is a conflict of interest?
A situation which effects the impartiality of one party. Anything that impedes or might be perceived to impede an individual’s or firm’s ability to act impartially and in the best interest of a client.
What should a surveyor do if a conflict of interest arises?
Should be dealt with by implementing openness and transparency
Declare any conflicts of interest clearly to all parties ASAP and offer to stand down from acting for any party
All parties can then decide how they wish to proceed and if there are any objections you must stand down
Your neighbour asks you for help in designing a loft conversion - what would you do?
No terms and conditions
No PII
Potential conflict of interest
Follow the RICS Decision Tree
Say no and offer to set up a formal meeting with a director of my firm
Alternatively, refer them to the RICS ‘Find a Surveyor’ service
Who does the current bribery legislation affect?
Near-universal jurisdiction, allowing for prosecution of UK individuals or companies doing business overseas, as well as overseas individuals or companies doing business in the UK
What is meant by ‘promote trust within the profession’?
Act in a manner, both in professional and private life, that promotes me and my firm in a positive way
Promote the highest standards globally, amending behaviour to suit others, fulfil obligations
What legislation exists in relation to bribery in the UK?
Bribery Act 2010
How would you define ethical behaviour for a chartered surveyor?
Acting in accordance with the 5 RICS professional and ethical standards
What procedures should RICS corporate members follow in relation to preventing bribery?
RICS corporate members should follow the 6 principles in preventing bribery practices:
Proportionate procedures - procedures should be proportionate to the bribery risks the company faces
Top level commitment - zero tolerance to bribery
Risk assessment - the company should periodically assess the internal and external risks of bribery
Due diligence - systematically investigate employees and business partners (the level of which should be informed by the risk assessment)
Communication (including training) - communicate policies, operate confidential whistle-blowing service, provide training
Monitor and review - periodically review procedures and make improvements where necessary
What are facilitation payments and what is their legal status?
Also known as ‘grease’ or ‘speed’ payments
Unofficial payments made to public officials in order to secure or expedite the performance of a routine government action
Illegal under the Bribery Act 2010
If a contractor wants to buy you lunch on the day of an interim valuation, how would you respond?
Reject the offer, as it may improperly influence your decisions/judgement or give the appearance of doing so
A contractor invites you to their Christmas dinner dance - would you go?
Maybe, however only offer or accept gifts and hospitality that you would be happy for others to know about
Question whether the gift is proportionate and reasonable in terms of value and frequency
Reject if it may improperly influence your decisions/judgement or give the appearance of doing so
A contractor gives you a bottle of champagne at Christmas. Would you accept it?
Maybe, however only offer or accept gifts and hospitality that you would be happy for others to know about
Question whether the gift is proportionate and reasonable in terms of value and frequency
Reject if it may improperly influence your decisions/judgement or give the appearance of doing so
What considerations should RICS members have in relation to offering or accepting gifts and hospitality?
Only offer or accept gifts and hospitality that are customary, proportionate and reasonable in terms of value and frequency
Never offer or accept any gift or hospitality if it may improperly influence your decisions/judgement or give the appearance of doing so (e.g. consider the timing of the gift)
Only offer or accept gifts and hospitality that you would be happy for others to know about
Follow the policies and procedures of your employer in relation to gifts, hospitality and promotional expenditure - e.g. record in company’s gifts and hospitality register
Report any concerns about bribery to your employer or to RICS Regulation
What is the purpose of the current UK legislation on bribery?
Criminalises bribery in the UK, making it a criminal offence to directly or indirectly:
Offer, promise or give a bribe
Request, agree to receive or accept a bribe
What would you do if a contractor offers you a gift such as a scale rule with the contractor’s name on it?
Accept it, as it is a bona fide promotion intended to improve the image of an organisation
Would the offer or acceptance of gifts or hospitality amount to a bribe?
Could amount to a bribe if they are intended to induce someone to behave in a manner that breaches an expectation that they will act in good faith and impartially
However, bona fide hospitality and promotion intended to improve the image of an organisation, better present products and services or establish cordial relations is seen as an established and important part of doing business and is not criminalised under the Act
Describe a conflict of interest you have experienced and how it was resolved.
As my firm is multi-disciplinary, there are certain clients who employ different disciplines. To prevent any wrongdoing, my firm ensures they are separate fee amounts, there is an information barrier and there is informed consent.
What standard are judgements under the current bribery legislation based upon?
Judgments are decided based on the ‘reasonable person’ test
Would you go against the recommendations of a chartered surveyor?
Yes providing there is reason for it (e.g. not acting within the RICS rules of conduct or ethical standards)
You have put in a fee bid to a client. They contact you and say that another practice has quoted a lower fee, but they would like you to do the work. They ask you to reduce your fee to match the other practice. What should you do?
The other practice may not exist and could be a negotiating tactic. The scope of the works may be different.
Avoid price fixing, aggressive fee cutting or collusion with competitors.
Original fee quote should have been a reasonable reflection of the works required.
Reducing costs may mean corners are cut and quality is reduced in order to make a profit.
Client may be expecting the same next time as well and this will not be sustainable.
Can chartered surveying practices work for a client, but not charge a fee?
Commercial decision based on the opportunity and risk (i.e. may be charitable work).
Need to question quality of work and incentive if no fee is in place.
Legal advice required regarding the formation of a contract (i.e. no consideration).
Can one part of a chartered surveying practice work for a client, whilst another part of the practice is working for a different client who has conflicting interests to the first?
Yes, providing a Chinese wall is effectively implemented (now information barrier).
Teams should be physically separated in different parts of the building (or in different buildings)
Requires a compliance officer to monitor the ‘wall’ - education and training must be made available to those managing the wall
If you saw one of your team send out an interim valuation that over values the works, what do you do?
Talk to them initially and point out the error
Suggest the error is corrected before issuing
Escalate to a director if the error was purposeful
Consider reporting through firm’s whistleblowing procedure if necessary
If you were self-employed, would you consider adjusting your PII to carry out a piece of work or decline to do the work?
Commercial decision based on the opportunity and risk
Never proceed without the sufficient level of PII
What does having the PII policy written on a full civil liability basis mean?
A full civil liability basis means if a claim isn’t specifically excluded, it’s included (as opposed to a ‘negligence only’ policy, where if a claim is not specifically included, it’s excluded)
Explain the term ‘claims made basis’.
The policy at the time the claim is made will respond, not the policy in place at the time of the negligence.
Insurer will only pay out if the policy was within the period of the insurance, not after, unless there is run off cover.
Does the RICS publish any guidance on the Disciplinary Measures?
Yes, there is a large section on the RICS website.
Who is the president of the RICS?
Who is the vice president of the RICS?
Who is the senior vice president of the RICS?
Who is the CEO of the RICS?
Tim Neal.
Kath Fontana
Clement Lau
Sean Tomkins
What is the Royal Charter?
Awarded in 1881 by Queen Victoria, to maintain and promote the usefulness of the profession for the public advantage.
Can you name some of the professional groups?
• Quantity Surveying and Construction. • Project Management. • Building Surveying. • Planning and Development • Commercial Property Residential • Dispute Resolution.
What are fixed penalties and when are they issued?
A fixed penalty is an administrative fine and/or caution issued by RICS when a Regulated Member fails to provide us with information that we have requested. This information can include: a firm or valuer submitting their annual return record, updating CPD records or payment of regulatory fees.
What replaced consent orders from 1 October 2019?
A Regulatory Compliance Order is an agreement between RICS and a Regulated Member that they are liable for disciplinary action (a Regulated Member is and RICS professional or regulated firm). The Regulated Member:
- admits that they have fallen short of the standards expected
- agrees to an appropriate sanction
- in some cases, take steps to meet the standards expected and/or to prevent it happening again
What does a regulatory compliance order consist of?
1) Caution
2) Reprimand
3) A requirement that the Regulated Member gives one or more undertakings as to future conduct
4) A requirement that the Regulated Member takes or stops taking certain actions within a specified period of time
5) Conditions on the Regulated member’s continued membership of RICS
6) Conditions on a Regulated Members registration for regulation
7) A requirement that the Regulated Member pays a fine of up to £2000 per breach
Can you tell me more about the New Arbitration Service?
- Brought in due to a decline in the use of Arbitration due its slowness.
- Arbitrators are supervised to ensure they use the powers given to them under the Arbitration Act 1996 to robustly manage costs.
- Will be faster and cheaper than courts.
- Will be better than adjudication, as it will be more detailed when looking at an issue, resulting in judgements that are commercially sensible.
Can you describe the RICS governing structure to me?
1. At the top is the Governing Council. Management board Regulatory tribunal Audit committee Presidential nominations committee Standards and regulation board Nominations committee
What are the three market sectors covered by the RICS?
Land, Property, Construction
What is meant by ‘professional behaviour’ as one of the 15 rules for firms?
Shall at all times act with integrity and avoid conflicts of interest and avoid any actions or situations that are inconsistent with its professional obligations.
What is meant by ‘competence’ as one of the 15 rules for firms?
Shall carry out its professional work with due skill, care and diligence and with proper regard for the technical standards expected of it.
What is meant by ‘service’ as one of the 15 rules for firms?
Shall carry out its professional work with expedition and with proper regard for standards of service and customer care expected of it.
What is meant by ‘CPD’ as one of the 15 rules for firms?
Shall have in place the necessary procedures to ensure that all its staff are properly trained and competent to do their work.
What is meant by ‘complaints handling’ as one of the 15 rules for firms?
Shall operate a complaints handling procedure and maintain a complaints log. The complaints handling procedure must include an Alternative Dispute Resolution (ADR) that is approved by the Regulatory Board.
What is meant by ‘client’s money’ as one of the 15 rules for firms?
Shall preserve the security of clients’ money entrusted to its care in the course of its practice or business.
What is meant by ‘professional indemnity insurance’ as one of the 15 rules for firms?
Shall ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity insurance cover which meets standards approved by the Regulatory Board.
What is meant by ‘advertising’ as one of the 15 rules for firms?
Shall promote its professional services only in a truthful and responsible manner.
What is meant by ‘solvency’ as one of the 15 rules for firms?
Shall ensure that its finances are managed appropriately.
What is meant by ‘arrangements to cover the incapacity or death of a sole practitioner:’ as one of the 15 rules for firms?
That has a sole principal (i.e. a sole practitioner or a sole director in a corporate practice) shall have in place appropriate arrangements in the event of that sole principal’s death or incapacity or other extended absences.
What is meant by ‘Use of designations’ as one of the 15 rules for firms?
Registered for regulation must display on its business literature, in accordance with the Regulatory Board’s published policy on designations, a designation to denote that it is regulated by RICS.
What is meant by ‘Information to RICS:’ as one of the 15 rules for firms?
Shall submit in a timely manner such information about its activities, and in such form, as the Regulatory Board may reasonably require.
What is meant by ‘Co-operation:’ as one of the 15 rules for firms?
Shall co-operate fully with RICS staff and any person appointed by the Regulatory Board.
What is meant by ‘Professional behaviour’ as one of the 9 rules for members?
Members shall at all times act with integrity and avoid conflicts of interest and avoid any actions or situations that are inconsistent with their professional obligations.
What is meant by ‘Competence:’ as one of the 9 rules for members?
Members shall carry out their professional work with due skill, care and diligence and with proper regard for the technical standards expected of them.
What is meant by ‘service’ as one of the 9 rules for members?
Members shall carry out their professional work in a timely manner and with proper regard for standards of service and customer care expected of them.
What is meant by ‘CPD’ as one of the 9 rules for members?
Members shall comply with RICS’ requirements in respect of continuing professional development.
What is meant by ‘solvency’ as one of the 9 rules for members?
Members shall ensure that their personal and professional finances are managed appropriately.
What is meant by ‘information to RICS’ as one of the 9 rules for members?
Members shall submit in a timely manner such information, and in such form, as the Regulatory Board may reasonably require.
What is meant by ‘Co-Operation’ as one of the 9 rules for members?
Members shall cooperate fully with RICS staff and any person appointed by the Regulatory Board.
What does the RICS state about PI insurance?
Rule 9 of the RICS Rules of Conduct for Firms requires all regulated firms to be covered adequate and appropriate PII which meets the standards approved by the Regulatory Board
What should a PII policy contain?
1) Must be on a claims made basis
2) Must be on an each and every claim basis
3) Policy wording is written on a full civil liability basis
4) Underwritten by a listed insurer
5) Covers past and present employees
6) Run-off cover
7) Minimum level of indemnity required by the RICS
What is PII and what is its purpose?
Professional Indemnity Insurance (PII):
Protects firms against losses resulting from professional negligence, errors and/or omissions which cause financial loss to a third party
Ensures a firm’s clients do not suffer financial loss which the firm cannot meet
How would you determine what is sufficient in terms of PII runoff cover?
Should be for a minimum of 6 or 12 years, depending on how the contract was executed, however negligence claims can be made up to 15 years after work was undertaken - advice from an insurance broker should be sought as to whether to maintain for the full 15 years
What is generally excluded from PII cover?
1) Material damage
2) Theft
3) Personal injury
4) Damage to third party property
5) Work carried out prior to the inception of the policy
6) Insured v insured claims (i.e. a company suing an employee for professional negligence)
7) Insolvency
What are the minimum levels of PII required?
1) £100,000 or less turnover = min. £250,000 indemnity
2 )£100,001 to £200,000 turnover = min. £500,000 indemnity
3) £200,001 and above turnover = min. £1,000,000 indemnity
What should you do in case of a potential claim on your PII?
Must notify insurer in the event of:
An actual claim
A written or verbal threat of a claim
Any circumstance that the firm has reason to believe may result in a claim
Any complaint notified via the firm’s CHP
How can negligence claims be avoided?
1) Good communication
2) Clearly understand client’s objectives and confirm precise details
3) Check you are competent to perform the instruction
4) Undertake work in accordance with any relevant RICS guidance
5) Keep up-to-date notes
6) Be aware of changes in legislation
7) Try and resolve any complaints as soon as possible
What is the RICS Assigned Risk Pool?
1) Insurance facility for regulated firms that find themselves unable to obtain PII in the normal market
2) Firms can remain in the ARP for a maximum of 3 years, where they will be audited and guided in how to amend their business procedures/practices ready to obtain market PII again
What is the Carsberg Report?
A report undertaken in 2005 as a result of members general dissatisfaction with the RICS’ internal Regulatory procedures.
What are the five principles of better regulation for?
Whenever RICS receive a complaint or conduct an investigation, there are five principles that dictate their regulatory process.
What is meant by proportionality as part of the 5 principles of better regulation?
Looking at the seriousness of the contravening of the rules, for example, was the contravening just the use of an old logo. Regulating when necessary and taking actions that are appropriate and legitimate.
What is meant by Accountability as part of the 5 principles of better regulation?
Making sure there is a structure in place so everyone knows what they should be doing. Able to justify any action and decision, ensuring transparency and be subjected to public scrutiny.
What is meant by consistency as part of the 5 principles of better regulation?
Making sure the rules are applied in a common way to every member and firm. Ensuring a common mind set and approach to promote fairness.
What is meant by targeting as part of the 5 principles of better regulation?
Focused and unambiguous regulation based on risk.
What is meant by transparency as part of the 5 principles of better regulation?
Ensuring clear definitions, effective consultation and communication is always used.
What must a RICS regulated firm do in relation to bribery and corruption?
- Not offer or accept, directly or indirectly, anything that could constitute a bribe
- Have plans in place to comply with applicable laws governing bribery and corruption and ensure that these are followed
- Report any activity they are aware of that breaches anti-bribery and corruptions laws to the relevant authorities (as specified in local legislation) where there is no legislation the activity should be recorded and if possible reported to a senior colleague.
- act with due diligence to perform periodic written evaluations of the risks that face the firm and that may lead to the facilitation of bribery and corruption; in determining the appropriate level of due diligence, the firm may consider the type of business activities they engage in and the environment in which they operate.
- Retain information detailing how the firm has met the requirements of this professional statement
What must a RICS regulated member do in relation to bribery and corruption?
- not offer or accept, directly or indirectly anything that could constitute a bribe
- ensure that they have adequate knowledge of bribery and corruption to be able to comply with the requirements of this professional statement
- Report any activity they are aware of that breaches applicable anti-bribery and corruption laws to the relevant authorities; where there is no legislation the activity should be recorded and, if possible, reported to a senior manager.
What must a RICS regulated firm do in relation to money laundering and terrorist financing?
- not facilitate or be complicit in any money laundering or terrorist financing
- Report any suspicions to relevant authority
- Evaluate and review periodically the risks that prospective and existing business relationships present in terms of ML and TF
- Ensure that their responses to the risks identified are appropriate, including conducting appropriate checks on clients and customers.
- use reliance only where there is an appropriate level of confidence in the quality of the information provided by the third party – reliance should only be taken from third parties with standards conforming to the legal requirements, that provide the obliged market participant with a complete exchange of all legally required AML information regarding the identified party and only by confirming the identity and verification of identity of the client or counterpart in question; ultimate responsibility for the assessment of risk and actions taken based on this remain with the member or regulated firm
- take appropriate measures to understand the client and the purpose of the transaction
- verify the identity of their client by undertaking basic identity checks
- record and retain information detailing how the firm has met the requirements of this professional statement.
What must a RICS regulated member do in relation to money laundering and terrorist financing?
- not facilitate or be complicit in money laundering or terrorist financing activities
- report any suspicions of money laundering or terrorist financing activities to the relevant authorities (as specified in local legislation); where there is no local legislation the activity should be recorded and, if possible, reported to a senior manager.
What procedures should a RICS regulated firm have in place to prevent bribery?
- Have a written policy covering anti bribery and corruption
- appropriate governance and systems, proportionate to the type of work the firm does
- Encourage transparency through implementing a register (for gifts, hospitality, travel, political contributions, donations, conflict of interest)
- Provide clear guidance for staff so they understand their role in preventing bribery and are aware what: facilitation payments, bribes, price fixing to create monopoly or cartel, failure to declare conflict of interest
- appoint contactable person in business to discuss compliance and ethics matters
- Publish a code of behavior and provide this to staff
- Carry out due diligence checks on suppliers to ensure they act appropriately.
What should a complaints handling procedure entail?
- be fit for purpose – it should reflect the size and structure of the business
- made available to all staff – a CHP is intended to provide clarity and consistency to staff and clients
- be understood by all staff – keep records of staff training
- readily be shared with complainants or potential complainants – supplying them with a copy should be routine
- be regularly reviewed at a senior level – record evidence of review, to include reviewer details and review date
- be agreed with PII brokers/provider(s) – the CHP should reflect processes that do not compromise PII cover and
- provide details of access to independent redress if the firm cannot resolve the complaint.
What are the signs of money laundering?
- Client asks to make payment in huge amount in cash (above £15,000)
- High risk countries involved
- Client has unusually high levels of knowledge about money laundering
- Business entity not on internet or uses unusual domain eg. hotmail or yahoo.
- Client secret about true identity
- No obvious purpose for a transaction.
- Large financial transactions by recently created companies.
Why would attending a cricket match be bad?
- Integrity
- Conflict of interest
What are the steps you would take when undertaking a conflict of interest?
- Inform client of conflict of interest
Name some examples of RICS information which is information only.
- Information paper
- RICS insights
- RICS economic/market reports
- RICS consumer guides
- RICS Research
What is a complaint?
An expression of dissatisfaction.
What is good complaint handling?
- Ensure all staff members have access to and an understanding of a firm’s CHP
- Carefully record all complaints at the earliest opportunity
- Establish an adhere to a review process to ensure effective management
How were you acting in accordance with the bribery act 2010 when rejecting the offer for a cricket match on Imperial Street?
I made sure to act as a reasonable person would do in this situation and as the project was at a critical tender stage, accepting the offer may constitute a bribe and an unfair advantage to other tenderers. This could compromise my integrity, constitute a conflict of interest and fail a reasonable person test.
How many RICS members are there?
Over 180,000 which includes 80,000 students and trainees.
What has the RICS published in regards to bribery and money laundering?
In 2019 the RICS published the professional statement: countering money laundering, bribery and terrorist financing.
What roles and responsibilities should firms have in place in order to counter bribery and money laundering practices?
A person who is responsible for ensuring anti-money laundering policies are in place and are complied with and any key risks
Why appoint a compliance and ethics champion?
Appointing a compliance and ethics champion is potentially a very effective way to help embed systems that detect an counter money laundering and terrorist financing, bribery and corruption.
What is customer due diligence (CDD)?
This involves collecting standard evidence to verify the identity of different types of clients and carry out additional checks if necessary. An assessment of the likelihood that a client is laundering money or financing terrorists must be made by the employee.
What can or cant RICS regulate in terms of complaints?
RICS must follow the 5 Principles of better regulation when assessing complaints. This needs to be on a case by case basis and must be proportionate
What are the RICS global and ethical standards?
These are the same as the 5 ethical standards however are now known as the global standards.
Why do we have the Rules for conduct?
This is to maintain standards for RICS members.
What is the difference between the rules and ethical standards?
x
What happens if a member contravenes the rules?
- Disciplinary hearing
- Expulsion from RICS
- Told to correct (for example, using the wrong logo)
What were the changes to rules to members and firms in March 2020?
Standards and Regulation Board, new name/replaced Regulatory Board. It was a new change due to the Bye Laws update / change in Feb 2020 and as the S and RB are instrumental in the rules creation and monitoring they need to be correctly stated.
What were the changes to applying for firms in April 2020?
At least 25% of members on the board must be a member of RICS. Previously this was at least 1 member.
What is run off cover?
It is a RICS requirement that firms must have run off cover which will cover firms, members and their clients to ensure they do not suffer from financial detriment. It will cover professional negligence claims for a period of time, normally 6 (min for RICS) or 12 years, however the limitation period is 15 years.
What legislation has an impact on you operating as a chartered surveyor?
- Bribery act,
- Money Laundering,
- Data Protection,
- GDPR.
What is the benefit of PI to sole practitioner?
- They would not have to pay out from their own assets.
What is max level of uninsured excess?
To manage their risk adequately, some firms may wish to hold a higher level of indemnity
Up to 500k or greater indemnity
Can a client claim for negligence if an estimate is wrong?
- Not necessarily, the client would need to prove that the QS said it is an accurate cost.
- If very wrong, the client would need to prove that its because of a lack of skill and care.
What did you contribute in the MMC QA session at RICS headquarters?
I asked a question on the benefits of offsite construction.
When did the bribery act 2010 come into force?
July 2011.
What are 6 principles for dealing with bribery?
- Proportionality
- Top level commitment
- Risk assessment
- Due diligence
- Communication
- Monitoring and review.
How, in your profession can you have a role in bribery?
- Due to the role i play in facilitating deals and awarding contracts
- With the valuation work I carry out, I may be asked to turn a blind eye and provide false certification
- Gifts and hospitality is the biggest area of bribes
What is the benefit of a firm to be part of the RICS?
- Protection
- Security (Complaints handling procedure)
- Commitment to higher standard
- Ethical approach
- Guarantee of professional training and experience
What determines the level of PI premium? (relate to car insurance) This is the amount the firm pays for insurance every month.
- Firms size
- Risk
- Claim’s history
- Number of staff
What are byelaws?
- In the United Kingdom, byelaws are laws of local or limited application made by local councils or other bodies, using powers granted by an Act of Parliament, and so are a form of delegated legislation.
- These are for: members, firms, regulated non-members and any person under article 20 of the charter.
What do you need to be registered as a RICS firm?
- Surveying service provided
- Have at least 25% principals (a senior manager, partner or owner), who are qualified RICS professionals (MRICS, FRICS, AssocRICS).
- Agree to observe and comply with RICS Rules of Conduct for Firms, including working to RICS standards.
- PII insurance
- CHP
- MHP
- Contact officer
- Names and titles of principals
What is the procedure to register a firm to the RICS?
An application to register for regulation by RICS must:
- a) provide information to RICS in such form as prescribed by the Regulatory Board;
- b) agree that RICS may share relevant information about the Firm with government or other regulatory bodies as appropriate; and
- c) agree that if RICS declines to register the Firm RICS may publish its decision.
What services does the RICS provide?
- Research
- BCIS
- Providing guidance notes
- Training
- CPD
- High ethical standards
- Adjudication and arbitration
How is the senior vice president voted in?
Presidential Nominations Committee assists Governing Council in the election of the Senior Vice President by assessing candidates against a fair and transparent process.
What is the RICS international mission?
- To qualify and equip our professionals to the highest level
- To promote and enforce standards
- To lead solutions to the major challenges facing the built environment through professional expertise.
If more than 50% of your presidents are RICS do you need to apply?
Technically no but the benefits would greatly outweigh not being registered.
How much do you pay for annual membership for RICS?
- £150 for student
- £550 for member
What are the benefits of being a fellow?
- How to become a fellow:
- Expert in the field
- Involved for a number of years
- Recognition that person knows greatly.
What is lionheart providing?
- Financial aid to surveyors
- Mental health support
What is the RICS foundation?
- Independent worldwide foundation
- Raised in 2000
- Raised awareness about the build and natural environment
- Supports research and shares results.
What happens if you dont complete your CPD hours?
- Modus magazine - shows people disqualified from RICS
What if a friend asked for advice?
- I dont have my own PI insurance
- I can provide advice, just make it clear that opinions are my own and not my company’s. The advice would be informal.
- I can provide my opinion and refer them to seek more advice.
What are the black and red books?
Guidance notes
- Black is for QS and construction
- Red is for valuing property and are mandatory
What insurances do you need if you start your own firm?
- PII
- Employers liability (costs if an employee claims compensation for illness or injury that they believe has been caused by their work)
- 3rd party liability (purchased by an insured (first-party) from an insurer (second party) for protection against the claims of another (third party).
A junior surveyor working in your team incorrectly over certifies on an interim valuation – what do you do?
The first thing to do is to check the facts and make sure an over certification has actually taken place. Assuming it has, then you need to actually check whether the valuation has been processed of not. If it has not then withdraw it and re-certify. If the valuation has been paid, then you need to remember it is an interim certification and assuming it is not the final certificate then financially matters can be rectified next month. However you will still need to talk to the client, explain the situation, and also ensure that sufficient preventative measures are put in place to stop this happening again in the future. The client may be unhappy, but you must be able to demonstrate that you have recognised the problem and have dealt with it. You will also need to talk to the main contractor to explain the situation so that he understands what the course of action is at the next interim valuation.
The key issue to remember with this subject is read and be familiar with the RICS rules and regulations and codes of conduct
On the theme of Professional Indemnity Insurance, are you familiar with the term limit of liability and where it would be used?
Limit of liability is generally used to cap or place a limit on the level of exposure a business signs up to in a formal contract. For example often in a contract to provide Quantity Surveying services, there is a requirement to provide Professional Indemnity Insurance at a specified level. This level may be £5million. However the wording of the clause is important here. If you are being asked to provide £5million in aggregate, then effectively you are providing £5million PII cover – once this figure is exceeded in terms of claims against a company’s policy then nothing further is paid. However, if you are being asked to provide £5million each and every claim, then effectively you are providing £5million PII cover for each claim made. As you have not idea how many individual claims could be made then there is an argument to say you are providing unlimited PII cover.
As a result of this companies often try to negotiate the inclusion of a limit of liability clause into their contracts. This would effectively limit their exposure to whatever the limit of liability was set at. Clients often don’t like this concept, however it does make business sense to try to limit exposure to something that is reasonable for both parties and manageable by both parties.
Again, the follow up question to this could be how would a net contribution clause affect this?
A net contribution clause can be negotiated either in conjunction with the limit of liability of completely separately.
A net contribution clause seeks to ensure that the consultant’s liability is only for the work he is carrying out and affecting. Thus a net contribution clause means that the consultant will only be held liable for work he has done or influenced, and cannot be held liable for someone else’s mistakes.
What complaints will the RICS investigate?
They will investigate a firm/person if they believe the service they are providing falls short of the standards outlined in the Global Professional Ethical Standards and the Rule of Conduct.
What might the shortfalls be (of the RICS investigating)?
- Failure to complete and comply with CHP
- Failure to disclose a Conflict of Interest
- Misuse of clients money
- Failure to answer correspondence
What is the RICS matrics?
RICS Matrics supports new members entering the profession, as well as working with RICS to shape the future of surveying and grow the size and respect of the profession across industries globally.
How did you act in an ethical way during your case study?
- High standard of service - care and diligence in my work and I was clear that it was only an OCE and where there were exclusions in my estimate.
- Respect -
What are RICS bylaws?
Bylaws are laws made by a corporation or local authority. A list of laws applied internally using powers granted by the Royal Charter (aka the RICS’ constitution)
What is the money laundering max amount in cash?
£8.8k
What is the legislation regarding money laundering?
Money Laundering Regulations 2017
What are the current goals of RICS?
- IPMS
- Increase global coverage in new international markets
- Data protection
- Get more young people into the profession
What is the RICS doing about the coronavirus outbreak?
- Providing free training and CPD
- Research into the effect of Covid
- Forecasts
- Assessments online
- Guidance on different professions to continue work
When should run off cover be more than 6 years?
- Appointments are executed underhand 6 years
- Appointments by deed 12 years.
What is a professional standard you’ve used in real life and at work?
Treat others with respect.
Who do the By laws refer to?
- Members
- Firms
- Anyone under article 20 of the charter.
What are the 2 main sources of contract law?
- Statutory introduction of law. e.g. construction act
- Case law
What are the 3 steps if you do not complete CPD hours?
- First instance is a caution which will remain on your disciplinary record for 10 years.
- Second instance is a further caution and fixed penalty of £150 or local equivalent. These members will also be published on the RICS website.
- 3rd instance is referred to a disciplinary panel which may result in expulsion
Are you allowed to use the RICS logo on your business card?
A firm can use this on their business card, as long as they are regulated and registered.
What is your firms limit on offering hospitality to clients?
Hospitality to clients must be agreed with my business unit director beforehand.
What are black books?
Black books are technical guidance for recommended best practice.
What is the retroactive date regarding PII?
A “Retroactive Date” is the date from which you have held uninterrupted professional indemnity insurance cover (even if you changed insurer during this time) or a date in the past from which your insurer has agreed to cover you. Any claims that arise from events prior to this date is not covered by your insurance.
What is the RICS rules on money handling?
Hold the clients’ money in one or more bank accounts separate from all other monies
Client money should be available on demand
The bank account should be correctly titled to include the name of the firm and the word client to distinguish to the office
Obtained official confirmation from the bank of the client account conditions
They have advised the clients in writing of the bank account details account name details and full address of the bank agree terms for account handling and arrangements for interest and charges.
Obtained written consent from the client whether the account is to hold interest.
What is the role of the RICS?
- . Regulate and promote the profession
- . Maintain the highest educational and professional standards
- . Protect clients and consumers through a strict code of ethics and professional standards
- . Provide impartial advice, analysis and guidance
What are RICS standing orders?
This is the document which sets out how the senior vice president is elected. The presidential nominations committee need to vote in the senior vice.
What is your company’s complaint handling procedure?
- Complaint sets outs appointed person dealing with complaints (complaints handling officer).
- Procedure on how complaint needs to be dealt with
- Timeline on how long to deal with complaint
- How and when to keep client informed
- Gives external redress for ombudsman in case complainant is not happy from internal redress.
When should you let your PI insurer know about a complaint?
- This depends on your PII policy.
- PII policy normally obliged to advise insurer on any situation which may give rise to a claim.
What would you do if a client asked you to reduce fee?
- Contract already been signed.
- Seek legal advice
- If scope changes I will need to make sure scheme is still viable.
Why would somebody get run off cover?
When any professional practice comes to an end, it can be essential that it continues to maintain PI cover for claims which may be made after the practice has ceased to trade.
What does PII cover other than negligence?
Legal costs and expenses in defending the claim, as well as compensation payable to your client to rectify the mistake.
If you are successful in undertaking a project for a client and they send you a case of wine as a thank you, what should you do?
You should clearly state that you would consider whether this could introduce a future conflict of interest. You might also refer to your employer’s gift register or other policies/procedures. The important point is to show that you would not accept a gift that may influence your future judgment.
What is the difference between consent order and regulatory compliance order?
Regulatory compliance orders were introduced in 2019 to impose cautions and reprimands which was previously not available through Consent Orders.
What are recent requirements on firms from the RICS?
- Principle within business that needs to be identified
- 25% of directors need to be members of RICS
- Requirement to have RICS letterhead on logo.
- New structure of the RICS has been produced.
What documents do firms need to submit?
- Client money handling procedure
- Complaints handling procedure
- Details on PII
- Financial information (firms annual return)
- Any data for example BCIS
- Detail on who is the responsible person and contact officer
How many Bye laws and regulations are there?
Ten bye laws.
What do the privy council do?
They grant the royal charter for the monarchy.
What did the recent guidance on the new rules for firms include (effective from April 2020)?
- Regulated firms should review the number of principals within their firm who are RICS-qualified members and should contact RICS if this is less than 25 per cent of the total (12 month transition period).
- At a date to be confirmed by RICS, regulated firms will need to designate an individual within the firm to be the responsible principal. RICS will notify regulated firms in due course when this information needs to be submitted online.
- Before 1 April 2020, firms not regulated by RICS must remove the RICS logo from all branding or must register for regulation with RICS
How do you decide if a member of the firm is a principal?
- The RICS guidance on new rules for firms explains this and looks at:
• the seniority of individuals
• role responsibilities and
• the extent to which their work is supervised.
What is included in a consultancy appointment form, for eg. RICS Standard form of consultancy appointment/?
- Details on PII
- Scope
- Client brief
- Terms and conditions
- Fees
- Client money handling procedure
- Underhand or deed
- Complaint handling procedure
- Details on payment.
- Dispute resolution procedure
Can you speak about a section of the RICS surveying safely?
Visiting premises or sites
- Correct PPE
- Making sure others are aware where I have been
- Procedure for lone working
- Condition of the property
- Site rules and welfare
- Diseases
- Identifying hazards (falls from height, slip and trip, hidden traps and openings, contamination, other people/animals, vermin/birds).
What are the international ethics standards (IES)?
International Ethics Standards establish ten global ethics principles for professionals operating in the natural and built environment sector. These principles ensure professionalism is delivered consistently and transparently throughout the world.
What relevant acts are there in the construction industry?
- Bribery act 2010
- Health and safety at work act 1974
- Money laundering regulations 2017
- Construction act 1996/ 2011
- GDPR
- Data protection act 1998/2018
- Limitation act
- Freedom of information act 2000
- Equality act 2010
What is the difference between act and regulations?
The difference between them is: An Act is legislation passed by the Parliament, whereas the Regulations are Subsidary legislation, and are published in government gazette for becoming legal. Acts set out the broad legal principles whereas the Regulations are set out for the application of the Act.
Can you describe a case law relating to construction?
Donoghue v Stevenson 1932.
Her unnamed friend ordered and paid for a pear and ice cream ginger beer ‘float’ for May.
When the ginger beer was poured into her glass, it was alleged the decomposing remains of a snail dropped out of the darkened, opaque bottle.
May complained of stomach pains, and a doctor diagnosed gastroenteritis and shock. The House of Lords’ groundbreaking judgment introduced the idea that a duty of care extended outside a contract. “It was also the first case that established the notion that law can protect consumers for defective products – and anybody who uses them,”
What are 3 key changes related to regulations?
- Replacement of consent orders with Regulatory Compliance Orders
- Ability of the Head of Regulation to impose a Fixed Penalty or to refer the matter to a Single Member of the Conduct and Appeal Committee rather than referring directly to a Disciplinary Panel (if a Consent Order was not appropriate)
- Introduction of Standard Directions within a new Practice Direction
What is a Royal Charter?
A Royal Charter is an instrument of incorporation, granted by The Queen, which confers independent legal personality on an organisation and defines its objectives, constitution and powers to govern its own affairs. The terms of each Charter are therefore somewhat different, depending on the individual requirements of the type of organisation that is being incorporated.
How can a Chartered body amend its Charter?
Each Charter will normally specify the process the organisation needs to follow internally in order to apply for amendment to its Charter, Bye-Laws or Statutes. Amendments to Charters can be made only with the agreement of The Queen in Council, and amendments to the body’s Bye-laws or Statutes require the approval of the Privy Council (though not normally of Her Majesty). This effectively means a degree of Government regulation of the affairs of the body, and the Privy Council will therefore wish to be satisfied that such regulation accords with public policy, and that there is some public benefit.
In your opinion what are the 3 most important rules for firms?
- Clients money
- Complaints handling
- PII
What are the timescales to deal with complaints?
- 7 days to acknowledge complaint
- Further 21 days to respond to complaint
Who does PII protect primarily?
Protects the client from the negligence, also prevents the professional suffering financial detriment.
What is the case law Hart v Large?
In the recent case of Hart & Hart v Large & others, the High Court awarded significant damages to a couple who had relied, in purchasing a £1.2m property, on a HomeBuyer report produced by a surveyor.
Can you name some RICS approved PI insurers?
Zurich
Aviva
What is a locum?
- A person who steps in the incapacity of someone not fulfilling duties. Typically in the case of sole practitioners.
Name some examples of professional statements
- RICS property measurement 2nd edition
- RICS conflict of interest
- RICS Countering bribery and corruption, money laundering and terrorist financing
What are the 4 different bribery offences under bribery act 2010?
- Offering a bribe (imprisonment + fine)
- Receiving a bribe (imprisonment + fine)
- Bribing a foreign public official (imprisonment + fine)
- Failure of an organisation to prevent bribery (fine)
What adequate procedures must firms have in place to prevent bribery under the bribery act 2010?
There are no set procedures under the act but some key procedures include:
- Risk assessments
- Put in place policies and processes
- Guidelines introduced to help staff
- Train staff
- Ensure compliance at all levels
- Set up a whistle blowing process
What are ethics?
Giving of one’s best to ensure the clients interests are properly cared for, but in doing so making sure the public interest is recognised and respected.
What are the international ethical standards?
- Not mandatory for RICS.
- This is made up of a consortium of institutions around the world which is trying to promote standardised ethical standards.
- Currently 10 ethical standards.
What are the advantages of firms being regulated by RICS?
1) Globally recognised standards
2) Behave ethically and act with integrity
3) Have the required skills and competence
4) Manage conflicts of interests transparently
5) Safeguard the security of clients money
6) Manage finances appropriately
7) Provide adequate and appropriate indemnity for its work
8) Handle complaints and disputes fairly
How do the RICS monitor?
Regulation by:
- Firms annual returns
- Client account visits, e.g. clients money or valuer registration scheme
- CPD
- PII
- CHP
What are the different types of conflicts of interest?
- Party conflict (a situation where a RICS member of firm working for a client, conflicts with their work for another client in relation to the same professional assignment.)
- Own interest conflict (when a member of a firm acting in the interests of a client in a professional assignment conflicts with the interests of the same RICS member/firm.)
- Confidential information (conflict between the duty of a member or firm to provide material information to one client, and the duty of that member to another client to keep that information confidential.)
What are party conflicts?
- Party conflict (a situation where a RICS member of firm working for a client, conflicts with their work for another client in relation to the same professional assignment. It also includes conflicts between duties owed to other parties. For example, a Party Conflict will arise where a duty owed to a client or other party conflicts (or entails significant risk of conflict) with:
(i) the duty owed to a court or tribunal when acting as
an expert witness and
(ii) the duty of impartiality owed in acting in a situation
requiring impartiality, such as an appointment as
an adjudicator, arbitrator, mediator or independent
expert, or where a statutory decision-making
appointment or any other similar appointment is
accepted.
What is informed consent?
Consent given willingly by a party who may be affected by a Conflict of Interest, that party having demonstrated to the RICS member working independently or within a non-regulated firm or regulated firm concerned that the party understands the conflict of interest.
What type of conflict of interest would a multi-disciplinary firm be?
Own interests conflict.
Name an example of a conflict of interest.
A project at my work where there were multi-disciplines at the same firm working on the same project, they set up an information barrier and split fees, and also got informed consent from the client.
What is indemnity?
Security or protection against a loss or other financial burden.
When were the rules for conduct last updated?
The rules were last updated in March 2020. The main difference is the change to the governing council.
Why is the RICS self regulated?
This is allowed because of the royal charter.
