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APC Revision > Ethics > Flashcards

Ethics Flashcards

1
Q

What is a Bye Law?

A

A rule or law established by an organization or community to regulate itself, as provided for by a higher authority.
Changes to the Royal Charter and Bye-Laws can only be amended following a membership vote and approval of Privy Council, which is part of the UK Government.

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2
Q

Give an example of one of the RICS Bye Laws

A

Bye-Law 5 relates to conduct of RICS Members and Firms

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3
Q

What is the role of RICS?

A

The RICS is designed to effect positive change in the built and natural environments.
It promotes and enforces the highest professional qualifications and standards in the development and management of land, real estate, construction and infrastructure

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4
Q

What are the key function of RICS?

A

Advance the highest ethical and technical standards
Protect consumers and businesses through strict regulation of standards
Promote the highest standards of education and professional training
Provide expert impartial advice to governments, businesses and the public

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5
Q

Explain your understanding of the RICS Levitt review

A

Published in 2021 by Alison Levitt KC
An Independent Review into internal governance failings that occurred in RICS 2018-19.
A key recommendation was to conduct a wide-ranging examination of purpose, governance and strategy, conducted by an external reviewer.
This triggered RICS to commission Lord Bichard to undertake the review.

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6
Q

What are the 6 RICS values?

A

Integrity
Transparency
Inclusion
Collaboration
Advocacy
Passion

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7
Q

Why do you want to become an RICS member?

A

Being a member:
- Provides status
- Provides a competitive advantage
- Gives access to a network of over 134,000 members worldwide
- Professional development

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8
Q

What do you need to do when setting up a firm?

A

The Firm must provide surveying services to the public
It must operate in the UK
It must have at least 50% of the Firm’s Principals be RICS Members.

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9
Q

What are the 3 main benefits for RICS regulated firms?

A
  1. Confidence for clients – as regulated firms are monitored by RICS regulation
  2. Professionalism – firms have to provide clear, impartial and expert advice
  3. Security – firms have to have a recognised complaints procedure, access to free independent redress and PII cover

Other benefits?
4. Regulation provides a ‘gold standard’ of quality control for clients

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10
Q

What are the current RICS rules for registration of firms and when was the last change?

A

RICS Rules for Registration of Firms Version 8 - updated in February 2022

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11
Q

What happens if there is a dispute concerning the registration of a firm?

A

Any disputes concerning the registration of a firm will be heard by the RICS Standards & Regulation Board

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12
Q

What are the 6 areas of information required in an annual return?

A
  1. Type of business and staffing details
  2. Statutory regulated activities – such as financial services
  3. Nature of clients
  4. Complaints handling procedure details and records
  5. Professional Indemnity Insurance details
  6. Whether the firm holds clients’ money
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13
Q

Explain to me the new RICS Rules of Conduct

A

The Rules of Conduct are mandatory standards of professional conduct and practice expected of all RICS members, candidates, students, and regulated firms.
There are five new Rules which have been updated to address challenges relating to sustainability, the use of data, and diversity and inclusion
These apply globally, although they are designed to complement national legislation and legal requirements.

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14
Q

What are the 5 Rules?

A
  1. RULE 1 - Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS
  2. RULE 2 - Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise
  3. RULE 3 - Members and firms must provide good-quality and diligent service
  4. RULE 4 - Members and firms must treat others with respect and encourage diversity and inclusion
  5. RULE 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
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15
Q

How should a RICS member or regulated firm act when negotiating fees?

A

Firms should avoid price fixing, aggressive fee cutting or collusion with competitors
You must be completely transparent with clients and customers
The granting or accepting of referral fees should be considered in the context of the Bribery Act 2010 and the RICS Rules of Conduct

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16
Q

When you are being appointed by a client, what should you consider?

A

That you a professionally competent
That there are no conflicts of interests
That you have confirmed the terms of engagement in writing and get written approval from the client before you start work on the instruction

17
Q

What is a conflict of interest?

A

A conflict of interest arises when a members’ or firms’ impartiality is threatened

18
Q

What do the RICS Bye Laws state about client confidentiality

A

Client confidentiality must be maintained for all client affairs
This includes historic information and information provided by a client prior to instruction

19
Q

What is Professional Indemnity Insurance (PII)?

A

A type of insurance designed to cover firms and individuals against claims for injury, damage or loss caused by professional incompetence or negligence
It is mandatory for all surveyors working in practice

20
Q

What RICS guidance relates to handling client money?

A

RICS Professional Standard: Client Money Handling, 1st Edition, effective from Jan 2020

21
Q

What are the six main areas of good practice set out in the RICS Professional Standard ‘Client Money Handling’ 1st Edition 2019?

A
  1. Holding Client Money
  2. Providing Information to Clients
  3. Receipts of Client Money
  4. Payments from Client Accounts
  5. Accounting Records and Controls
  6. Compliance
22
Q

Tell me about some of the things you must do when starting a new practice, to deliver on RICS compliance.

A
  1. Inform RICS of your new practice by completing a Firm Detail Form
  2. Appoint a Responsible Principal for all RICS communication
  3. Register with RICS for regulation of the firm by the Regulatory Board
  4. Set up procedures for the requirements for Client Money Handling, including a Protection Scheme
23
Q

What bribery legislation are you aware of?

A
  • UK Bribery Act 2010
  • Proceeds of Crime Act 2002
24
Q

What is a bribe?

A

A bribe can be the giving, offering, promising or receiving of an advantage such as a payment, gift or a service for an action which is illegal or a breach of trust

25
Q

What do you understand about the Bribery Act 2010?

A

It makes it an offence for a UK company or person to pay or receive a bribe, either directly or indirectly.
It covers transactions that take place in the UK or abroad, and both in the public and private sectors.

26
Q

What are the 6 principles that the Bribery Act 2010 is based on?

A
  1. Proportionality
  2. Top level commitment
  3. Risk assessment
  4. Due diligence
  5. Communication
  6. Monitoring and review
27
Q

What are the 4 offences under the Bribery Act 2010?

A
  1. Bribing
  2. Receiving a bribe
  3. Bribing a foreign public official
  4. Failing to prevent bribery
28
Q

What are the penalties for accepting a bribe?

A

If the Act is breached, there is a maximum penalty of imprisonment for up to 10 years (individuals) and/or unlimited fine (individuals and firms)

29
Q

What is your employer’s gifts policy?

A

Employees must not give or accept gifts or favours of any kind unless in exceptional circumstances without the prior written consent of a director

Any gifts, hospitality, expenditure (whether accepted or not) must be recorded on the register, which will be reported in the Board report

Christmas gifts should be logged then fairly distributed amongst staff

30
Q

What is PII

A

Professional Indemnity Insurance
Protects clients, surveyors and third parties against negligence claims when there is a duty of care breached and a claim for damages arises.

31
Q

What are the RICS requirements in relation to PII?

A

Professional Indemnity Requirements Version 9 (April 22)
Current minimum requirements if the Firms turnover is:
- £100k or less - £250k minimum PII for each and every claim
- £100,001 - £200k - £500k “
- £200,011 & above - £1m “

32
Q

What is a PII aggregation clause?

A

A clause that allows or requires a number of, usually, similar or linked claims to be treated as a single claim

33
Q

Is a PII excess usually paid for per claim?

A

Excess in PI is a way to reduce the cost of the insurance premium. The excess is the amount that the policyholder must pay out of pocket before the insurance company will cover any claims.
RICS max level of uninsured excess is:
Firms turnover up to £10m = greater of 2.5% of the sum insured or £10k
Firms turnover over £10m = No set limit

34
Q

In a negligence claim what would help show that you acted with consideration and due process?

A

Good audit trail (recording notes and workings)
Evidence of the survey and details of the inputs
Communication - clear instruction from the client

35
Q

How long can a PII claim arise after the work is undertaken?

A

The starting point when considering the period within which a claim can be made is the Limitation Act 1980 and the Latent Damage Act 1986.
Contract - 6 years from the date of negligence or 3 years from the date of knowledge of damage subject to the 15 years long stop from the negligent act.
Tort - 6 years from date of the negligence

36
Q

Explain PII requirements relating to fire safety cover and cyber cover

A

Fire safety coverage must also be provided as a minimum on an aggregate, defence cost inclusive basis

37
Q

What is the Assigned Risks Pool? (ARP)

A

It is for firms that are unable to obtain professional indemnity insurance (PII) in the insurance market.

38
Q

What do the rules of conduct say about Client money?

A

Rule 2 ?

39
Q

What is the RICS ethical decision tree

A

It is a flow chart in order to help people make ethical decisions

APC Revision (11 decks)

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