Conduct, Rules, Ethics & Professional Practice (Level 3) Flashcards
Can you explain the general overview of the New Rules of Conduct (February 2022)
- The new rules of conduct replace the previous version which as been in place since 2007.
- Simpler structure with clear examples of each rule.
- Focus on respect, diversity and inclusion.
- Understanding evolving technology and its benefits/ risks.
- Supporting sustainability
There are 5 New Rules of Conduct, can you pick one and explain what it is
Rule 1 – Must be honest, act with integrity and comply with professional obligations.
The rule sets out 12 example behaviour points on how members and firms are to act. For example:
* Do no mislead others.
* Do not allow themselves to be influenced by others.
* Identify conflicts of interest.
* Provide honest advice which is evidence based.
Name the 5 rules of conduct
- Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS
- Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
- Members and firms must provide good-quality and diligent service.
- Members and firms must treat others with respect and encourage diversity and inclusion.
- 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
Give an example of one Rule that you comply with every day?
Rule 4 – Must treat others with respect and encourage diversity and inclusion.
I respect the rights of others with courtesy and do not discriminate against anyone on any improper grounds.
What is included in Appendix A (Professional Obligations) in the New Rules of Conduct
Appendix A sets out the professional obligations for members and firms:
Members (3 obligations)
- Comply with CPD
- Cooperate with RICS
- Provide information when requested by Standards and Regulations Board
Firms (7 obligations)
- Publish CHP which includes ADR
- Current and previous work covered by PI insurance
- Arrange for their work to continue if they are unable to
- Cooperate with RICS
- Provide information when requested by Standards and Regulations Board
- Display they are regulated by RICS on business literature
- Must report to RICS any matter required to report under RICS Rules of Registration of Firms
What do you need to do if you set up in practice?
Legal:
* Register the business with Companies house and/ or HMRC
* Obtain PI insurance
* Employers liability insurance
* Comply with H&S regulations
* Adhere to GDPR and the Data Protection Act 2018
RICS:
* Abide by the RICS Rules of Conduct
* Correct level of PI cover
* Register the practice with RICS
* Commitment to ongoing CPD
* Complaints handling procedure
When would you arrange PII run off cover and why and how long is it held for?
To ensure that firms, members and their clients are not exposed to financial detriment in the period following a firm ceasing to trade.
Period of six years from the expiry date of the policy in force at the time of cessation.
What are the CPD requirements for a chartered surveyor? What about ethics?
20 hours CPD each calendar year (10 hours formal).
All members must maintain a relevant understanding of the professional and ethical standards during a rolling three year period.
How would you assess the level of PII you would need when setting up in private practice?
A firms turn over in the preceding year:
* £100,000 or less = £250k minimum limit of indemnity
* £100,0001 to £200,000 = £500k minimum limit of indemnity
* £200,001 and above = £1,000,000 minimum limit of indemnity
What would be your approach if the client wished to pay you in advance for your services?
- Establish a clear agreement outlining T&C’s and timescales.
- Scope of work agreement.
- Formal invoice.
- Designated account for clients’ funds.
- Agreed refund policy.
Why would you require Professional Indemnity Insurance (PII) if you were to set up in private practice?
- Legal requirement when providing professional services.
- Risk management against claims for errors, omissions or negligence.
- Protection of assets and reputation in the event of a claim.
With regards to client’s money, how should you name the bank account you are required to set up for this purpose?
- Include the word ‘client’.
- Name of the firm in the in the title of the account.
- Discrete client money accounts include an identifier (e.g. the client or property name.)
If a conflict of interest arose within your business, what advice would you give to colleagues or clients on how to deal with it?
- Acknowledge and discuss the conflict of interest without delay.
- Evaluate the impact.
- Seek guidance and advice from professional colleague on what measures are to be taken.
How would you protect your client’s interests if you decided to give up practice?
- Inform the client.
- Deal with client money outstanding in your client account.
- Notify PII and arrange run off cover.
- Protect confidential information.
- Inform RICS to deregister your firm.
If you carried out work for a client and he decided to pay you in cash, what advice would you give to them and would you readily accept it?
- Advise them on the legal and regulatory requirements related to financial transactions.
- Encourage transparency and accountability.
- Highlight risks and concerns such as loss, theft of difficulty tracking.
If the client insists, then I would accept. I would ensure that they are banked promptly and they are given a pre-numbered duplicate receipt. I would account for it in a cash book.
How would you advise your client to give assurance as to how you were going to hold their money, so that it would be securely kept and accounted for?
- ensure compliance with all anti-money laundering legislation, rules and regulations for all receipts of client money.
- Separate account titled in accordance with RICS requirements.
- Ring fenced.
What would happen if your employer’s rules conflicted with the RICS rules? Which takes precedence?
RICS would take precedence, members are bound by the RICS Code of Conduct and are expected to adhere to its principles and guidelines.
It may be appropriate to raise any concerns or conflicts with the employers’ rules with relevant stakeholders.
Why do we ring-fence Clients’ Money placed in our trust?
Separate assets or entities to shield them from risks that they may otherwise be exposed to.
Examples include market volatility, taxation, creditors, and bankruptcy.
Ensure that you are familiar with the UK Bribery Act 2010?
Act covers criminal law relating to bribery, four main offences are:
- Bribing another person
- Being bribed
- Bribing a foreign public official
- Failure by a commercial organisation to prevent bribery
.
Can you explain the process for safeguarding clients’ interests in the event of death or prolonged illness of a sole trader Chartered Surveyor?
- Notify the client, explaining the situation and introducing the deputy.
- Inform PI insurance and the RICS.
- Ensure the client is satisfied with the deputy.
- If yes, they take over ongoing projects and continue to work.
- If no, deal with handling clients money and keep information confidential
When does a firm have to register with the RICS?
When you are a firm that offers surveying services to public and where 50% or more of the principals are RICS members.
What is a Locum employed for?
A locum is effectively another professional who is appointed to ‘stand in’ for the surveyor if they are unable to work, e.g. in the event of an accident/illness, unforeseen circumstances, prolonged absence (e.g. holiday or a sabbatical) or death.
Who can take on the role of a Locum?
Typically, a locum will be another Chartered Surveyor, although they could also be a solicitor or accountant by trade, i.e. a trusted professional.
How would you describe ‘conduct befitting’ a Chartered Surveyor?
Commitment to ethical behaviour, professionalism, competence, integrity, and accountability.
Reflecting the core values and responsibilities of the surveying profession.
If you received a complaint about the service you had provided, how would you deal with it and what are the timescales for responding?
- Ensure the complaint is recorded at the earliest opportunity.
- Notify PII and insurer and solicitor.
- Establish a review process to ensure effective management to resolution.
- Acknowledge in writing within 28 days.
Discuss a relevant third-party redress mechanism and their role?
ADR (Alternative dispute resolution) – mediation, adjudication and negotiation (disputes outside of court).
Its role is to facilitate constructive dialogue and negotiation between parties in dispute, with the aim of reaching a mutually acceptable resolution.
If a friend asked you for an opinion on a project they were considering carrying out, what advice would you give them?
You are to treat them like any other client.
You require contractual terms in place to provide services with reasonable skill and care.
Once you give advice, you create a legal working relationship and potential liability for that advice.
It is likely that a liability could still arise if your friend has acted in reliance on your advice and suffers a financial loss as a result.
What would you advise if a client approached you and asked if you would work for them directly instead of your employer to reduce their cost?
- It may breach my contractual obligations and ethical standards.
- It could create a conflict of interest and confidentiality breach.
- Explore alternative compromises that could address the clients concerns.
If you and a colleague were invited to a consultants Christmas Party, what advice would you give to your colleague, what are the guidelines for dealing with an offer or a gift or hospitality and when may acceptance be appropriate?
I would not accept gifts, hospitality or services which may suggest an improper obligation.
They can be accepted, however by consulting with the ethics decision tree first.
I’d consider the value, timing and proportionality of the gift prior to accepting.
Ensure that you are familiar with the Money Laundering Regulations 2017?
The Money Laundering Regulations 2017 require businesses to
- implement measures to detect and prevent money laundering,
- conducting customer due diligence,
- reporting suspicious activities,
- keeping records,
- and training employees on anti-money laundering practices.
Do you have any personal involvement with matrics or LionHeart?
No, I am aware that:
- Matrics is a network designed for young surveyors early in their career designed for networking and professional development.
- Lionheart is a charitable organisation to provide financial, practical and emotional support to RICS members and their families.
I always advise younger QS’ to enrol a RICS student membership which will automatically enrol them as a member of RICS Matrics.
How does ethics and conduct affect the environment we live and work in?
- Builds trust and reputation.
- Positive organisational culture.
- Legal compliance.
- Conflict resolution.
What Laws and regulations govern the formation and workings of RICS?
- RICS Byelaws.
- RICS Governing Council.
- Standards and Regulations Board.
What is a Money Laundering Red flag? Example?
Unusual transaction patterns:
* Large or frequent cash deposits.
* Round dollar amounts.
* Structured transactions to avoid thresholds.
Have you checked the terms of an appointment document for compliance with RICS rules?
- Consultant obligations
- H&S requirements
- Payment requirements
- Insurance
- Dispute resolution
Can you provide an example of where you have identified a conflict of interest?
A subcontractor who I had worked closely with on various projects questioned the details of the tender comparison for a new package of work. I could not advise them of the details they were after as this would put me in a conflict of interest. I denied the request, however, gave them feedback on their submission for areas which could improve.
Can you provide an example when you have treated others with respect and/or encouraged diversity and inclusion?
Start of a new project meeting new team members treating them with courtesy and working collaboratively
Can you give an example when it would be appropriate to accept gifts or hospitality?
- Reasonable value in line with common business practices.
- Inform their employer and obtain approve.
- Avoids conflicts of interest.
- Tracked on the gift register.
How do you know that your company’s policy on gifts and hospitality is compliant with the RICS rules?
We have undergone mandatory training surrounding bribery and corruption which mentions the same requirements that of the RICS.
By protecting confidential information, which of the Rules of Conduct are you complying with?
Rule 1 – point 1.9:
Members and firms protect confidential information and only use or disclose it for the purposes for which it was provided, where they have the necessary consent to do so or where required or permitted by law.
What are the maximum levels of uninsured excess
What are the RICS bye laws and give an example of a rule.
**Governing rules and regulations **that outline the structure, functions, and operations of the Royal Institution of Chartered Surveyors, ensuring members uphold professional standards and ethical practices.
Conduct (Bye-law 5)
What is the role of the standards and regulations board?
Exercise RICS regulatory functions including strategy, governance, structure and policy.
Oversees RICS professional standards and entry/ admission into the profession.
