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APC Final Revision > Ethics > Flashcards

Ethics Flashcards

1
Q

Prof. & Ethical Standards

A
  • (RISTR) (reflection on you, your firm and RICS)
  • Respect – Polite and respectful
  • Integrity – Be honest, don’t show bias or act with conflicts of interest
  • Service – Provide advice to the best of your ability, communicate openly (fees, scope of services, extent of expertise)
  • Trust – Promote the profession positively and with good faith
  • Responsibility – Be accountable, be diligent, question if not right
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2
Q

Key Ethical areas

A
  • Gifts, bribes and hospitality
  • Discrimination
  • Conflicts of interest
  • Money laundering
  • Confidential information
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3
Q

Five Rules of Conduct

A
  • HASPR
  • Honesty and integrity - not act with conflict of interest, comply with bribery act
  • Act in Public interest - Instil confidence in profession
  • Service - Understand client requirements, be clear on scope, deadlines
  • Professional competence - specialist knowledge, CPD
  • Respect - promote inclusivity
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4
Q

Professional Obligations to RICS - Member & Firm

A
  • Members (CIC)
  • CPD
  • Information provision
  • Cooperate
  • Firms (CILPRD)
  • Complaints
  • Information Provision
  • Locum Cover
  • PI
  • Reporting info for Firms (Companies House)
  • Display RICS
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5
Q

Why do the RICS have Rules of Conduct?

A
  • Consistency of service,
  • maintain standards,
  • protect clients,
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6
Q

Complaints

A
  • Expression of dissatisfaction.
  • Stage 1; Client formalises complaint in writing.
  • Company acknowledges in 7 days and
  • respond within 21 and
  • notify PI.
  • Stage 2; Independent Redress scheme if not resolved in 28 days (Arcadis - Scheme for Arbitration Services)
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7
Q

Conflict of interest
Types of conflict

A
  • Anything that impedes an individual or firms ability to act impartiality
  • Types of conflict
  • Party - e.g. Acting for a developer and the contractor i.e. one impacts on the other
  • Own interest – e.g. Acting for a developer where the works may detrimentally impact on the value of a property you own
  • Confidential information – e.g. Acting for two parties with are competing i.e. two developers interested in the same land (Cost Plan on land that was being considered for acquisition)
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8
Q

Action on Conflict of Interest

A
  • Identify Conflict
  • Offer to step down
  • Gain party confirmation if ok to proceed
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9
Q

Gifts / Bribery
Accept?

A
  • Do not accept if could be perceived to impact impartiality.
  • Hospitality acceptable (sport, dinner, travel expense). Accepting gifts;
  • Value? Who for? Proportionate?
  • Timing (tender award)? Could declining offend?
  • Bribery is a criminal offence.
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10
Q

Bribery Act 2010

A
  • Liability for corruption;
  • Bribing,
  • being bribed,
  • failure to prevent bribery (10 year prison, unlimited fine, director disqualification).
  • All levels of seniority are liable for prosecution under the act
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11
Q

PI & WHy required>

A
  • PII – Insurance against a claim following negligence or failure of duty of care.
  • Covers legal defence and compensation.
  • Indemnity level based on previous years turnover.
  • Indemnity – Cover against loss
  • Why required? Assurance for client against negligence and protection/cover for RICS member
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12
Q

RICS PI Insurance requirements:

A
  • Each and every basis
  • Full civil liability (Protection against civil court action as opposed to Construction & Technology court)
  • Minimum levels of cover
  • Run off cover
    Min. Indemnity
  • £0- £100k = £250k
  • £100-200k = £500k
  • £200k+ = £1m Limit of indemnity = 2.5% (£10k min.)
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13
Q

How best to avoid claims:

A
  • Advise within specialism
  • Use RICS guidelines / follow best practice
  • Keep records
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14
Q

General Insurance requirements of a firm:

A
  • Professional Indemnity
  • Public liability - Covers injury or death to public, also covers loss or damage to 3rd parties
  • Employer liability - Required by all firms employing staff, Pays out if employee is injured or ill
  • Locum cover; Assurance that business will be managed in event that director is unable to run
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15
Q

Principles of better regulation

A
  • PACTT
  • Proportionality – Regulators should only intervene when necessary.
  • Accountability – Regulators must justify their decisions and be subject to public scrutiny.
  • Consistency – Common fair approach to regulation.
  • Targeting – Focus on the problem and minimise side effects.
  • Transparency – Open and communicate regulations clearly.
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16
Q

RICS Disciplinary issues

A
  • Failure to use complaints procedure
  • Conflict of interest
  • Negligence
  • Misuse of clients money
  • Allegation of a criminal offence
  • Failure to comply with rules of conduct
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17
Q

Grounds for expulsion directly by RICS

A
  • Failure to pay membership fees
  • Failure to maintain PI
  • Failure to undertake CPD
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18
Q

Continued Professional Development (CPD)

A
  • Ensure you are aware of latest industry developments.
  • 20 hours PA (10 formal).
  • Maintain professional & ethical standards.
  • Formal = structured/course/technical author.
  • Informal = Self-managed private study. Networking not classed as CPD.
  • CPD recorded annually (31 Jan) via RICS website.
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19
Q

Current RICS Structure

A
  • (PGRM)
  • Privy Council
  • Governing Council
  • Regulatory Board
  • Management Board
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20
Q

Privy Council

A
  • Grants and awards Royal Charter on behalf of the UK government
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21
Q

Governing Council

A
  • Setting direction,
  • strategy
  • management of royal charter obligations
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22
Q

Regulatory Board

A
  • Reports solely to the governing council on its activities
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23
Q

Management Board

A
  • Day to day performance and delivery of the business
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24
Q

RICS Professional Groups

A
  • 19 disciplines under 3 categories;
  • Land
  • Property
  • Construction - QS, PM, BS
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25
Q

Locums –

A
  • Covers long term illness & death etc. RICS member,
  • Solicitor or Accountant are suitable Locums.
  • Agreement; nature, confidentiality, conflict of interest, fee, ending, PI.
  • Locum may need to oversee the sale of the business.
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26
Q

Money Laundering

A
  • Client; Secretive (identity or source of funds)
  • Intermediary only
  • Criminal association
  • Overly knowledgeable on money laundering.
  • Parties; High-risk countries – Connected without business reason – Unusual transactions
  • Fund Source; Large amounts of cash
  • Unexplained third-party payments
  • Transaction Features; loss making
  • unnecessarily complex
  • unusual.

Money Laundering 2017
- Prevent exchange of money obtained from criminal activity.
- Identify customers
- keep records
- report suspicious behaviour

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27
Q

Guidance for firms (money laundering):

A
  • Written ML policy - do not accept cash
  • Systems to implement guidance
  • Provide training
  • Keep reports of suspicion confidential
  • Identify beneficial owner of potential transaction
  • Notify senior person/ML officer to ensure compliance
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28
Q

Client paying in Cash

A
  • Arcadis policy is to not accept cash
  • Simply state internal policy
  • Any client wishing to do so should be reported to ML officer
  • If the fees paid in cash are over £12k it must be informed to the government laundering department
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29
Q

GDPR

A
  • Companies must establish processes.
  • Right to have info deleted.
  • Company penalty of 4% annual revenue.
  • Report data breach within 72 hours.
  • Rights – Inform what will happen to info.
  • Access (view data).
  • Adjust (interests/info).
  • Erase data.
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30
Q

FRICS

A
  • Demonstrate intent to further the profession -
  • Act for the benefit of a third party - charity
  • Promote the profession. 4 categories in which the 17 characteristics are grouped within, they are:
  • Champion –
  • Expert –
  • Influencer -
  • Role model
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31
Q

Dealing with a conflict

A
  • Disclose conflict to client in writing identifying that will need to step down.
  • Still possible to proceed –
  • If all parties agree that it is possible to act impartially the clients approval should be sought in writing for informed consent and the arrangement should be clearly outlined.
  • E.g. QS and fund monitor both Arcadis but surveyors based in different offices and respective information is confirmed as not being accessible by the other.
32
Q

Handling gifts and hospitality

A
  • Gifts & hospitality should not be accepted or offered if they are likely to compromise you or your firm’s impartiality or integrity,
  • or if it gives the impression of doing so.
  • Gifts are associated with bribery.
  • Offers should be gratefully declined by being open and transparent about potential perception.
33
Q

Dealing with gifts

A
  • During the latter stages of Final Account negotiations on the UPS scheme one of the Main Contractors involved in the negotiation asked if would like to attend a social event and dinner.
  • Due to the pivotal timing of the invitation, I politely declined explaining Arcadis’ policy of accepting gifts.
34
Q

Handling client’s money
What would you do if client money was not claimed i.e. if the project was aborted?

A
  • Separate account.
  • Clear record of transaction.
  • Importance of clear process – 3rd party can identify origin of funds;
  • Insolvency (either party), Death of sole practitioner,
  • Left over client money –
  • Find owner
  • Hold for 6 years
  • Donate to charity
35
Q

Setting up professional indemnity insurance

A
  • Duty to hold adequate insurance to protect client.
  • Each and every basis e.g. not impacted by other claims e.g. if other claims had exhausted limit in the period.
  • Cover based on preceding year turnover up to £100k= £250k turnover - £200k = £500k turnover over £200k+= £1m.
  • Run off cover in the event the business is wound up to allow a client to bring action within limitation period.
36
Q

Fees transparency & exclusions

A
  • Whitwell - include DD on initial report extra fee
  • Identify resource
  • Associated cost of resource
  • Exclusions - Drawdown approval (subsequently included - additional fee)
  • Assumption - 18 month programme (prolongation should programme be extended)
37
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.
38
Q

Advising on areas outside of your expertise?

A
  • When giving advice I understand that I should only advise on matters that are relevant to Quantity Surveying
  • Public footway was required to be diverted which would require work adjacent to a boundary wall for multiple parties.
  • Given the works would infringe on other properties I knew that Party Wall input would be required
39
Q

React when MC Wrexham accuses you of undervaluing?

A
  • Empathised with contractor who was experiencing cashflow issues
  • I valued the work in line with actual site progress. I stated that this approach was fair for all parties
40
Q

Who creates Black Books?

A

Professional Group e.g. Quantity Surveying departmen

41
Q

I always ensure that I maintain confidentiality when working on projects in order to uphold the RICS’ professional status of acting in the Client’s best interests.

A

⦁ Client information stored on secure server
⦁ Access only by project members
⦁ Server access only by employees

42
Q

When undertaking Interim Valuations, I ensure that I comply with the timescales stipulated under the contract to comply with statutory regulations, which seeks to ensure fair payment standards.

A

⦁ Contractor makes Application for Payment at the Interim Valuation Date (1st)
⦁ Due Date is 7 days after (8th)
⦁ Interim Payment Notice is issued 5 days after the due date (13th)
⦁ Employer can issue Pay Less Notice 5 days before the final date for payment (17th)
⦁ Final Date for Payment is 14 days from due date (22nd) (typically amended to 21 days (29th))

43
Q

When acting as an Independent Monitoring Surveyor with the Lender being the Client, the Borrower asked whether Arcadis could provide a planning service. I assessed whether this would be a Conflict of Interest and acted accordingly.

A
  • Informed Client in writing of request with potential conflict
  • Client confirmed they were happy to proceed
  • I confirmed that parties all happy to proceed and best interests would be achieved
  • Service was dealt with by separate office and no access to the respective folders was allowed
  • Information only gained direct from Client and not Arcadis to Arcadis
  • Dealing with S106 - School planning on future phase
44
Q

When outlining professional fees to Clients I ensure this is done transparently. I ensure that the Client understands the service they have agreed to pay for as well as any aspect that is not covered within the fee.

A
  • Whitwell - include DD on initial report extra fee
  • Identify resource
  • Associated cost of resource
  • Exclusions - Drawdown approval (subsequently included - additional fee)
  • Assumption - 18 month programme (prolongation should programme be extended)
45
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.
46
Q

I understand the purpose of the RICS’ policy on CPD and ensure I am compliant.

A

Complying with RICS’ CPD policy for members
⦁ All members must undertake a minimum of 20 hours CPD (10 hours must be formal).
⦁ APC - 48 hours in the 12 months prior to your final assessment (50% formal)
⦁ Maintain professional & ethical standards.
⦁ Formal- structured/course/technical author.
⦁ Informal - Self-managed private study. Networking not classed as CPD.
⦁ CPD recorded annually (31 Jan) via RICS website.

47
Q

How do you keep up to date with topical issues?

A

⦁ I follow updates on the RICS website and Construction Journals
⦁ I undertake regular web research on key topics relevant to my field of surveying.

48
Q
  • I have reviewed Arcadis’ Professional Indemnity Insurance and checked their
  • Client accounts (money) procedures are in line with RICS policy.
A

⦁ PI - £1m Each and Every - EA & QS - Wrexham
Turnover
£100k - £250k PI
£200k - £500k PI
£200+ - £1m

Client Account
⦁ Clearly denoted as a client account with name.
⦁ Clear records.
⦁ Locum access.

49
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.
    ⦁ RICS guidelines.
    ⦁ Avoid excessive workloads
50
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.

51
Q

If an estimate prepared by a QS is incorrect can the client claim damages?

A

⦁ An estimate that is incorrect in itself will not provide the client with a right of redress.
⦁ The client must demonstrate that the QS warranted the accuracy of the estimate or that it was incorrect due to a lack of reasonable skill and care.
⦁ It could have been incorrect due to reasons outside their control for example market conditions or an item referred to in their exclusions. E.g. Ground investigation report / structural recommendations

52
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
⦁ Agree a drawdown of monies against the services being provided with the client.

53
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

⦁ Verify the facts and confront him reminding him of his duties as a member of the RICS.
⦁ 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.

54
Q

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

A
  • Public Liability -covers injury or death to public, also covers loss or damage to 3rd parties
  • Employer liability - Required by all firms employing staff, Pays out if employee is injured or ill
  • Building’s insurance of an office premises.
  • PI
55
Q

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

A
  • Annual return to RICS on-line (Failure to do so leads to a fixed penalty)
  • Type of business and staffing.
  • Nature of clients.
  • Training provision.
  • Complaints handling procedures details and records.
  • PI insurance details.
  • Whether the firm holds clients’ money.
56
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

57
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.
⦁ 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.

58
Q

Party Wall - Whitwell

A
  • When giving advice I understand that I should only advise on matters that are relevant to Quantity Surveying and
  • in instances where I have been asked to provide advice outside the realms of my expertise I highlight that advice should be sought be a professional within that field.
  • Public footway was required to be diverted which would require work adjacent to a boundary wall for multiple parties.
  • Given the works would infringe on other properties I knew that Party Wall input would be required
59
Q

In a progress meeting the Main Contractor accused me of undervaluing the works which they suggested was constraining their cashflow. When responding I ensured that I maintained my professionalism.

A
  • Empathised with contractor who was experiencing cashflow issues
  • I valued the work in line with actual site progress. I stated that this approach was fair for all parties.
60
Q

If somebody came into the office stating they worked for the client and wanted to see the client files, what would you do?

A
  • I would not release confidential client information unless I had expressly received confirmation
61
Q

What professional groups would you want to become apart of within the RICS?

A
  • As I become more experienced I would consider contributing to the QS and Construction group
  • Contribute to black book developments
62
Q

What is the Bitchard report?

A
  • RICS enquiry made in 2021 into issues raised in the Levitt report
  • Return control to members
  • Ensure the Institution’s activities are centred on the public interest
  • Give greater priority to diversity and inclusion
  • The aim of the Bichard Review was to ‘create a new sense of purpose and direction so that RICS can once more stand tall as an exemplar professional institution, capable of tackling the challenges which will shape the way we all live in the years to come’.
63
Q

What is the Ethics Decision Tree?

A

Series of questions which seek to ensure compliance with the Rules of Conduct

64
Q

I appreciate that Client satisfaction is paramount in maintaining the RICS’ reputation.

A
  • RICS required to promote and regulate the profession whilst protecting clients. (Royal Charter 1881)
  • Good service that is accountable increases confidence in profession and leads to more business.
65
Q

For example, I understand the importance of dealing with complaints as well as complying with the Bribery Act 2010

A
  • Complaints; Enable a clear process for Clients to communicate dissatisfaction with a service
  • Bribery Act; Being bribed, bribing or failing to prevent is a serious crime with unlimited fine and up to 10 year prison sentence. Such activity undermines professional credibility and impartiality of the indsutry
66
Q

I understand why the RICS requires that companies hold run off cover

A

⦁ Insurance against member retirement or firm ceasing to trade.
⦁ Claims usually in line with limitations period of contract i.e. 6/12 years post completion.

67
Q

Babb vs Merett;

A

⦁ Babb (surveyor & employee) undertook valuation for Merrett (client & purchaser) later found to be negligent.
⦁ Company no longer existed with no run off cover in place.
⦁ Court ruled Babb could be pursued for losses personally.

68
Q

I am aware of bodies within the RICS that seek to help members such as Lionheart.

A
  • Lionheart - members fund for challenging times. Financial support, health & wellbeing, counselling, work support
  • Matrics - Network supporting and developing young professionals
69
Q

I always act professionally and ethically - How?

A
  • Complying with the RICS Rules of Conduct:
  • Honesty
  • Act in public interest
  • Service
  • Professional
  • Respect
70
Q

I have a duty of care to identify and report when others may breach the RICS Rules of Conduct. How might you report someone? What if it was subjective

A
  • If I knew that someone was knowingly not complying with the Rules of Conduct e.g. Bribing, Acting with a Conflicts of interest, not keeping information confidential I would have to report them
  • If it was subjective or the party was genuinely naïve to a potential breach I would mention to the individual that their action might be perceived as contravening the Rules of Conduct and suggest they carefully consider their actions.
71
Q

I always ensure that I maintain confidentiality when working on projects in order to uphold the RICS’ professional status of acting in the Client’s best interests.

A

⦁ Client information stored on secure server
⦁ Access only by project members
⦁ Server access only by employees

72
Q

When undertaking Interim Valuations, I ensure that I comply with the timescales stipulated under the contract to comply with statutory regulations, which seeks to ensure fair payment standards.

A

⦁ Contractor makes Application for Payment at the Interim Valuation Date (1st)
⦁ Due Date is 7 days after (8th)
⦁ Interim Payment Notice is issued 5 days after the due date (13th)
⦁ Employer can issue Pay Less Notice 5 days before the final date for payment (17th)
⦁ Final Date for Payment is 14 days from due date (22nd) (typically amended to 21 days (29th))

73
Q

HGCRA

A
  • Housing Grant Construction Regeneration Act 1996
    Ensure payments are made promptly throughout supply chain;
    ⦁ Interim stage payments
    ⦁ Contractor informed of amount due
    ⦁ Suspend for non-payment
    ⦁ Adjudication
    ⦁ Disallowing pay when paid clauses
    Applies to all contracts for construction operation
74
Q

LDECA

A

⦁ Payment notice issued 5 days after due date,
⦁ Default notices - If no payment notice after 5 days, then receiving party can issue their own
⦁ Pay less notice- 5 days before final date for payment
Adjudication:
⦁ Provisions need to be in writing but contract doesn’t necessarily
⦁ Timescales set out for adjudication

75
Q

When acting as an Independent Monitoring Surveyor with the Lender being the Client, the Borrower asked whether Arcadis could provide a planning service. I assessed whether this would be a Conflict of Interest and acted accordingly.

A
  1. Informed Client in writing of request with potential conflict
  2. Client confirmed they were happy to proceed
  3. I confirmed that parties all happy to proceed and best interests would be achieved
76
Q

When is a firm required to register?

A
  • Surveying services to public
  • 50% principals are RICS members
77
Q

Firms eligible to register?

A
  • Surveying services to public
  • 25% principals are RICS members

APC Final Revision (22 decks)

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