Ethics Flashcards
RICS stands for?
Royal institution of Chartered Surveyors
New Rules of Conduct (WEF 2 Feb. 2022)
- A simpler structure - easier for RICS members and firms to understand our rules, providing more confidence for clients and the public
- Clear examples
5 ethical standards
- Members and firms must be honest, act with integrity and comply with their professional obligations and obligations to RICS
- Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise
- Members and firms must Provide good-quality and diligent service
- Members and firms must Treat others with respect and encourage diversity and inclusion
- 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
9 protected characteristics protected under Equality Act 2010
- Gender reassignment
- Sex
- Sexual orientation
- Age
- Disability
- Race
- Religion or belief
- Marriage and partnership
- Pregnancy and maternity
What are the 4 types of discrimination
- Direct -treated less favourably than others
- Indirect - having rules that apply to allbut put those with a protected characteric at an unfair disadvantage
- Harassment -being treated in a way that violates your dignity.
- Victimisation - Treated unfairly after raising a complaint about discrimination or harassment
When was RICS founded and who is the current president
Found 1868 with RICS Royal Charter granted 1881
3 market sectors covered by RICS
1.Land
2. Property
3. Construction
What is a conflict of interest
Arises when a members independence / impartiality is threatened due to existence of conflict between clients
Types of Conflict
- Party Conflict
- Own Interest Conflict
- Confidential Information Conflict
Managing conflict of interest (COI)
- Conflict Avoidance - do not accept instruction
- Conflict Management - set up procedure agreed in informed consent (information barrier
- Written Advice to Both Parties
a. Disclose nature of conflict and set our how firm wishes to deal with conflict (information barrier)
b. Be clear – ensure parties make own decision (suggest independent advice)
c. Request written informed consent to act in accordance with procedure proposed
Definition of RICS Assigned Risk Pool
insurance available at cost for members who cannot arrange cover
Can remain in for 3 years until they can acquire formal cover
Definition of Run Off Cover
Required following the cessation of trading
* Consumer claims - minimum cover of £1,000,000 over minimum of 6 years
* Commercial claims – firms must decide cover, minimum of 6 years
* Firms unable to obtain run-off cover, can apply for RICS Run-off Pool
Levels of Professional Indemnity Insurance (PII) needed
Firms Turnover £100,000 or less = £250,000 minimum PII
£100,001-£200,000 = £500,000
OVER £200,000 = £1,000,000
What is Professional Indemnity Insurance (PII)
To protect clients, surveyors and third parties against negligence claims where a duty of care breached and a claim for damages rises
What is a Locum
Another professional who is appointed to ‘stand in’ for the surveyor/sole practinioner if they are unable to work eg incapacity or death
What is a Chinese wall/information barrier
An information barrier- requires physical or electronic separation of individuals within the same firm which prevents confidential information from being passed between them
What are the 5 RICS principles of better regulation
1.Proportionality
2. Transparency
3. Accountability
4. Targeting
5. Consistency
What are the professional obligations for members (3) also referred to as core professional obligations
- Members must comply with CPD requirements- 20 hrs once qualified annually 10 must be formal
- Members must cooperate with RICS
- Members must promptly provide all information reasonably requested by the Standards and
Regulation Board, or those exercising delegated authority on its behalf.
What are the professional obligations of RICS regulated firms? (7)
- Firms must publish a complaints-handling procedure, which includes an alternative dispute
resolution provider approved by RICS, and maintain a complaints log.
• 2. Firms must ensure that all previous and current professional work is covered by adequate and
appropriate professional indemnity cover that meets the standards approved by RICS.
• 3. Firms with a sole principal must make appropriate arrangements for their professional work to
continue in the event of their incapacity, death, absence from or inability to work.
• 4. Firms must cooperate with RICS.
• 5. Firms must promptly provide all information reasonably requested by the Standards and Regulation
Board, or those exercising delegated authority on its behalf.
• 6. Firms must display on their business literature, in accordance with RICS’ published policy on
designations, a designation to denote that they are regulated by RICS.
• 7. Firms must report to RICS any matter that they are required to report under the Rules for the
Registration of Firms.
Why do RICS have Rules of Conduct?
• 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.
What is a bribe
An offer to induce an action which is illegal, unethical or a breach of trust
What legislation related to bribery
The Bribery Act 2010
What are the 4 offences under the Bribery Act 2010
- To offer a bribe
- To request or accept a bribe
- To bribe a foreign public official
4 . Failure to prevent a bribe
What are the six fundamental principles of the Bribery Act 2010
- Proportionality
- Top level commitment
- Risk Assessment
- Due diligence
- Communication
- Monitoring and review
What are some potential penalties under the bribery act 2010?
They can include up to 10 years imprisonment or an unlimited fine for individuals
For firms they may also have an unlimited fine and directors can be disqualified
What are some potential penalties under the bribery act 2010?
They can include up to 10 years imprisonment or an unlimited fine for individuals
For firms they may also hsve an unlimited fine and directors can be disqualified
What does the Professional ethical practice by RICS members and firms do
- provides a foundation for effective markets
- pioneers better places to live and work
- is a force for positive social impact
List the ethical principles that The RICS Rules of Conduct are based on
- Honesty
- Integrity
- Competence
- Service
- Respect
- Responsibility
Who do the rules of conduct apply to and where is this found
bye law
The Rules of Conduct apply to all members and firms regulated by RICS
Bye-Law 5.1
Example of Rule 2
Members and firms only undertake work that they have the knowledge, skills, and resources to carry out competently - I was ssigned a challenge case involving an agricultural property, I am not trained in this area so seeked assistance
Example of Rule 1
Members and firms do not allow themselves to be influenced improperly by others (as a result of, for example, giving or receiving work referrals, gifts, hospitality, or payments) or by their own self-interest - I didn’t allow myself to be persuaded to change the result of a challenge
Example of Rule 5
Members and firms take appropriate action when they consider that the rules have been breached, and report suspected significant breaches of the Rules of Conduct by themselves or others to RICS.
Example of Rule 4
Members and firms develop an inclusive culture in their workplaces, support equal access and opportunity for all, and identify and address unconscious bias.
Example of rule 3
Members and firms undertake their work in a timely manner and with due care, skill, and diligence, and in accordance with RICS technical standards. - I ensure I meet deadlines
What are principles
generally set aspirational standards on conduct. They often come from our internal self-motivation. For example honesty, charity, or kindness
Benefits of having a Code of Ethics
- Guide ethical/professional behaviour
- Ensure consistency in decision making
- Set levels of professional expectation
- Help to promote trust from the public
- Help to promote confidence in decisions/behaviour from stakeholders
- Provides a justification for a particular course of action
- Provide protection in alleged cases of misconduct
- Serve as a point of reference in disciplinary proceedings
- Ensure that decisions are unbiased/not overly subjective
- Sets professional standards for all across the board
- Promotes an ethical culture/ethos within the profession
What is the Social contract theory/license to operate?
The social contract or license to operate is a hypothetical agreement with the community on a set of ethical standards, which might include integrity.
What is Virtue Ethics
The initiative is aimed at improving the character of the employees – that is, instilling virtues in them.
What is the Consequentialism theory?
Reason for inputting ethics code rests on the consequences
What is the Deontology theory?
based on a specific duty directed towards a particular group of people
Conflict of Interest types
What is a Party Conflict
A situation in which the duty of an RICS member (working independently or within a non-regulated firm or within a regulated firm) or a regulated firm to act in the interests of a client or other party in a professional assignment conflicts with a duty owed to another client or party in relation to the same or a related professional assignment.
Conflicting interests of 2 parties member/firms work for
COI
What is a Own interest conflict?
A situation in which the duty of an RICS member (working independently or within a non-regulated firm or within a regulated firm) or a regulated firm to act in the interests of a client in a professional assignment conflicts with the interests of that same RICS member/firm (or in the case of a regulated firm, the interests of any of the individuals within that regulated firm who are involved directly or indirectly in that or any related professional assignment).
Own interests are at stake
What is a Confidential information conflict?
A conflict between the duty of an RICS member (working independently or within a non-regulated firm or within a regulated firm) under paragraph 2.2 to provide material information to one client, and the duty of that RICS member (working independently or within a non-regulated firm) or of a regulated firm under paragraph 2.1 to another client to keep that same information confidential.
- simplified = conflicted if you are obliged to keep certain information confidential for one party but obliged to reveal the same information to another party.
What is required to managed a conflict of interest?
- Discuss matter with colleagues and clients.
- Do both parties gain something by haing your firm work for them eg if the company is an expert in the field then it may be allowed
- MOST IMPORTANT -> Written informed consent
Who might need more information in regards to written consent
small business or individual person who rarely employs professionals may require greater detail to understand the position opposed to a large corportation
If they can’t understand the risks we should recomend they seek independant advice
What conditions MUST be satisfied before you may act despite a conflict of interest?
- All clients will gain if you act
- Clients have given informed consent
- Acting will not look bad
- You will act objectively and diligently for each client
- Acting is lawful
If you decide to act the situation must be kept under review as it may change or new info arise, keep good records
What is Whilstleblowing?
Whistleblowing occurs when an employee or former employee [or someone connected to the organisation] conveys information about a significant moral problem to someone in a position to take action on the problem and does so outside approved organisational channels.
What should be consdiered when whistle blowing?
Usually, try the normal internal channels first
Think about how people will feel. Avoid making it personal.
Keep a record of your concerns and the incidents that prompted them.
Talk to your professional body (e.g. RICS)
What is the Civil Service Code (core values)
- Integrity
- Honesty
- Objectivity
- Impartiality
Can you ever accept an instruction when there’s a conflict of interest?
Depends on the scenario. If all parties are happy to proceed and made aware of the conflict, and it doesn’t stop good quality service and advice being given, and it’s not illegal or unethical to do so, then you can accept it.
What are the RICS Rules of Conduct?
Rules that members and firms must follow to achieve the highest level of ethical standards within surveying.
Would you accept a dinner offer from your client?
No I wouldn’t.
Why wouldn’t you accept a dinner offer from your client?
My current employer rules don’t allow me to do this, but even if working for another firm or for myself, accepting the offer of dinner could be misconstrued and offer doubt about my impartiality. To avoid this scenario, I would politely decline.
What is the RICS’s guidance in relation to gifts and hospitality?
RICS state to never accept gifts or hospitality from a 3rd party supplier or contractor, and that certain types of lavish corporate entertainment could be classified as bribery. Offering or being offered reasonable and proportionate hospitality such as a meal or sporting tickets will not constitute an offence in RICS eyes as long as this is accurately recorded in a gifts and hospitality register.
What is the VOA’s guidance in relation to gifts and hospitality?
Polite but firm refusal. VOA employees are only permitted to accept gifts/hospitality of a trivial nature such as food/drink at a public setting where it’s available to other attendees, likewise with certain gifts such as pens or calendars, but these items have to be declared within our internal gifts and hospitality register.
What is not prohibited by the bribery act?
Gifts and Hospitality
What is the RICS Decision Tree?
This is a diagram for members and firms to follow when in a difficult situation and unsure on what steps to take. The diagram will help advise on what steps to take.
What do you do in the event of being offered gifts and hospitality?
I would have regard to my employers policy as well as relevant RICS guidance.
What do you do in the event of being offered a bribe?
Report this immediately to my line manager.
What must members ensure they know about bribery and corruption?
They must not directly or indirectly offer or accept a bribe.
Have adequate knowledge of bribery and corruption.
Must immediately report activity of any bribery and corruption.
Is there any RICS guidance in relation to bribery?
Yes, a Professional Statement called “Countering bribery, corruption, money laundering and terrorist financing.” 1st edition February 2019
Can you name any other legislation related to the bribery act?
Money Laundering Regulations 2019
Proceeds of Crime Act 2000
Terrorism Act 2000
What are some steps you could take to identify money laundering?
Stringent ID checks
Don’t accept large cash payments over €10,000
Appoint a money laundering officer
Keep up to date records
Perform AML checks on clients
Provide training for employees on money laundering
What are some of the penalties for money laundering?
If found to have assisted in money laundering then unlimited fines or up to 14 years in prison.
If found to have tipped off about an investigation then 5 years in prison.
What is customer due diligence?
This involves collecting evidence to verify the identity of different types of clients when assessing risks to your business.
There is both simplified and enhanced due diligence.
What is client money?
Any money held and received by a firm which doesn’t solely belong to it.
Can you give some examples of when you would be required to handle clients money?
Tenants deposits
Fee money taken in advance
Clients money held but due to be paid to contractors
Service charges
Are you aware of any RICS guidance for handling client money?
Yes, the RICS professional standard: Client money handling (1st edition, October 2019)
How should you handle clients money?
Hold it in a separate named account
Must be able to identify the client
Don’t go overdrawn
Client can request the money at anytime and it must be returned in a reasonable timeframe.
How do you manage conflict of interests?
I would have regard to:
- Whether my organisation is currently acting or has acted previously for a property for another client
- Continuous communication between people involved to identify conflicts
- Notify if unsure
- Seek advice available from senior staff
What is the three step process for managing conflicts of interest?
- Conflict identification
- Then either:
- Conflict avoidance (irresolvable conflict)
- OR Conflict management (Informed consent route, information barrier/Chinese wall, or a different person works on the case)
What is informed consent in relation to conflicts of interest?
This is where consent is sought between parties where a conflict of interest has been identified and is:
- In the interests of all those who are or may be affected
- Not prohibited by law
- The conflict won’t prevent the provision of competent and diligent advice to those that may be affected
How must an information barrier or Chinese wall be enacted for it to be successful?
Must be an established part of a firm’s culture and:
- Must be robust enough so that no information passes through
- Individuals acting for conflicting clients must be different
- Physical separation (different part of building or different building)
- Barrier must be actively monitored by a third staff member not involved with cases
What is professional indemnity insurance (PII)?
Insurance that allows an RICS member or firm to have financial liability protection from a negligence claim, whilst also protecting the firm’s clients from financial loss that the firm can’t meet.
Is there any RICS publications about professional indemnity insurance (PII)?
Yes - Professional indemnity insurance requirements, 2022
What are the minimum levels of indemnity linked to?
A firm’s turnover
Can you tell me about the minimum levels of indemnity insurance?
If a firm’s turnover is £100,000 or less, then the minimum level of indemnity insurance is £250,000.
If a firm’s turnover is between £100,001 and £200,000, then the minimum level of indemnity insurance is £500,000.
If a firm’s turnover is £200,001 or more then the minimum level of indemnity insurance is £1,000,000.
Can you tell me what the RICS assigned risk pool is?
This is an RICS scheme where a new firm which is unable to get PII cover elsewhere can enter this scheme to get PII cover.
How long can a firm stay in the RICS assigned risk pool for?
3 years
How long should run off cover last for?
A minimum period of 6 years, but RICS recommend up to 15 years
How long can a negligence claim be brought after the event?
Up to 15 years after the event.
What are some of the steps you would take when setting up your own firm?
Notify the RICS and ensure that the RICS logo is present
Ensure I’ve got adequate PII cover
Suitable complaints handling procedure
Client money handling procedures in place
Comply with statutory requirements (health and safety, employment legislation, data management)
Provide training for colleagues for CPD requirements.
What are some steps you would take when closing down a firm?
Inform the RICS
Inform clients, employees and other relevant stakeholders
Have suitable client money handling procedures in place to return this money
When are firms required to register for regulation by the RICS?
If the firm provides surveying services to the public
The firm is operating in regulated area A
At least 50% of the firm’s principals are RICS members
When are firms eligible to register for regulation by RICS?
The firm provides surveying services to the public
At least 25% of the firm’s principals are RICS members
What are some of the benefits of RICS regulation?
Globally recognised standards
Ethical and acting with honesty and integrity
Required skills and competencies to do the job
Safeguard client money
Transparency with conflicts of interest
Handle complaints and disputes fairly
Is there any RICS guidance for the registration of firms?
Rules for the Registration of Firms V6 effective 01 April 2020
What is the RICS motto?
Modus est rebus - there is a measure in all things
Is the RICS an institution or an institute?
Institution
Who is the current RICS President?
Nick Maclean is acting president. Previously Justin Sullivan who stepped down after his involvement as expert witness.
What is the RICS’s Royal Charter?
It means that RICS have a seat on the privy council that advise HM Government.
What does the Royal Charter entail that members must do?
Promote the surveying profession for the public benefit.
Are the RICS regulated or self regulatory?
Self regulatory as per the Royal Charter
What is the structure of the RICS?
At the top is the Privy Council, then immediately below is the Governing Council.
To the side of the Governing council is the Regulatory Tribunal which acts as an independent chair.
Below the Governing council is the standards and regulations board, management board and audit committee.
What are bye laws?
The enabling principles underpinning rules and regulations.
There are 10 of them.
What is a locum agreement?
These are arrangements that take place when a sole practitioner is incapacitated. Can be an RICS member or another suitably qualified professional such as a solicitor.
It covers aspects such as death, long term illness, long term holidays and unseen or unavoidable events.
Is there any guidance from RICS for complaints handling?
There is a guidance note on complaints handling published in July 2016
What is the RICS complaints handling procedure?
Procedure must be captured in Terms of Engagement.
Stage 1 is in house. Complaints handling procedure must be disclosed, complaints handling officer appointed who must investigate.
7 days for acknowledgement and substantive reply within further 21 days, and completed investigation at 28 days.
If unhappy with resolution of Stage 1 then it moves to Stage 2.
Stage 2 is ADR - third party resolution such as RICS dispute resolution service or Ombudsman services.
What is Alternative Dispute Resolution (ADR)?
This refers to methods used to resolving a dispute without going to court.
What are some types of alternative dispute resolution?
Arbitration
Adjudication
Mediation
Expert determination
Ombudsman
What happens if alternative dispute resolution is unsuccessful?
Then the dispute will go to Court (also known as litigation.)
What is the difference between a liability cap and a professional indemnity insurance cap?
Liability cap is the maximum amount you can be liable for in the event of negligence.
Professional indemnity insurance cap is the maximum amount an insurer will pay out.
What are the three strategic objectives of the Valuation Office Agency (VOA)?
Producing trusted property valuations efficiently, delivering an excellent customer experience, being a great place to work
What does producing trusted property valuations efficiently involve?
Ensuring the accuracy and reliability of property valuations and optimizing processes for efficiency
What is meant by delivering an excellent customer experience?
Providing clear, consistent, and professional service to customers, clients, and stakeholders
What is the focus of being a great place to work at the VOA?
Creating a positive and supportive environment for employees, fostering engagement and professional development
What is the core purpose of the VOA?
To be the public sector’s property valuation experts and advisors, providing valuations that support local taxation and benefits
What is the vision of the Valuation Office Agency (VOA)?
To be a world-leading provider of public sector valuations
What are the values of the VOA?
Professionalism, integrity, respect, innovation
Fill in the blank: The VOA’s core purpose is to provide valuations that support _______.
local taxation and benefits
True or False: One of the VOA’s strategic objectives is to be a great place to work.
True
What does the VOA aim to optimize in its property valuation processes?
Efficiency
List the values of the Valuation Office Agency (VOA).
- Professionalism
- Integrity
- Respect
- Innovation
What are the requirements of PII cover?
- Fully retroactive
- Underwritten by listed insurer
- Cover for past and present employees
- Have run off cover
- But appropriate and sufficient for the work
Maximum level of uninsured excess ( PII)
