Ethics Flashcards
When was the Surveyors Club formed?
1792
Who founded the Institution of Chartered Surveyors and in what year?
John Clutton was the 1st President and it was founded in 1868
When did the institution receive Royal Charter status?
Royal Charter status was received in 1881 by Queen Victoria
What is the role of the RICS?
R M P P
1) Regulate and promote the profession
2) Maintain educational and professional standards
3) Protect clients and customers through strict codes and professional standards
4) Provide impartial advice, analysis and guidance
What is the RICS motto?
Est Modus in Rebus - There is measure in all things
Where is the RICS headquarters?
12 Great George Street, Parliament Square, London
What is the structure of the RICS?
Strategic direction set out by our Governing Council
1) Governing Council - 55 currently on council - Set the strategies and policies and chaired by the president
2) Regulatory Board - decide regulatory policy and oversee implementation
3) Management Board - Implement strategy set out by governing council
4) Audit Committee - matters relating to audit arrangements and internal control - reports to GC
5) Financial Committee
Self Regulated through 5 Principles of Better Regulation
Who is the current RICS president?
Clement Lau - September 2021
Ann Gray next president
Who is the RICS President Elect?
Ann Gray
Tina Paillet Next VP
What are the Obligations for RICS Firms under the new Rules of Conduct Feb 2022 update?
Firms must.
C I D C I D R
1) Have a Complaint Handling Procedure in place
2) Have PII
3) Arrangements to cover death of insolvency
4) Cooperate with RICS
5) Provide Information to RICS
6) Display RICS Designations
7) Report to RICS
What are the 5 principles of better regulation?
P A C T T
1) Proportionality
2) Accountability
3) Consistency
4) Transparency
5) Targeting
What are the Obligations for RICS members under the new Rules of Conduct Feb 2022 update?
RICS member obligations
C I C
Comply with CPD requirements
Provide Information to RICS when requested
Cooperate with RICS
What are the rules of conduct for firms and members as updated in February 2022?
Members and Firms must
Rule 1 - be honest, act with integrity and comply with their professional obligations, including obligations to the RICS.
Rule 2 - maintain their professional competence and ensure that services are provided by competent individuals who have necessary expertise.
Rule 3 - provide good quality and diligent service
Rule 4 - treat others with respect and encourage diversity and inclusion
Rule 5 - Act in the public interest, take responsibility for their actions
What is a breach of conduct?
Either;
1) Bringing profession into disrepute
2) Breaking a law / agreement / code of conduct
What does a breach of conduct trigger?
A complaint to the RICS by a 3rd party or client
Who enforces a breach of conduct?
The RICS Charter and Byelaws allow the Regulatory board to make Disciplinary, Registration and Appeal Panel Rules
What is the Regulatory Board?
1) Its a board which sits under the RICS Governing Council.
2) They administer regulatory matters on policies.
3) It is chaired by a non-member to demonstrate regulation is independent from members interests.
What is the RICS Disciplinary Procedure for a breach of conduct?
1) Regulatory board reviews the case
2) fixed penalty may be issued OR may be informed they are liable for disciplinary proceedings
Fixed Penalty
APPLIES TO - minor breaches - e.g. failure to pay RICS Fee
DISCIPLINE - restrain member from taking certain actions ORFine
Disciplinary Proceedings
1) Consent Order
- Minor breach - fine of £2000
2) Disciplinary Panel
- Serious Breach - unlimited fine / Expulsion
Process for disciplinary panel under a breach of conduct?
Disciplinary panel needed if its a serious breach
OR Gross persistent / failure to comply with rules
Discipline
1) Caution
2) Unlimited fines
3) Conditions of membership / expulsion
The panel is a public hearing
Hearing is posted on RICS website 14 days before
What happens if you are found not liable for a breach of conduct after disciplinary panel?
The RICS Member can apply to RICS to recover their costs
What is the RICS?
It is the foremost organisation for professionals working in the built environment, land and property sectors in the UK and abroad
Where does the RICS operate?
Worldwide - in over 140 countries and includes over 100,000 accredited members
What is the Royal Charter?
A decree that requires RICS to “Promote the usefulness of the profession for the public advantage in the UK and abroad”
How is the RICS Regulated?
It is self regulated
not regulated by government but internally monitored
RICS adheres to the 5 principles of better regulation
How is the RICS governed?
By a governing council of 55 currently
The GC meets 3 x a year to set strategic policy, chaired by the president
How many RICS professional groups are there?
Name a few
22
Quantity Surveying & Construction
Project Management
Valuation
Residential
Building Surveying
Infrastructure
You have named the Rules of Conduct for members.
Do we have to follow them?
It is good practice to follow these as you may open yourself up to a breach of conduct if not.
It is however not mandatory - only good practice
Why do we have rules of conduct for members and firms?
To ensure consistent, high standard of professionalism anywhere in the world. Clients know what to expect from RICS members.
What is meant by CPD?
Continued Professional Development
What are the CPD requirements?
1) Minimum of 20 hours per year.
2) Must have 10 hours formal - rest can be informal
3) Professional and ethical CPD must be undertaken on rolling 3 year programme
4) All CPD must be recorded online
What is formal CPD?
Any form of structured learning that has clear learning objectives and outcomes - professional course / online training
What are the CPD requirements for the APC?
96 hours within 2 years before sitting
48 hours of which has to be formal
Give some examples of formal CPD?
Professional Courses / Seminars
Formal teaching
Online events and video sessions
Webinars
What is informal CPD?
Self managed learning that is relevant or related to your professional role
Give some examples of informal CPD?
Private study
reading associated with professional role
mentoring - support to trainees
Delivering presentations
How would you meet the requirements for professional and ethical CPD?
1) Undertake free online RICS ethics module
2) familiarising yourself with New global professional and ethical standards
How do you record your CPD?
Using the RICS online CPD management recording system
where is G&T’s complaints handling procedure found?
Can be found on our intranet and is provided when requested.
What is RICS position on complaints?
1) Firms shall operate a complaints handling procedure (CHP) and maintain a complaints log
2) CHP must include an Alternative Dispute Resolution Mechanism approved by Regulatory Board
What is RICS position on a complaints handling procedure?
IT MUST:
be fit for purpose
be made available and understood by all staff
be shared with complainants
be regularly reviewed and updated
be agreed with PII brokers to not compromise cover
Provide details of independent redress if not resolved
Clients should be made aware of CHP in appointment
What should you do if you receive a complaint from a client?
Inform your line manager / supervisor
What should you do if you receive a complaint from a client?
1) Inform your line manager / supervisor
2) They should then inform the firms designated complaints handler
3) The DCH has 7 days from receiving complaint to write to acknowledge complaint and outline process and timescales for complainant
4) The complaint must be resolved within 28 days of acknowledgment of the complaint
5) G&T must write to inform complainant of outcome
6) If complaint not resolved - complainant referred to independent ombudsman provided by the RICS
PI insurer must be notified as soon as complaint had formally been made so they can update their premium if necessary
What is the RICS independent redress scheme?
Its independent adjudication for disputes between customers and companies regarding the surveying activities of subscribing RICS member firms
CEDR is the RICS approved ADR provider
What is the CEDR?
The Centre for Effective Dispute Resolution
It is the RICS approved ADR Provider
What is the need for a Complaints Handling log?
1) Enables complaints to be recorded
2) Enables complaints to be better managed
3) Identifies areas for improvement
When would we have to handle clients money?
1) To hold our fees in advance
2) Holding future payments to the contractor
What must be in place for us to hold Clients money?
Client Money Protection Scheme
What is the Client Money Protection Scheme?
Free service to the Clients of the RICS regulated firms to be reimbursed by direct loss of funds
What is the maximum that can be claimed per claim within the Client Money Protection Scheme?
£50,000 per claim
maximum aggregate is £5.3m per year
Claims must be made within 6 months
What systems and controls should a firm have in place for handling client money?
A firm should ensure that:
1) they hold client money in client bank accounts separate from all other monies
2) bank should be titled to include the name of the firm and ‘client’.
3) have written confirmation from the bank of client account conditions
4) have advised clients in writing of the bank account details, including arrangements for interest
5) Obtain consent from client in writing if firm is to retain interest
What happens if there are surplus client funds in an account?
1) Ensure all efforts are made to trace the client or owner of the money
2) hold all surplus money in a client suspense account
3) hold surplus money for at least 6 years
4) After 6 years the money may be donated to a registered charity
5) a receipt for this transaction should be obtained
What is a conflict of interest?
A conflict of interest is anything that impedes or might be perceived to impede an individuals or firms ability to act impartially and in the best interest of a client
Why should we be concerned over a conflict of interest?
Can cast doubt over your integrity. It can have a damaging effect on your firm and the profession
Give me an example of when a conflict of interest might occur?
1) acting for another person with competing interests at the same time; advising both a seller and a buyer of the same property
What is the general advice for firms on handling clients money?
1) All RICS regulated firms must protect the security of Client’s money on their behalf with robust controls and systems in place
2) All regulated firms who hold Client’s money must pay a regulatory fee on an annual basis to cover operational costs of the Regulatory Review Visit audit by RICS accountants
What practices need to be followed before account set up with Client’s money?
1) Client must agree to the account handling in writing with signatories from both parties
2) There must be an agreed drawdown schedule
Why is cash money avoided?
1) There is no auditable trail
2) We do not know where it has come from - possible money laundering
What practices need to be followed during account usage with Client’s money?
D R I D I C 3
DBA
Recon
I to C
DD
I/D
CMO
3 DAYS
1) A Designated bank account must be set up named ‘Client’ and name of the firm
- could be private account - signatory from G&T
- escrow account with 3rd party - comes with fees
- client must be advised of all details of bank account
2) Only clients money should be deposited
3) must be deposited within 3 days if sent to us first
4) interest to be paid to Client unless stated otherwise
5) Bank reconciliation undertaken at regular intervals
6) money should be distributed via direct debit
7) Procedures in place for insolvency or death
What practices need to be followed after account usage with Client’s money?
R E D R
Record 6/ 12 years
Effort to Return
Donate after 6 years
Hold Receipt
1) Record kept for 6/12 years from last statement
2) remaining money - all efforts to return to client
3) after 6 years - money can be donated to reg charity
4) Hold receipt of where funds have been sent
What is Professional Indemnity Insurance?
Third party insurance to protect professional advice and service by preventing the insured from bearing full cost of defending against a claim for negligence
What does Limited Liability mean?
how much a company can get sued for
indicates the amount of PII a company should take out
What does Professional indemnity mean do for a party?
Its puts a party back in the position they would have been if no loss had occurred
it provides financial protection in event a Client suffers financial loss as a result of negligence
Who has to take out PII?
All registered firms need to have adequate and appropriate PII in place that complies with requirements of RICS Rules of conduct for firms
What levels of PII can be taken out?
Based on firms turnover
£100k or less = £250k min limit of indemnity
£100k - £200k = £500k
£200k and above = £1m
What is G&T minimum level of PII?
Due to our turnover our min level of indemnity is £1m
But various levels are held based on project value
What PII should be taken out if your a new company with no previous turnover?
min requirement should be expected turnover for 1st year
What is the excess in terms of PII?
The uninsured amount of the claim
The excess is to try and deter fraudulent claims
What are the maximum levels of uninsured excess that an RICS regulated firm can carry?
Firm turnover £10m or over —> no limit set
Firm turnover £10m or less ——> greater of 2.5% or £10k
What does “ Each and Every Claim’ basis mean?
The limit of indemnity is payable in respect of each claim made in 1 year
What does “Claim Made” basis mean?
When claim is received, its the insurer in place at that time that will respond rather than insurer in place when negligent act occurred
- policies must cover past and present employees
- claim is made against G&T - not the individual
What’s the difference between guidance notes and practice statements?
Guidance notes are considered best practice
practice statements are mandatory documents that you must follow
Is there any type of CPD that has to be done on 3 yearly basis?
RICS Ethics Module
What needs to be avoided when handling clients money?
Money needs to be tracked at all times
should not be kept with any other money
kept in a secure bank account for clients money only
How should money be received from a client when handling their money?
Client’s can send money by cheque or transfer it to company account
Money should be deposited within 3 days
Can you tell me how you handle clients money?
Clients money should only be handled by trained and competent staff
Strict accounting systems in place
Money should be deposited within 3 days
If you were to set up a new company what would you need in place?
Firms details form
PI Insurance
Policies in place for holding clients money
Complaints handling procedure
Appropriate processes for training
Payment of any fees needed
What information do RICS firms have to submit to the RICS?
Details of PII
Nature of clientele
types of business staffing
complaints log and handling
info on clients money
Can you accept cash for fees?
G&T Policy - cannot accept cash for fees
Under money laundering regs cans accept up to £10k
Are you aware of the process for disciplinary procedures under RICS?
1) Receipt of info or allegation
2) Decision to begin an investigation
3) Decision as to if its a realistic prospect
4) Disciplinary Proceedings
What do you need in place to set up a new RICS regulated company?
1) PI insurance
2) Complaints Handling Policy
3) Policy on Holding clients money
4) Other insurance such as public liability, building insurance
Why does the RICS have rules of conduct?
Consistency of service and approach
maintaining professional standards, governance and regulation
Clients know what to expect from a MRICS
What are they types of RICS Professional standards?
1) Professional Standards
- mandatory requirements
2) Guidance Notes
- non mandatory but best practice to follow
3) APC
- requirements and guidance for entry into profession
4) Data standards
- ensure software and tech can adopt RICS standards
What is the RICS Black Book?
suite of guidance notes that define good technical standards for quantity surveyors and construction professionals
What is the status of the professional statement?
document provides members with mandatory requirements or a rule that a member / firm expected to adhere to.
What sanctions may RICS take if you fail to apply professional statement?
Written warning
possible expulsion
What should employers do to create an ethical environment?
Establish confidential procedures for whistle blowing independent of normal chain of command
include ethical evaluations into formal performance appraisal
promote CPD
become chartered with RICS
What is the difference between ethics and integrity?
ethics are more principles that govern persons behaviour or the conducting of an activity
integrity is quality of being honest and having strong moral principles
Key areas where ethics are important?
Conflicts of interest
whistle blowing
gifts / bribes / hospitality
money laundering / inside dealing
How do you keep up to date with topical issues?
RICS website
Discussions with colleagues
construction related news - building mag
Can you accept a gift from a client?
I would not accept gifts, hospitality or services which might suggest an improper obligation
Gifts can be accepted in some circumstances - consult the ethics tree and make informed decision
What things would you consider when assessing if a gift is appropriate?
value
timing of gift
if proportionate to working relationship
will gift affect my ability to be impartial
is it proportionate to gifts being given to others
What is a conflict of interest?
anything that impedes an individuals or firms ability to act impartially and in the best interest of the a client
Has the RICS published any information on conflicts of interest?
Conflicts of interest professional statement - March 2017
Give an example of a conflict of interest?
Acting for both developer and contractor
acting for two competing developers / contractors
What is informed consent?
Where RICS member has highlighted to all parties who are or may be affected that there is a conflict of interest. BUT where those parties give consent to continue with their role
What action should be taken if a conflict of interest arises?
As soon as you are aware - disclose to client in writing the possibility and nature of conflict
advise client in writing you cannot continue to represent
UNLESS
parties feel they can act 100% impartially
client finds it acceptable and approves in writing - INFORMED CONSENT
What is a bribe?
An inducement or reward offered, promised or provided to gain any commercial, contractual, regulatory or personal advantage
What is the Bribery Act 2010?
Bribery Act 2010 cover criminal law relating to bribery
Act contains 4 main bribery offences
1) General Offence of bribing
2) General Offence of being bribed
3) Offence of bribing a foreign public official
4) Corporate offence to prevent bribery
What are the 6 principles of the Bribery Act?
1) Proportionality - action taken should be proportionate to risk and size of the organisation
2) Top Level Commitment - Senior people best placed to ensure they conduct business without bribery
3) Risk Assessment - Will help show nature or extent of exposure to bribery
4) Due Diligence - having a risk based approach to business relationships
5) Communication - employers need to communicate policies and procedures to staff - training etc.
6) Monitoring and Reviewing - risks to organisation may change overtime - carry out regular reviews
Who does the Bribery Act 2010 apply to?
Applies to all people in both private and public sector
What is your position for compliance with the Bribery Act 2010?
My company has an anti bribery and corruption policy which applies to me as an employee. I follow the procedures in the policy
I would report any act of bribery to the Serious Fraud Office or National Crime Agency
What are the potential consequences for not adhering to the Bribery act 2010?
Max penalty of 10 years imprisonment and / or unlimited fine for individuals
Corporates face an unlimited fine
What is money laundering?
Illegal process of making large amounts of money generated by criminal activity appear to have come from a legitimate source.
What do you do if you suspect money laundering?
Raise with my line manager
Submit suspicious activity report to national crime agency
What regulations are associated with money laundering?
The money laundering and terrorist financing regulations 2019
A client asks you to take responsibility for making interim payments to the contractor. The client wants to give you £500k in cash to make the payments. What do you do?
I would not accept the cash. I would encourage the client to pay cash into a bank account. The bank then takes responsibility to check legitimacy of cash.
If i had serious concerns i would report to the National Crime Agency
What is corruption?
Corruption is a form of dishonesty or criminal offense undertaken by a person or organisation entrusted with position of authority
What is a price fixing cartel?
group of formally independent producers whose goal is to increase their collective profit by pushing price of a product up as high as possible
What is terrorist financing?
solicitation, collection or provision of funds with intention to support terrorist acts or organisations
What is facilitation payment?
payment made to a public or govt. official that acts as incentive for official to complete some action to the benefit of the paying party
What is modern slavery?
the severe exploitation of other people for personal or commercial gain
being forced to work against will or illegally
what is the relevant legislation for modern slavery?
Modern Slavery Act 2015
Examples of modern slavery?
1) Forced labour
2) human trafficking
3) Child Slavery
How would you report modern slavery?
Report to the Home Office or call modern slavery helpline
What does RICS say about PII for firms?
All firms MUST be covered by PII
Why is PII needed?
If a firm faces a claim, it is protected from financial loss that it cannot meet from its own resources
Ensures the firms clients do not suffer financial loss which the firm cannot meet
Any one claim vs Aggregate claim? Whats the difference
Any one - provides cover up to the full limit for each individual claim made in period
Aggregate - provides cover up to the full limit for all claims made in period
What measures can be taken to avoid PII claims?
1) Keep records of meetings / conversations
2) record recommendations / advice
3) Follow RICS guidance and professional statements
4) Follow RICS rules of conduct
5) Follow company procedures and policy
What is PII run off cover?
run off is a form of PII which covers historical liabilities of a business after it ceases to trade.
Any claims made under policy will relate to work carried out before trading ceased, so covers legacy issues
