Ethics Flashcards
What is the mission statement of the RICS?
- To qualify and equip members to offer the highest standard of service
- To promote and enforce standards
- To lead solutions to challenges facing the built environment through professional service
When was the RICS founded?
1868
What are the RICS 5 principles of better regulation?
- Proportionability
- Accountability
- Consistency
- Targeting
- Transparency
What is the difference between RICS rules and ethics?
- Ethics are a set of moral values
- Rules of Conduct are the framework that one must work to
What is negligence?
Failure to provide a duty of care a client is owed
What is the Merit v Babb case law?
- A surveyor was sued for negligence by a former client
- As the firm did not have run off cover the individual was sued for damages
What is the limitation period for underhand contracts?
- 6 years for underhand
- 12 years for a deed
What are the different types of money account?
- General accounts hold money for more than one client
- Discrete accounts reference a single named client
What should a complaints handling procedure include?
- The RICS provide a model form
- The process should contain a redress mechanism
- The details of the policy should be issued to the client
- It must be quick, clear, transparent and free in it’s first stage
- Name and contact details of the nominated person must be stated
- The complaint, the progress and the outcome must be recorded
- The complaint must be investigated within 28 days
- The complaint must be notified to the PI insurer immediately
- If not resolved the complaint must be referred to a third party
What is a redress mechanism?
- A scheme designed to handle small issues that would be disproportionately expensive to go to court
- If the scheme judges in favour of the complaint it is binding
- RICS firms must specify which scheme they want to use e.g. ombudsman or adjudication
What would you do if you received a complaint?
- I would acknowledge the complaint
- I would would forward it to my complaints handler in line with our complaints handling procedure
- I would stress the importance of notifying the professional indemnity insurer immediately
What are the Continuous Professional Development requirements?
- Members must undertake and record appropriate life long learning
- Members must provide evidence if requested by the RICS
What is your CPD strategy?
I meet with my manager twice a year to discuss plan my career development plan
What is the clients money protection scheme?
- A money protection scheme operated by the RICS
- It contains a provision for any member of the public to be reimbursed their direct loss of funds when using an RICS regulated Firm
- Provided through the RICS insurance policy
What are the professional obligations of firms?
- Firms must publish a complaints handling procedure, which includes a ADR provider approved by the RICS and maintain a complaints log
- Firms must ensure that all previous and current work is covered by adequate PI cover that meets RICS standards
- Firms with a sole principal must make appropriate arrangements for their professional work to continue in the event of incapacity, death, absence or inability to work
- Firms must cooperate with the RICS
- Firms must provide all information reasonably requested by the standards and regulations board
- Firms must display on their literature, in accordance with the RICS policy for designations, to denote that they are regulated by the RICS
- Firms must report any matter that they are to report under the rules for the Registration of Firms
What are the professional obligations of members?
- Members must complete 20 hours of CPD per year (10 formal, 10 informal)
- Members must cooperate with the RICS
- Members must provide all information reasonably requested by the standards and regulation board
What were the changes to the Rules of Conduct?
Previously there were separate documents for:
- Rules of Conduct for members
- Rules of Conduct for firms
- Global Professional and Ethical Standards
Why did the previous Rules of Conduct change?
- Previous rules had been in place since 2007
- Following research, the majority of members, firms and the public voted in favour of replacing the existing Rules of Conduct and Global Professional and Ethical Standards-
- This provided a single document with greater clarity for members and firms
What procedures must you follow if starting up a firm?
- Contact the RICS for guidance and start up pack
- Inform the RICS and register for regulation
- Appoint a contact officer for all RICS communication
- Prepare a complaints handling procedure
- Obtain PI insurance cover
- Abide by the RICS Rules of Conduct
- Use designated ‘Regulated by the RICS’ on all practice material
What insurances would you need when starting up a firm?
- Professional Indemnity
- Employers Liability
- Public Liability
- Building Insurance for office premises
What information do firms have to send to the RICS annually?
An annual return, which is completed online
- Type of business
- Staffing
- Nature of clients
- Training provision
- Complaints handling details and records
- PI insurance
- Whether the firm handles clients money
Why does the RICS have Rules of Conduct?
To provide a framework to work to and so clients know they are getting a set level of service
What would you do if you faced an ethical issue you weren’t sure of?
I’d refer to the RICS ethical decisions tree
What is the procedure if the Rules of Conduct are breached?
- A formal investigation is held by the Head of Regulation
- The RICS can request information and/or visit and inspect to investigate
- Members must cooperate with all enquiries
How can disciplinary proceedings be triggered?
- Someone complaining to the RICS
- An allegation by a client or third party
- Information received or established by the RICS
What actions can be imposed at the end of an investigation?
- Fixed penalty
- Consent Order
- Disciplinary Panel
What are Consent Orders?
- A written agreement between the RICS and a member/firm concerning a disciplinary issue on a breach of the RICS rules
- It requires corrective action, or restrain certain actions for a specified period of time and may require a fine to be paid
When is a disciplinary panel applicable
- Used for more serious breaches of conduct
- The panel is usually held in public
- A balance of probabilities approach is taken
What sort of breaches would expulsion be suitable for?
- Gross, persistent or wilful failure to comply with the code of conduct
- Fraud, dishonesty, conviction of a serious criminal offence, gross incompetence, deliberate discrimination, miss appropriation of the clients money
RICS regulated firms that operate a client account must:
- Set clear segregation of duties for employees
- A principle 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 kept secure
- Client money must be kept in separate and clearly identifiable accounts, with the word ‘client’ in the account name
- Clients must always have access to funds
- We must agree the terms and advise the client on the bank
-The account must not be overdrawn - We must maintain client ledgers and provide a running balance
What are the New Rules of Conduct 2022?
Rule 1: Members and firms must act with honesty and integrity and comply with their obligations, including obligations to the RICS
Rule 2: Members and firms must maintain their professional competence and ensure services are provided by competent individuals who have necessary expertise
Rules 3: Members and firms must provide a 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
Explain your understanding of the RICS governance
The RICS is governed through Constitutional documents including:
- The Royal Charter
- Bye-Laws
- Regulations
- Standing orders
What is the Royal Charter?
- It is granted by the monarchy and advised on by the privy council
- Defines objectives and constitution
- Enables the RICS to govern it’s own affairs
Explain your knowledge of the RICS structure
- Privy Council: Changes to the Royal Charter and Bye-Laws have to be approved by them
- Governing Council: Sets the RICS strategy and vision, can approve changes to the Regulations and Standing Orders
- RICS Board: Delivers the RICS business plan
- Standards and Regulations Board: Regulates the Constitutional documents
- Regulatory Tribunal: Independently led, determines regulatory cases, kept at arms length from the rest of the structure to be a fair decision making body
What are the RICS Bye-Laws
- Applications and Definitions
- Registration and Membership
- Designations
- Contribution of funds
- Conduct
- Governing Council, Officers and Staff
- Subsidiary Boards, Committees and Groups
- Procedure for General Meetings
- Accounts and Audit
- General
What are Standing Orders?
- Governance for Bye-Law 6: Governing Council, Officers and Staff
- Describes the process for electing RICS officers and governing council, emergency decisions and conduct at meetings
Name some of the RICS Professional Groups
- Quantity Surveying and Construction
- Building Surveying
- Project Management
Are you aware of the RICS leadership team?
- Tina Paillet FRICS - RICS President
- Justin Sullivan FRICS - President Elect
- Nicholas Mclean FRICS - Senior Vice President
What are the general requirements for PII?
- Policy must be on an each and every claims basis
- Must be inline with the minimum levels of indemnity and maximum levels of uninsured excess
- Run off cover must be in place
- Must be fully retro active
- Policy should cover past and present employees, directors and partners
What are the RICS minimum levels of indemnity cover?
- Turnover less than 100k: £250,000
- Turnover between 100k-200k: £500,000
- Turnover over 200k: £1,000,000
What are the maximum levels of uninsured excess?
- Turnover less than £10,000,000: The greater of 10% of the sum insured or 10k
- Turnover over £10,000,000: No set limit
What is the difference between Professional Standards and Practice information?
Following the Bichard Review, the RICS have introduced new definitions for professional guidance
- Professional Standards: set requirements and expectations for RICS members and firms - focuses on baseline expectations for competence and mandatory requirements
- Practice Information: sets out supporting guidance to advise surveyors in delivering specific services or specific areas of practice
What are the RICS ethical standards?
- Honesty
- Integrity
- Competence
- Service
- Respect
- Responsibility
What forms of conflict of interest are there?
- Party Conflict: acting on both sides of a transaction
- Own interest conflict: relating to a personal interest
- Confidential Information: relating to work between two parties which is confidential
What is money laundering?
The process of illegally concealing the origin of money
What is a conflict of interest?
Is where someone in a position of trust has competing personal or professional interests making it difficult to fulfil their duties impartially
What is the Bribery Act?
Makes it an offence to:
- Offer a bribe
- Receive a bribe
- Bribery of a foreign public official
- Failure of a cooperate entity to prevent a bribe on their behalf
There are 6 principles of prevention
- Propitiate procedures
- Top level commitment
- Risk assessments
- Due diligence
- Communication
- Monitoring an review
Who polices the Bribery Act?
The Serious Fraud Office
What is your understanding of your duties to stop Money Laundering?
In accordance with the Rules of Conduct – RICS members and firms must not facilitate any financial crime including money laundering, bribery or corruption.
- I would follow the RICS professional statement on countering bribery and corruption, money laundering and terrorist financing.
- This requires all RICS regulated firms to have a written policy addressing money laundering that covers the identification of politically exposed persons and potential breaches and sanctions.
Who is the RICS CEO?
Justin Young
Tell me how you have applied the rules of conduct within your experience
- The Project Manager asked the apprentice to undertake the pricing of a CE for the Client. I advised the Project Manager that the apprentice had no experience in this and that I would undertake the pricing and get the apprentice to assist so he could learn - RoC 2
How can you avoid PI claims?
- Keep detailed records of meeting and conversations
- Record advice that has been provided
- Use formal letters of engagement
- Don’t advise on specialism outside field of experience.
- Use RICS guidelines
Why didn’t you accept tickets to the Football when offered by a contractor?
- I didn’t feel it was appropriate, it is against company policy and it could be considered a bribe
- VFL prohibits receiving business gifts, particularly when it could influence business situations
What is bribery?
The act of offering or promising an advantage directly or indirectly in order for another party to act improperly.
If a client said you were negligent, what would you do?
- I would ask why they thought this
- Notify my Senior Management
- Seek legal advice
What happens if you don’t follow CPD requirements?
- First breach is a caution
- Second breach within a 10 year period is a fixed penalty and your name is published on the website
- Third breach is referred to disciplinary panel and will likely result in expulsion
What is duty of care?
A duty of care is ensuring that another party does not suffer unreasonable harm or loss
What is a Deontologists view on ethics?
They base their theory on rules as applied to actions. For example, an action could be wrong even if it has good consequences.
What is a consequentialists view on ethics?
They do not think it is necessary to stick to principles if that is costly in terms of outcomes. For example, it is okay to lie or break a promise for the sake of good consequences.
Give an example of when you have applied the first rule of Conduct?
I ensure I always act in a professional manner and do not allow myself to be influenced improperly
Give an example of when you have applied the second rule of Conduct?
- I ensure that I carry out training and private learning to ensure I continuously develop
- I supervise junior surveyors to ensure the accuracy of their work
Give an example of when you have applied the third rule of conduct?
- I ensure that I communicate effectively with Clients
- I keep detailed records to demonstrate to the Client how I have reached a decision
Give an example of when you have applied the fourth rule of Conduct?
I treat everyone fairly and do not discriminate
Give an example of when you have applied the fifth rule of Conduct?
I do not proceed with actions that I believe are not right
Why is it a requirement for RICS professionals to adhere to Ethical Standards?
It creates trust in the profession and so clients know they are getting a set level of service
Tell me how you used two of the RICS Rules of Conduct within your case study?
- I applied the 3rd Rule of Conduct on Brent Cross by ensuring I followed the Subcontract so I was providing a good quality a diligent service.
- On Old Oak Common, I ensured I treated the Subcontractor with respect in trying to resolve the issue.
What is the purpose of the RICS Bye-Laws
They provide the power for Head of Regulation and Regulatory Tribunal to make disciplinary and regulatory decisions including issuing disciplinary penalties and costs
