Conduct, Rules, Ethics & Professional Practice Flashcards
What’s the difference between business ethics and professional ethics?
Business - moral principles and decisions (influenced by local customs and practice)
Professional - personal best to Client
What are the minimum levels of PII based on?
Firm’s turnover in previous year
or estimated for a new firm
Explain the PII term ‘each and every claim’ basis?
for each and every individual claim
Note:
- indemnity cover limit for each claim
- also known as (any one claim)
- aggregate is the cumulative indemnity cover limit for the year
What is the new 2018 comp Diversity and Inclusivity?
Challenging bias.
Making the profession more inclusive to ethnic, gender
Professional statement – Client money handling 2019? What does it provide info on?
Handling Client money (not PReservation)
- Client bank account must contain word ‘Client’.
- Interest paid to Client. Charges to firm.
- 3-year period before unidentified funds donated to registered charity
Guidance notes are recommendations rather than mandatory rules. Can you name a few?
Complaints handling 2016.
Technical guidance for accepted good practice, such as (NRM 2012; the Black Book; Surveying Safely 2018; Tendering Strategies 2014)
Notes:
- Complaints handling 2016. details two-stage process that must contain an approved ADR redress mechanism. Like Omn CHP
Can an honorary member “HonRICS” use the professional title designation “Chartered Surveyor”?
No, only MRICS and FRICS
Example of acting with integrity in my private life?
Calculating the change for local shop deliver man. Accurate and explain the maths
What’s the RICS futures initiative
It looks at the future,
regarding tech advances and urbanisation
Name of RICS journal?
Modus
Note:
Now online
Definition of integrity?
Code of conduct for doing the right thing professionally
Doing the right thing whilst nobody else is aware of your actions
Are international collaborative standards mandatory for RICS members/firms?
Yes
Note:
- International Ethics Standards
- IPMS, ICMS, IVS
Professional statements –
Rules of conduct for members 2020 (9x)
Rules of conduct for firms 2020 (15x)
Example of some of the rules common to both?*
Rule 2 Communication - keep RICS up to date with contact details.
Rule 5 Service – professional and timely.
Rule 6 CPD provided/ undertake 20hrs.
Notes:
- Rule 1 Interpretation (MRICS, AssocRICS)
- Rule 3 Prof/ ethical behaviours
- Rule 4 Competence
- Rule 7+11 Solvency
- Rule 9+15 Cooperation
Client says lower the fee to match competitor, what to do?
Run through proposal with Client to show its fair value.
Discuss reducing the scope of services.
If not, then Politely decline the work
Explain the PII term ‘claims made’ basis?
CLAIM MADE on current policy in place (at the time claim is made)
Notes:
- Not the policy in place at the time of the negligence
- In contrast public liability insurance typically operates on an occurrence basis, where it is the policy in place at the time the event or occurrence takes place that responds irrespective of when the actual claim is made.
What could be deemed as an expulsion offence under the RICS disciplinary procedures?
Non-compliance with rules for members
Notes:
Failure to..
- pay membership fees
- renew Professional indemnity insurance
- undertake CPD,
- misconduct e.g. fraud, dishonesty, deliberate discrimination, and misappropriation of client money
The RICS Constitution 2010 consists of?
The Royal Charter 1881 and Supplemental Charter updated Feb 2020.
10 Byelaws (ratified by the Privy Council)
10 regulations (approved by RICS Governing Council)
Note:
The Bye laws and Regulations include a vetting process and conduct
Professional statement – conflicts of interest 2017.
What are the three types of conflict defined in the document?
Party
Own interest
Confidential info
Notes:
- Party conflict - duties owed to two Clients e.g. working for landlord and tenant
- Own interest conflict - duty to Client that say e.g. effects your Employer
- Confidential info conflict - handling commercial info and serving a competitor
What is the Privy Council?
“Grants and awards the Royal Charter”
Mechanism of agreeing terms with Gov
Notes:
- Privy Council - a body set up in the early days of the monarchy to advise the king/queen on matters of state and not put before parliament
- Any changes to the bye-laws have to be approved by the UK Government, through the Privy Council, even if the changes have already been approved by a majority vote of RICS members
What are the 5 Global and Ethical standards?*
SOE
STIRR
Service - always provide a high standard of.
Trust - act in a way that promotes trust in the profession.
Integrity - act with.
Respect - treat others with.
Responsibility - take responsibility
What procedures should a RICS regulated firm have in place to prevent bribery?
a written policy - covering anti bribery and corruption
have systems in place (governance)
- gift register
- staff guidance/rules
- ethics champion
Note:
refer to Countering bribery and corruption, money laundering and terrorist financing 2019
Professional indemnity insurance – What’s Run-off cover?*
Insurance for when a business, or individual stops operating
Provides continuing indemnity to cover costs that are associated with retroactive claim
Note:
Retroactive = paid on current run-off policy (rather than the expired policy from the date when advice was given)
When are the RICS elections held?
Every year
What is client’s money and how can a firm PReserve the security of this?
Refer to Client money PRotection - Money clearly linked to Client, in event of:
- insolvency
- death of sole practitioner (locum),
- misappropriation (fraud)
How many professionals Groups are there (e.g. pathways)?
17 including BS, PM, QS, FM, Valuation
What does the APC acronym stand for?
Assessment of Professional Competence
PI - You set up own business.
A client at your old practice is suing your old firm for negligence on a piece of work that you completed.
The client decides to sue you as well.
Can he do this and what are the implications for your new practice’s PII?
No, it would be on my old firms PI insurance
What does having the PII policy written on a full civil liability basis mean?
If a claim isn’t specifically excluded, it’s included
Note:
- as opposed to a ‘negligence only’ policy, where if a claim is not specifically included, it’s excluded
Professional statement – Rules for the use of the RICS logo and designation 2018? Who are the rules for?
Members - e.g. MRICS.
Regulated firms e.g.
- must display ‘Regulated by RICS’ logo
- Rules on where to use, positioning on letter heads
What’s the RICS Business Plan?
strategy for next three years 2018-2021, providing direction on our vision
Definition of ethics?
Moral conduct
based on ideas of right and wrong
PII - What happens to when you retire as a professional?
Run-off cover ensures firms, members and clients are not exposed to financial detriment..
Notes:
Following a firm ceasing to trade or a member’s retirement
RICS requires firms to have fully retroactive run-off cover
What is the money laundering max amount in cash?
In Europe
€10,000
per transaction or series of transactions
What are the stages for not complying with CPD requirements?
1st breach - receive a Fixed penalty caution (remains of record for 10yrs)
2nd breach - £150 fine
3rd breach - refer to disciplinary panel, possible expulsion
Note:
- Fixed penalty caution - Rule 4(c) of the Disciplinary, Registration and Appeal Panel Rules 2009
Professional statement – Rules of conduct for member and firms 2020. What’s is the 2020 update for?
The Standards and Regulation Board is the new name for the Regulatory Board. This was changed due to Bye Laws update in Feb 2020.
Does your firm have PI cover?
Yes, mandatory for RICS Regulated Firms - for negligent advice re..
Note:
- Advice - against poor contractual advice e.g. no PI for spiral staircase
- Bills - our firm don’t do MC Bills as risky if miss items
- Abortive soft costs - e.g. if cost plan under priced, Client would of stopped design earlier than proceed
What’s the RICS mission statement/ objective?
“to maintain and promote the usefulness of the profession for public advantage in UK” & worldwide
Professional indemnity insurance – What’s a net contributions clause?
Limitation of Liability - covers you for your part of the works on the project.
For example, the structural engineer will not be held liable for the Architects design, should the architect practice dissolve and the client pursues the architectural design
Notes:
- Under common law all parties can be jointly and severally liable for the loss or damage that flows from the breach.
What charitable works are RICS involved in?
Lionheart – supports surveyors in times of hardship
Chartered Surveyor Training Trust - apprenticeships
Professional statement – Client Money Protection 2019? What does this provide info on?
Client money PReservation (not handling)
Money clearly linked to Client, in event of:
- insolvency
- death of sole practitioner (locum),
- misappropriation (fraud)
Note:
- Regulation relation to Rule 8 for firms - Client money
What’s the International Ethics Standards?
10 ethical standards - similar to the RICS global professional standards.
RICS are party to a global coalition.
What’s the RICS HQ address?
RICS HQ, Parliament Sq, London
What are professional statements?
Mandatory rules for member and regulated firms
What insurance must be maintained by chartered QS, and how long to maintain for?
PII
for min of 6yrs (RICS requirement)
You have considered the proportionality, timing and reciprocation of a gift and are in receipt of a gift for a job well done, what should you do next and consider?
Log this gift on the Employer gift register
make all parties aware of this gift
Consider any potential future conflict of interest
Notes:
Refer RICS Countering Bribery professional statement
The Contractor wants to buy you a drink a drink? What would you consider?
Generally decline most events as may look bad
However, be considerate of:
- timing, proportionality and reciprocation
- Have I been singled out, or are both companies attending
- Pay for my own drinks
Professional statement – conflicts of interest 2017. What does it provide info on?
maintaining client CONFidentiality
Obtaining informed consent
Company procedures in place (systems to mange and control)
PII - What is the assigned risks pool (ARP)?
Firms unable to obtain run-off cover in open market are able to apply for cover in the run-off pool
for max 3 years (including auditing and guided on how to obtain)
At a Saturday event a friend asks for commercial advice, should I provide?
No.
- I am liable for advice even though informal, and not being paid
- Need terms of engagement in place
- The friend may misinterpret my advice
Notes:
- Seek advice through my company or another
PII Run-off cover - how long are you required to have run-off cover in place for in the UK and the UAE?*
(interview)
UK minimum of 6 years
UAE minimum of 10 years (as that’s the liability period)
What is RICS Matrics?
Supporting, networking and developing young professionals
Note:
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
Name some RICS ‘information only’ documents?
RICS economic or market reports
RICS consumer guides
RICS research
What are bye-laws?
internally applied Laws (power granted by Royal Charter)
Note:
- ratified by UK Gov, through Privy council
- 10x bye-laws
Under the UAE Civil Code, is there an obligation on the designer to take out and maintain an insurance cover?
No
Note:
- Although in Abu Dhabi you need to obtain ‘classification’. One of the prerequisites is insurance.
- https://www.tamimi.com/law-update-articles/designing-with-confidence-in-the-uae-do-you-have-the-right-insurance/
When should you inform the RICS of a complaint?
When internal redress has not worked (stage 1)
Note:
PI insurer should be notified when complaint is received or PI insurance could be invalid.
What insurances would you need to have if you had your own office/premise?
Employers Liability Insurance
Public Liability Insurance (Third-party)
The Client offers to pay your firm for 6 months work upfront in cash?
Request electronic bank methods
Segregate money in ‘Client’ named account
Agree drawdown e.g. monthly, milestone
Note:
- We are cashless firm (re money laundering regs)
- Refer to Client Money Handling 2019.
- provide periodic account statements
What is generally excluded from PII cover?
Non-design and workmanship exclusions such as:
- Material damage and theft
- Personal injury
- Damage to third party property
- Insolvency
Would you sign an NDA?
My Employer signs, rather than me as a person
Notes:
NDA =
- confidentiality agreement or a secrecy agreement
- Legal contract between at least two parties
What is the structure of RICS?*
1 Privy council (grants and award Royal Chtr)
2 Governing council (set direction. Manage obligations of Royal Chtr)
3 Regulatory tribunal
Boards + Committees
4 Boards - S+RB, Management
4 Committees - Audit, Nominations, Presidential
(under 4 Management Board)
5 World regional board
5 Committees - finance, remuneration
If offered a gift, what should I consider?
Generally decline, however I would consider
- the proportionality,
- timing,
- reciprocation
Notes:
Refer RICS Countering Bribery professional statement
To start my own private practice, what do I need to consider and do?*
Refer to the Rules for the Registration of Firms 2020
Advise RICS that I am starting my own firm - biz name, etc
Understand insurances (employers liability, public liability, PI)
Policies in place - CHP, H+S, equal opportunities, training
Notes:
- inform of business name, nature, whether holding client money, CHP, point of contact, location, services offered
- refer professional statements such as;
- rules of registration for firms
- rules for use of RICS logo and designation
What’s limit of liability?
Financial cap/ exposure for insurer (the max pay out on a claim)
What is the RICS Annual Return?
This Seeks info on
- compliance with Rules for Firms (PII + CHP)
- key Directors
- whether a firm is Holding Client money
The 5 Principles of Better Regulation are?*
PACTT Proportionality Accountability Consistency Targeting Transparency
Notes:
- Proportionality - Regulations to suit size/ risk footprint. Taking on Clients money
- Accountability - Regulators decisions subject to public scrutiny
- Consistency - Regulations across the disciplines
- Targeting - Monitoring e.g. samples for not doing CPD. Using resource to target high profile issues
- Transparency - e.g. CPD can be fined, even expelled
- Classified as ‘Gold Standard’
- Relates to the regulator, not how we as members or firms should conduct ourselves
Provide a definition of professional negligence?
Making an error in judgment on a Client deliverable (piece of work for the Client)
Note:
e.g. if an engineer designed a heating system for a large hall or reception without considering its size properly, and if the installed radiators did not heat the area sufficiently and the system had to be removed and/or redesigned, your client can claim under professional negligence.
How can negligence claims be avoided?
Best practice;
- Follow RICS guidance
- Keep records
- Advise within agreed scope of service/ competence
PII - What are the minimum limits of indemnity coverage required?*
> £100,000 turnover = min. £250,000 indemnity
£100,001 to £200,000 = min. £500,000
£200,001+ = min. £1,000,000 indemnity
Note:
For new firms its an estimate
Professional statement – Rules of conduct for members 2020. Example of some of the 9 rules?*
SOE
Rule 2 Communication - keep RICS up to date with contact details.
Rule 5 Service – professional and timely.
Rule 6 CPD hours requirement.
Rule 7 Solvency – bankruptcy will lose membership
Rule 9 Cooperation with RICS
Can you advise when you undertake your responsibilities with due skill and diligence?
SOE
Extremely thorough with tender adjudication.
adjustments are fair and reasonable, not penalties for exclusions
Looking for potential scope gaps (to retain budget if required)
PII - If an estimate is incorrect can the Client claim damages?
Depends of severity and scale of incorrectness
PII can indemnify against errors and omissions (if majorly wrong)
Note:
- Client must demonstrate it was wrong through reasonable skill and care
- If estimate is far away from budget, then there will be abortive design costs that could have been avoided if designed earlier
- Not necessarily a right to redress
What is meant by the PII term, ‘uninsured excess’?
The part of each claim the firm must pay itself
Notes:
Like car insurance excess - e.g. you pay first £500
Who is the current president of the RICS?
Timothy Neal FRICS
Professional statement – rules of registration for firms 2020. What it is about?
- Firms required to register for RICS regulation
- 25% of principles must be AssocRICS and above.
- Info to tell RICS - business name, nature, whether holding monies, CHP, Contact Officer, PI, location, services offered
Notes/ additional:
- new Responsible Principle role - ensures principles, technical and ethics standards are upheld
How do RICS monitor Regulated firms?
SOE “Omn are RICS regulated firm”
Annual Returns submitted by firms
Client account visits
in correspondence re CPD, PII, CHP
Example of when I have demonstrated one of the 5 Global and Ethical Standards?*
SOE
Respect - all individuals on the project team
Responsibility and integrity - being consistent and fair with tenderers, not disclosing bid amounts
Notes:
Service - know comp boundaries and stick to scope
Bribery Act 2010. does it apply in UAE?
Yes if the company is from UK
Professional statement – Countering bribery and corruption, money laundering and terrorist financing 2019 - what does this provide info on?
Mandatory rules e.g.
- firms - not accepting a bribe,
- members - reporting suspicious activity.
Guidance on
- ethics champion
- and whistleblowing
What is PII and what is its purpose?
Indemnify firm and client
For defending and paying out claims
against losses resulting from professional negligence, errors and/or omissions (which cause financial loss to a third party)
RICS tool for managing/ making strategic decisions?*
SOE
RICS ethics decision tree
What’s the Ethics Decision Tree? What are some of the considerations?*
SOE
Flow chart with considerations such as:
- Have you discussed with your boss?
- Is it legal?
- Would you be happy if your actions were made public?
Notes:
For making strategic decision making
What’s the role of the Governing council?
set direction and global strategy
“Management of Royal Charter obligations” [granted by the privy council.]
Notes: Members include - the RICS Chair Chris Brooke. - The RICS President Tim Neal. - The RICS CEO Sean Tompkins. - And the first president was John Clutton
What is ISO 37001?
Anti-bribery management systems (2016)
Note:
How would you determine what is the required cover period for PII runoff cover?
RICS is 6 years minimum
UAE is 10 years minimum liability period
Note:
In UK, to match how contract was executed
- 6 years underhand,
- 12 years as a deed
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
Difference between a gift and a bribe?
Consider timing, proportionality and reciprocation
Would your tender report recommend the Client preferred Tenderer, rather than best technical and commercial?
No. My report based on tech and commercial. Not influenced by Client or others
What actions should you take if there is a potential claim on your PII?
Notify PI insurer of:
- Actual claim
- Pending claim (or written or verbal threat)
- CHP complaint (on your CHP)
What’s the RICS slogan/ motto?
“Est modus in rebus”
there is proper measure in all things
What is the RICS?
Royal Institution of Chartered Surveyor
Professional body of construction and real estate professionals
For a company’s PII policy to comply with RICS PI Insurance May 2020 (v7) professional statement,
What standards must it meet/ what it provides info on?*
Cover meets Standards + Regulatory Board standard
Retroactive run-off cover for min 6 years
min level of indemnity cover £250k, £500k, £1m (based on firm’s previous year turnover)
Policy wording is written on a full civil liability basis
Any one claim or aggregate plus unlimited round the clock reinstatement basis.
Note:
- Be fully retroactive ‘claims made’ basis, ensuring all former work is covered on new policy
- Underwritten by a listed insurer
- Cover past and present employees
Royal Charter 1881 (and Supplemental Charter updated Feb 2020)
What does it provide info on?
Info on:
- powers
- obligations of Royal Charter
- member classifications (F+MRICS), non-member (trainee, honorary).
Note:
- powers (e.g. self-regulation)
- obligations (e.g. advance knowledge, appoint a Gov Council)
- Requires RICS to promote usefulness of profession for public advantage in UK and world
How often is Ethics CPD required?
Every three years as a minimum
If mistake in cost plan, what action would your insurer expect you take?
Notify them and comply with policy procedures
Bribery Act 2010 – what are some of the 6 organisation principles?
Top-level commitment
Communication (including training)
Monitoring and review
Additional 3:
- Proportionate procedures
- Risk assessment
- Due diligence
What can a conflict of interest generally be defined as?
don’t give a theoretical example
Anything that impedes or is perceived to impede an individual or firm’s impartiality and in the best interests for client
Note: COI 2017 conflict definitions - party - own interest - confidential info
What are the requirements for professional development?
CPD - 10 hrs informal, 10hrs formal, minimum per year
How old is RICS, and how many members are there?
Its 152 years old. Established in 1868.
Over 134,000 members
PII - What are the maximum value levels of uninsured excess?
2.5% of the sum insured, or £10k min
Note:
Under £500k indemnity
= 2.5% of the sum insured, or £10k min
Over £500,000 indemnity
= 2.5% of the sum insured
What’s the role of the management board under the Governing council?
Day-to-day performance and delivery of the business plan
Oversees the RICS financial committees and RICS world regional boards
Client benefit of using RICS Regulated Firm?
SOE “Omn are RICS regulated firm”
rules of registration for firms 2020
- 25% of principles AssocRICS and above.
- CHP in place
- PII in place
Best practice service - using latest professional standards and guidance notes
Notes:
- accountable to RICS
- Standardisation - use of NRM rather than SMM6
What were the implications of the Merrett v Babb 2001 case?
Individuals and firms must ensure run-off cover is in place - to indemnify after cease of trading
Notes:
- As company employee, Babb valued a house purchased for Merrett
- Valuation later found to be negligent, company no longer existed
- Court ruled Merrett could pursue the individual for the loss (found to be personally liable for advice he gave)
If I identified a that I was potentially involved in a conflict of interest on tender process, what would I do?
Inform my Employer, the Client, the tenderers firm, and any stakeholders.
If no objection, then a document should be signed to state that I can proceed with my role
Note:
E.g. if a tenderer was on the list and I personally knew their staff,
Why I want to join RICS?
- Benefit my Client and firm
- Large professional body
- Open doors in my career
- Prove I am professionally and technically competent to the highest level
When was the last time you visited the RICS website?
This month when researching all comps
Can you advise when you have come across a conflict of interest?
SOE “I act in a way which promotes trust in the profession”
In tender process where subsidiary of MC was tendering
I maintained commercial confidentiality
Note:
- I did full commercial
- MC did only technical
What laws and regulations govern the RICS?
Royal Charter 1881 (and Supplemental Charter updated Feb 2020)
Professional statement – Professional indemnity insurance version 7, May 2020. Updates from version 6, March 2020 are?
Policy was on an ‘each and every’ claim basis..
now on Any one claim or aggregate plus unlimited round the clock reinstatement basis;
Need to check with insurers for fire safety exclusion within policy
Notes:
- each and every = each individual claim
- in aggregate = cumulatively for year
- round the clock reinstatement mean = the primary layer of insurance will pay up to its limit and then Reinstate the full limit of indemnity
If you suspect money laundering, what steps should I take?
Confirm the Clients identity,
keep records
and seek legal advice
Notes:
Refer to Countering bribery and corruption, money laundering and terrorist financing 2019
What is the Role of RICS?
R M P P
- regulate - and promote profession;
- maintain - highest educational and professional standards;
- protect - clients and consumers via a strict code of ethics; and
- provide - impartial advice and guidance.
Note:
not sure this is still relevant
Professional statement – Rules of conduct for firms 2020. Example of some of the 15 rules?*
SOE
Rule 2 Communication - keep RICS up to date with contact details.
Rule 5 Service - Professional and timely
Rule 7 Complaints handling procedure in place.
Rule 8 Handling Clients money.
Rule 9 PII
Rule 11 Solvency – bankruptcy not permitted.
Rule 12 Locum agreements.
Rule 15 Cooperation with RICS
Who is the RICS president Elect?
Kath Fontana FRICS
