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APC (EB) > Ethics > Flashcards

Ethics Flashcards

1
Q

SBHG Window replacement programme
How did you act with integrity?

A

The client suggested completing planning applications to properties before the finalised list of the programme was complete. This presented a significant fee opporuntity for our organisation, and would favour my performance internally. However, I knew that a priority of my client was to maximise the budget for works. By advising them to refrain from compelting the planning applicaitons prematurely, I was honest and acted with intergrity to provide my client with the highest level of service.

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2
Q

SBHG Window replacement programme
Why did you recommend postponning the planning applications?

A

The final property list had not been determined. If I had completed the planning applications to all the properties on the draught list presented at the time it would have resulted in planning applications being completed to properties that were not on the finalised programme. This would reducced available spend for the programme, which was a priority for my client.

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3
Q

SBHG Window replacement progamme
Which rules of conduct did you apply?

A

I applied all of the rules of conduct throughout the project, but in this scenario in particular :
Rule 1: Act with integrity, to not be improperly influenced by the potential of a higher fee.
Rule 3: Provide good quality and diligent service, to recognise that the clients priority would be works completed not planning applications to properties outside of the final programme.

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4
Q

What is the RICS motto?

A

The motto is ‘Est Modus in Rebus’ which in latin translates to, ‘ There is measure in all things”

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5
Q

What is the Mission Statement of RICS?

A

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

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6
Q

When was RICS founded?

A

It was founded in 1868.

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7
Q

When did RICS receive its royal charter?

A

In 1881

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8
Q

How is RICS Structured?

A

The RICS was founded in 1868 with the Royal Charter being granted by the Privy Council in 1881
It is self regulateed and internally monitored meaning that it is not regulated by the government or external parties.
Bye Laws Determine how RICS is regulated
The governing councilagree the strategy for RICS
The regulatory board, audit committee and management board are beanth the governing council and execute strategy set out by them.

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9
Q

What are the RICS 5 principles of better regulation?

A

Proportionailty
Accountability
Consistency
Targeting
Transparency

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10
Q

What is the difference beteween RICS ethics and rules?

A

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

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11
Q

What is rule 1 of the new rules of conduct?

A

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

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12
Q

What is rule 2 of the new rules of conduct?

A

Members and firms must maintain their professional competence and ensur that services are provided by competetnt individuals who have the necessary expertise.

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13
Q

What is rule 3 of the new rules of conduct?

A

Members and firms must provide good-quality and dilligent service.

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14
Q

What is rule 4 of the new rules of conduct?

A

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

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15
Q

What is rule 5 of the new rules of conduct?

A

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.

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16
Q

Why did the preiovus Rules of Conduct Change?

A

Following reasearch and consultation with firms and members, the majority voted in favour of replacing.
To provide greater clarity for RICS members and firms.
I also undesrtand there is now a greater focus on cleare example behaviours, understanding evolving technology and talking climate change.

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17
Q

Talk us through your understanding of the rules of conduct changes?

A

Replace the following documents:
Rules of conduct for members
Rules of conduct for firms
Global Professional and Ethical Standards
Appendix A of the Rules of conduct contains the professional obligations for members and firms

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18
Q

What are the professional obligations of members?

A
  1. Members must comply with CPD requirements, 20 hours of CPD each calendar year, 10 hours formal
  2. Members must cooperate with RICS
  3. Members must promoptly provide all infromation reasonably requested by the Standards and Regulation board, or those exercising delegated authority on its behalf.
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19
Q

What are the professional obligations of firms?

A
  1. Firms must publish CHP, including alternative disputre resolution provider approved by RICS, and maintain complaints log.
  2. Firms must ensure that all previous and current professional work is covered by adequate and appropraite professional indemnity cover that meets the standards approved by RICS.
  3. Firms with a sole prinpal must make arrangements for work to continue in their incapcitation, locum agreement
  4. Firms must cooperate with RICS.
  5. FIrms must promptly provide all infroamtion reasonably requested by the Standards and regulation board, or those exercising its behalf.
  6. Firms must display business logo on literature, in compliance with designation standards.
  7. FIrms must report to RICS, any matter that they are to report under the RUles for the Registration of firms.
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20
Q

What is the RICS ethics decision tree?

A

It is process to check if a decision or service you are providing is in line with RICS ethical standards.

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21
Q

What are the steps in the RICS ethics decision tree?

A

1) Do you have sufficient facts on issue.
2) Is it legal?
3) Is it inline with RICS Rules of conduct?
4) Have you consulted with the appropriate people?
5) Do you have clear reasoning in reaching your decision?
6) Is your decision informed?
7) Would you be content for your actions to be made public, in the newspaper or on the internet?

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22
Q

Why does RICS have Rules of Conduct?

A

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

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23
Q

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

A

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

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24
Q

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

A

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

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25
Q

How can a disciplinary proceeding be triggered?

A

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

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26
Q

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

A

Fixed penalty.
Consent order.
Disciplinary panel.

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27
Q

What are fixed penalties?

A

A fine by the RICS

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28
Q

What are consent orders?

A

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

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29
Q

When is a disciplinary panel applicable?

A

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

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30
Q

What sort of breaches would expulsion be suitable for?

A

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

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31
Q

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

A

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

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32
Q

Would you advertise your new company in the press?

A

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

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33
Q

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

A

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

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34
Q

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

A

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

35
Q

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

A

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

36
Q

What are the different types of client money accounts?

A

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

37
Q

What is meant by the term Negligence?

A

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

38
Q

Tell us about the Merrit V Babb case law?

A

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

39
Q

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

A

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

40
Q

Tell us about the Merrit V Babb case law?

A

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

41
Q

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

A

6 years when exectued underhand
12 years when executed as a deed

42
Q

What must a complaints handling procedure include?

A

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

43
Q

What is an independent redress scheme?

A

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

44
Q

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

A

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

45
Q

What is the ‘Clients’ Money Protection Scheme’?

A

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

46
Q

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

A

For the purpose of dual authorisation.

47
Q

What are the continuous professional development (CPD)
requirements?

A

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

48
Q

How many hours must you do?

A

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

49
Q

What sorts of activities are included as CPD?

A

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

50
Q

How do you differentiate between the different categories of CPD?

A

Use of the CPD decision tree, structured programme that is either assessed by others or involves interaction i.e. classroom means formal. If not programme, assessment or interaction then informal

51
Q

what types of articles do you read?

A

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

52
Q

What recent article have you read from the RICS?

A

Three experts on the best ways to retrofit housing, with details that wall insulatino should not be first measure and doors and windows houdl be first call.
Shortage of scaffolding, high material prices are causing for shortage of scafolding in the industry.

53
Q

How do you keep up to date with topical issues?

A

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

54
Q

What is your CPD strategy?

A

I meet with my manager twice a year to review my career development plan and objectives.
I build my CPD strategy around these objectives, current topics and personal interests.
Most recently I have been talking with my manager about undergoing a retrofit assessor course.

55
Q

What does PII stand for?

A

Professional Indemnity Insurance.

56
Q

What is the purpose of Professional Indemnity Insurance?

A

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

57
Q

What benefits does PII provide for the professional?

A

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

58
Q

What benefits does PII provide for the client?

A

They are able to recover their financial losses.

59
Q

On what basis is PII underwritten in the UK?

A

On a claims made basis.

60
Q

What does a claims made bais means for PII?

A

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

61
Q

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

A

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

62
Q

What are the minimum levels of indemnity?

A

Turnove/ limit of indemnity
£100,000 or less / £250,000
£100,001 to £200,000 / £500,000
£200,001 and above / £1,000,000

63
Q

What are the maximum levels of unisured excess?

A

Limit of indemnity/ max uninsured excess
£10,000,001 or less: 2.5% of the sum insured, or £10,000 whichever is greater
£10,000,001 and above : no limit

64
Q

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

A

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

65
Q

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

A

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

66
Q

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

A

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

67
Q

What are the main elements included within a fee proposal?

A

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

68
Q

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

A

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

69
Q

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

A

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

70
Q

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

A

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

71
Q

Tell me what you understand about conflicts of interest?

A

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

72
Q

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

A

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

73
Q

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

A

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

74
Q

What are the offences under the Birbery Act?

A

The offences are:-
o Making a bribe.
o Receiving a bribe.
o Bribery of a foreign public official.
o Failure of a corporate entity to prevent bribery on its behalf.

75
Q

What does the Birbery Act apply to>

A

The legislation applies to all UK Entities and includes associated Persons for example sub-consultants
and external advisors.

76
Q

What are the principles of prevention/

A

There are six principles of prevention companies should put in place:-
1. Proportionate Procedures.
2. Top Level Commitment.
3. Risk Assessments.
4. Due Diligence.
5. Communication.
6. Monitoring & Review.

77
Q

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

A

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

78
Q

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

A

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

79
Q

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

A

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

80
Q

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

A

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

81
Q

What is you understanding of the CHP at your firm?

A
  • Handled by a senior partner
  • If complaint is received verbally, it is requested in writing.
  • Within 7 days of receipt, contact will be provided explaining our understanding of the situation and the investigation/corrective actions to be taken
  • If complainant is dissastisfied, attempt to solve primarily through negotiation. If not it will be taken to ADR.
82
Q

Who is the president of RICS?

A

Ann Gray
She became presdent in March 2023
Overseeing the transformation programme

83
Q

What is the RICS Governance Structure?

A

APC (EB) (22 decks)

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