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ETHICS > ETHICS > Flashcards

ETHICS Flashcards

1
Q

Tell me about a time when you havent quite met one of the RICS Ethical standards

A

agreeing an extension with the client beyond that agreed in the TOE

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2
Q

What are the RICS bye laws

A

Set of laws which underpin

membership and registration
structure
conduct
contribution to funds
Accounts and audits

  1. Every member shall conduct himself in a manner benefitting membership of RICS
  2. Key principle is self regulation
  3. includes your private life
  4. avoid the offence of conduct unbefitting
  5. do not be complicit in others bad conduct
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3
Q

You are a business with no preceding turnover - how much cover do you take

A

estimated base figure on estimated turnover

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4
Q

why are rules for regulation important

A

provides a gold standard of quality control for clients

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5
Q

Name the statutory compliance with starting a new practice

A
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6
Q

what is the RICS guidance note for indemnity insurance

A

Risk, liability, and insurance 1st edition 2021 para 2.4.5

Professional indemnity insurance requirements version 9 2022

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7
Q

What is a liability cap

A

A Contractual agreement that a client can only claim damages up to the amount agreed even if law would otherwise award a greater sum

recommended by the RICS

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8
Q

What is an insurance limit

A

a limit set out in the firms insurance policy and is fixed on the annual PII renewal. i.e. the maximum amount insurers will pay in any particular claim

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9
Q

What constitutes as a reasonable liability cap

A

based on:

the level of risk in the engagement

the level of fees

the limit on the PII policy

The potential liability that might be incurred without a cap

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10
Q

What is EWS1 insurance scheme

A

a state backed insurance scheme intended to give EWS1 assessors insurance to conduct proportionate ews1 surveys

Rus for 5 years from 26th September 2022

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11
Q

What is the minimum run off cover required and recommended by RICS

A

6 Years and £250,000 cover

RICS Recommends 15 years

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12
Q

what does the limitation act 1980 state

A

Tort can be claimed 6 years from the date the claimant suffered the loss

For contracts negligent acts or breaches can be claimed 6 years from negligent act

S14a - Alternative limitation period of 3 years from date of knowledge of the damage subject to a 15 year long stop from the negligent act

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13
Q

6 Principles of the Bribery Act 2010

A

Proportionality
top level commitment
risk assessment
due diligence
communication
monitoring and review

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14
Q

What is the RICS stance on bribery

A

Offering a client a reasonable and proportionate hospitality will not constitute as an offence in RICS eyes as long as it is accurately recorded in a gifts register e.g sporting tickets or meal

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15
Q

What is the VOA Stance

A

Do not accept any gifts - be polite but firm refusal

be above reproach in everything you do

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16
Q

What if you are sent a gift without request

A

Return and record

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17
Q

When must you report and record declining a gift

A

over £25

and or each repeated offer

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18
Q

what is Fifth Money Laundering Directive and when is it effective from

A

effective 10th Jan 2020

Implemented by the money laundering and terrorist financing regulations 2019

guidance on enhanced customer due diligence - identity, documentation and purpose

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19
Q

What is the practice statement regarding money laundering

A

Countering bribery and corruption, Money laundering and terrorist financing 1st sept 2019

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20
Q

What is the Mission Statement of the 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 environment through professional expertise.
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21
Q

When was the RICS founded?

A
  • It was founded in 1868.
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22
Q

How is the RICS Structured?

A

The RICS was founded in 1868 with the Royal Charter being granted by the Privy Council in1881.

  • The RICS is self-regulated and internally monitored meaning that it is not regulated by the Government
    or external parties.
  • The Bye-Laws determine how the RICS is regulated.
  • The Governing council manage and agree the strategy for the RICS.
  • The Regulatory board, audit committee and management board are beneath the governing council and
    execute the strategy set by them.

PRIVY COUNCIL
GOVERNING COUNCIL
STANDARDS AND REGS BOARD ,MANAGEMENT BOARD, AUDIT COMMITEE
FINANCE COMITEE, REMUNERATION COMITEE

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23
Q

What are the RICS’ 5 principles of better regulation?

A
  • Proportionality.
  • Accountability.
  • Consistency.
  • Targeting.
  • Transparency
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24
Q

What is the difference between RICS ethics and rules?

A
  • Ethics are a set of moral values.
  • Rules of conduct are a framework that we work to
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25
Q

How many Global Professional and Ethical standards are there?

A

Up until the 1st February 2022 there were 5 Global Professional & Ethical Standards.

  • From the 2nd February 2022 onwards the Global Professional & Ethical Standards have been
    consolidated within the New Rules of Conduct 2022.
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26
Q

When are the new rules of conduct effective from

A

02/02/2022

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27
Q

What are the New Rules of Conduct?

A
  • Rule 1. Members and firms must be honest, act with integrity and comply with their professional
    obligations, including obligations to RICS.
  • Rule 2. Members and firms must maintain their professional competence and ensure that services are
    provided by competent individuals who have the necessary expertise.
  • Rule 3. Members and firms must provide good-quality and diligent service.
  • Rule 4. Members and firms must treat others with respect and encourage diversity and inclusion.
  • 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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28
Q

Why did the previous Rules of Conduct change?

A
  • The previous rules had been in place since 2007.
  • Following research and consultation with RICS Members, Firms and Members of the public, the
    majority voted in favour of replacing the existing Rules of Conduct and separate Global Professional
    and Ethical Standards.
  • This was to provide a single document to enable greater clarity for RICS members and firms.
  • I also understand there is now a greater focus on clearer example behaviors, understanding evolving
    technology and tackling climate change.
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29
Q

Talk us through your understanding of the Rules of Conduct changes?

A
  • The Rules of Conduct October 2021 Global Practice Statement will overhaul the previous separate documents:

Rules of conduct for Members.
Rules of Conduct for Firms.
Global Professional and Ethical Standards.

  • Appendix A of the Rules of Conduct now contains the professional obligations of Members and
    Firms.
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30
Q

What are the professional obligations of members?

A
  1. Members must comply with the CPD requirements set by the RICS which requires 20 hours of
    CPD for each calendar year, 10 hours of which must be formal CPD.
  2. Members must cooperate with RICS.
  3. Members must promptly provide all information reasonably requested by the Standards and
    Regulation Board, or those exercising delegated authority on its behalf.
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31
Q

What are the professional obligations of firms?

A
    1. Firms must publish a complaints-handling procedure, which includes an alternative dispute
      resolution provider approved by RICS, and maintain a complaints log.
    1. 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.
    1. 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.
    1. Firms must cooperate with RICS.
    1. Firms must promptly provide all information reasonably requested by the Standards and Regulation
      Board, or those exercising delegated authority on its behalf.
    1. 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.
    1. Firms must report to RICS any matter that they are required to report under the Rules for the
      Registration of Firms.
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32
Q

Why does the 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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33
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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34
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.
35
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.
36
Q

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

A
  • Fixed penalty.
  • Consent order.
  • Disciplinary panel.
37
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.
38
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.
39
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
40
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.
41
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.
42
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.
43
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.
  • It includes:-

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.

44
Q

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

A

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.

45
Q

What are the different types of client money accounts?

A
  • General accounts that hold money for more than one client.
  • Discrete accounts reference a single named client.
46
Q

What is meant by the term Negligence?

A
  • Negligence is a failure to provide the duty of care that is owed to the client.
47
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.
48
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.
49
Q

What must a complaints handling procedure include?

A
  • The process must include a redress mechanism
  • It must be clear, quick, transparent and impartial and free of charge within the first stage.
  • 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.

  • The complaint must be investigated within 28 days.
  • We must note the need to advise PI insurers of a complaint immediately.
  • All complaints, their progress and outcomes must be recorded.
50
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.
51
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.
52
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.
53
Q

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

A
  • For the purpose of dual authorisation
54
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.
55
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.
56
Q

What sorts of activities are included?

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.
57
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.

Tribunal decisions

  • 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.
58
Q

What recent article have you read from the RICS?

A

…

59
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.
60
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.
61
Q

What does PII stand for?

A
  • Professional Indemnity Insurance.
62
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.
63
Q

What benefits does it 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
64
Q

What benefits does it provide for the client?

A
  • They are able to recover their financial losses.
65
Q

On what basis is it underwritten in the UK?

A
  • On a claims made basis.
66
Q

What does this mean?

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.
67
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.
68
Q

What are the minimum levels of indemnity and Maximum levels of
uninsured excess?

A
69
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.
70
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
71
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.
72
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.
73
Q

What are the main elements included within a fee proposal?

A
  • Terms and conditions.
  • Scope of services.
  • Exclusions.
  • Assumptions.
74
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.
75
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
76
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.
77
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.
78
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.
79
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
80
Q

What are the Main Principles of the Bribery Act? - Offences/who applies to and 6 principles

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
  • The legislation applies to all UK Entities and includes associated Persons for example sub-consultants
    and external advisors.
  • 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.
81
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.
82
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.
83
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.
84
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.

ETHICS (5 decks)

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