Ethics Flashcards
What are ethics?
The moral principles that govern a persons behaviour or the conducting of an activity
One way to assess whether you are acting with ethics is to consider whether you would be happy for your actions to be publicly known and whether you could justify your actions if they are being challenged
What is the difference between RICS ethics and rules?
Ethics are a set of moral values while rules of conduct are a framework that we work to.
Tell me what you understand about conflicts of interest
When a person of trust has competing personal or professional interests.
When impartiality is removed/ difficult.
How could the conflict of interest be managed internally if two separate departments were working for the same client?
Separate offices
Make client aware of potential conflicts
Monitor conflict
Sign confidentiality agreements
Assuming you became chartered, how would you deal with a situation such as a friend asking for valuation/ advice?
I could not offer advice on my own with out PI insurance
If I did have PI insurance, I would ensure that the information given was subject to through checking process regardless who it was too.
If not comfortable I would advise them to find a surveyor scheme.
Adhere to rules of conduct.
What would you do if invited to an event by client?
Accept as long as not too high a cost and declare it of hospitality form.
What steps should be taken if there is a conflict of 2 clients represented by the same firm?
Separate offices
Make client aware of potential conflicts
Monitor conflict
Sign confidentiality agreements
How do you deal with a personal conflict of interest?
Disclose the relevant facts promptly in writing, including if you are receiving any remuneration over and above your fee.
What are the minimum levels of indemnity? How do you determine the level of PI cover?
100k or less = 250k
100-200k = 500k
200k+ = 1mil
PI cover is based on the firms annual turnover.
What sort of insurances do chartered surveyors need to have?
Professional indemnity cover
Building insurance
Contents insurance
Employers liability insurance
Run off cover
What are the maximum levels of uninsured excess?
Upto 10 mil = the greater of 2.5% or £10,000
Over 10 mil = 2.5% of insured sum
What sort of insurances do chartered surveyors need to have?
Professional indemnity cover
Building insurance
Contents insurance
Employers liability insurance
Run off cover
What are the requirements regarding PI by the RICS?
Each and every claim basis
Gives min wording
Sets out minimum levels of indemnity
Sets out maximum levels of uninsured excess
Run off cover 6 years
Should include cover for past and present employees.
What if the loss exceeds the cover provided by the PI insurance?
The professional/firm will pay the difference – in assets etc.
What measures should be taken to try and avoid PI claims?
Keep full and detailed records of meetings, conversations etc.
Record recommendations and advice given
Use proper letter of engagement, scope of service and terms of engagement
use RICS guidelines
Avoid poor management and excessive workloads
Are you familiar with the term limit of liability and where would it be used?
Limit of liability is used to place a cap on the level of exposure a business signs up to
In the aggregate means as a maximum after many different claims
If cover is for each and every claim, it is that level for each claim
Anything not covered by PI insurance can be gone after so assets could be at risk.
What does PII stand for?
Professional indemnity insurance
What benefits does PII provide the professional?
The professional is protected from financial loss.
Does not have to meet the claim from their own assets and resources.
What benefits does PII provide for client?
Can recover their financial loss
On what basis is PII underwritten in the uk?
On a claim made basis
What does PII in underwriting mean?
That it is the insurance policy that is in place at the time the breach is discovered that is claimed under NOT the insurance policy in place when the breach was made.
How many rules of conduct are there for members? What are they?
5
1- Member and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
2- Member and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
3- Members and firms must provide good quality and diligent service.
4- Members and firms must treat others with respect and encourage diversity and inclusion.
5- 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.
Why does RICS have rules of conduct?
To provide a framework that we can all work to and so the client knows they are getting a set level of service
Also useful professional guide for individual institution members
When were rules introduced?
2nd feb 2022
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?
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.
What must a complaints handling procedure include?
Include a redress mechanism
Details of terms of business to client
Clear, quick, transparent, impartial and free
Names and contact details of nominating person must be stated
Investigated within 28 days
All complaints, progress and recordings must be recorded
Advise PI insurers of complaint
2 stages minimum – 1 senior member of staff , 2 independent redress scheme
What is your employers complaints procedure?
a. 3 stage process
b. Stage 1 - Complaint comes in to the relevant office. Office acknowledges the complain within 7 days and provides a response within 28 days.
c. Stage 2 – If unresolved; complaint to be made in writing to Calum Campbell, Kevin Murchie or Les McAndrew. Complaint will be acknowledged within 7 days and responded to within 28 days.
d. Stage 3 – If unreseolved; complaint taken to an independent redress provider, as approved by the RICS regulatory board
What is an independent redress scheme?
It is a consumer scheme designed to handle small issues that would be disproportionally expensive to take to court. Each scheme has a financial limit.
If the scheme judges in favour of the complainant, it is binding. If it judges in favour of the firm, the complainant can take it to court.
RICS firms must specify which redress scheme they want to use, it could be an ombudsman, arbitration or sometimes adjudication.
Small claims court deals with £5,000 or below.
What do you do if you get a letter of complaint?
I acknowledge reception and I forward it to our designated complaint handler, as per our complaint handling procedure, providing additional information as required. If I am a sole practitioner, I inform the RICS if it warranted my complaint handling procedure and I notify my PI insurer.
In case of a breach of a rule of conduct what is the procedure?
New procedures were put into place in June 2007
Not every shortcoming wil 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 co operate fully with all enquiries
How can disciplinary proceeding be triggered?
Someone complaining to the RICS
An allegation by a client or third party
Information received or established by the RICS
What 3 actions can be imposed after the end of the investigation stage?
Fixed penalty
Consent order
Disciplinary panel
What are fixed Penalties?
A fine by the RICS
When are fixed penalties applicable?
It is used for minor breaches , failure to provide the RICS with required information ( annual returns, CPD records)
For continued non compliance a further notice may be issued and the fine increased
Appeals can be made against them within 28 days
What are consent orders?
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.
When are consent orders applicable?
For low level breaches of the rules that can easily be corrected
Can be applied for the breach of any of the rules
Fines applied may be £2,000 per breach.
When is a disciplinary panel applicable?
Used for more serious breaches of conduct
The panel will usually be held in public
The burden of proof is on the RICS
Balance of probabilities
What penalties can a disciplinary panel apply?
Caution
Reprimand
Undertakings as to future conduct
Fines (unlimited)
Condition of continued membership or registration
Member expulsion or removal of firms registration
What sort of breaches would expulsion be suitable for?
Gross, persistent or wilful failure to comply with an RICS rule of conduct e.g fraud, dishonesty, conviction of a serious criminal offence, gross incompetence, deliberate discrimination, misappropriation of clients money.
How are they published-
Disciplinary panel hearings are posted on the website 14 days before the decision is published in RICS business, on the website and in local newspapers. A list of number of fixed penalties and consent orders issued during the previous quarter is placed on the RICS website for 12 months, doesn’t name individuals or firms.
What are the main principles of the bribery act?
6
Proportionate procedures – procedures that match the size of the firms risk
Top level commitment – high level management foster a culture within firm that bribery is never acceptable.
Risk assessment – Assesses the nature and extent of its exposure to potential external and internal risks of bribery.
Due Diligence – investigation procedures, taking a proportionate and risk based approach, in respect to persons who will perform services on behalf of the organisation.
Communication -bribery policies and procedures are embedded and understood throughout internal and external communication including training.
Monitoring and review – monitors and reviews procedures in place by the firm and makes improvements where necessary.
