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RICS - Mandatories > ETHICS > Flashcards

ETHICS Flashcards

1
Q

What is the meaning of the RICS Motto

A

“Est Modus in Rebus” means “there is measure in all things”

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2
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 environments through professional expertise
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3
Q

When was the RICS founded

A

It was founded in 1868

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4
Q

How is the RICS structured

A
  • The RICS was founded in 1868 with the Royal Charter being granted by the privy council in 1881
  • 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
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5
Q

What are the RICS;s 5 Principles for better Regulation

A
  • Proportionality
  • Accountability
  • Consistency
  • Targeting
  • Transparency
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6
Q

What is the difference between Ethics and Rules

A
  • Ethics are a set of moral values
  • Rules of conduct are a framework that we work to work to.
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7
Q

When did the Rules of Conduct Change

A

The new rules are effective from the 2nd February 2022

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8
Q

What is rule 1

A

Rule 1 - Members and Firms must be honest, act with integrity and comply with their professional obligations, including obligations to the RICS

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9
Q

What is Rule 2

A

Rule 2 ,- Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise

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10
Q

What is Rule 3

A

Rule 3 - Members and Firms must provide good quality and diligent service

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11
Q

What is Rule 4

A

Rule 4 - Members and Firms must treat others with respect and encourage diversity and inclusion

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12
Q

What is Rule 5

A

Rule 5 - Members and First 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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13
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 clarity for RICS members and Firms,
  • I also understand there is now a greater focus on clearer example behaviours, understanding evolving technology and tackling climate change.
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14
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 of which must be formal
2 - Members must co operate with RICS
3 - Members must prompt provide all information’s reasonably requested by the standards and regulations board, or those exercising delegated authority on its behalf.

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15
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 the 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 the 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 it behalf
6 - Firms must display on their business literature, in accordance with RICS’ published policy on designations, a designations to denote that they are regulated by the RICS
7 - Firms must report to RICS any matter that they are required to report under the Rules of registration of Firms

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16
Q

Why does the RICS have Rules of Conduct

A
  • To prove a framework that we can all work to and so the clients 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 members
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17
Q

Your Brother in Law is a chartered surveyor and you discover 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 commited be put in place.
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18
Q

In the case of a breach of a rule, what is the procedure?

A
  • Not every shortcoming will 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 the compliance.
  • Members must co operate fully all question enquiries
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19
Q

How can a disciplinary procedure be triggered?

A
  • Someone complaining to the RICS
  • An allegation by a client or third party
  • Information received or established by the RICS
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20
Q

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

A
  • Fixed penalty
  • Consent Order
  • Disciplinary Panel
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21
Q

What are fixed penalties

A

A fine by the RICS

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22
Q

What are Consent Orders

A
  • It is a written agreement between the RICS and a member or firm concerning a disciplinary issues 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.
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23
Q

When is a disciplinary panel applicable

A
  • They are used for more serious breaches of conduct
  • The panel will be usually held in public
  • The burden of proof is on the RICS
  • A balance of probabilities approach will be used
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24
Q

What sort of breaches would expulsion be suitable for?

A
  • Gross, persistent or willful failure to comply with an RICS rules of conduct
  • Fraud, dishonesty, conviction of a serious criminal offence, gross incompetence, deliberate discrimination, misappropriation of clients moneys
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25
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 the RICS” on all practice material
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26
Q

Would you advertise your 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

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27
Q

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

A
  • Professional Indemnity Insurance
  • Employers Liability Insurance
  • Public Liability Insurance
  • Buildings insurance
28
Q

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

A
  • It is called the annual return
  • failure to do so leads to a fixed penalty
  • it includes:

Type of business and staffing
nature of clients
training provision
complaints handling procedures, details and record
PI insurance details
Whether the firm holds clients money.

29
Q

What processes do regulated firms need to put in place when handling clients money?

A
  • Preserves the security of clients money which does not belong wholly to the company.
  • 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 secure
    – Client money must be kept separate and clearly identifiable with CLIENT in the bank account name
    – Clients must always have access to funds
30
Q

What are the different types of client money accounts?

A
  • General accounts hold money for more than one client
  • Discrete accounts hold money for just one client
31
Q

What is meant by the term negligence?

A
  • A duty of care is owed to all clients and 3rd parties using reasonable skill and care
  • If it is breached due to Negligence a claim may arise resulting in damages being paid or a professional indemnity claim
  • Negligence is the failure to provide a duty of care that is owed to the client
32
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 therefor the individual surveyor was pursued for damages successfully
  • This cause a big shock in the industry and highlight the need to ensure that run off cover is in place for all previous employees
33
Q

What limitation periods are associated with underhand and deed form of contract?

A
  • 6 years underhand
  • 12 Years under deed
34
Q

What must a complaints handling procedure include?

A
  • The RICS have a model form on this
  • The process must include a redress mechanism
  • details of the policy should be issued to the client with the terms of business
  • It must be clear, quick, transparent and impartial and free of charge within the first stage
  • The complaint must be investigation within 28 days
  • Names and contact details of the nominated investigating person must be stated
  • All complaints, their progress and outcomes must be provided
  • We must note the need to advise PI insurers of a complaint immediately
  • The process must have 2 stages as a minimum
    – Stage one is where there needs to be consideration of the complaint by a senior members of the firm or the complaints handling officer
    – Stage two 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
35
Q

What is an independent redress scheme

A
  • It is a consumer scheme designed to handle small issues that would be disproportionately expensive to take to court
  • If the scheme judges in favor of the complainant, it is binding,
  • If it judges in favor of the firm, the complainant can escalate the matter to court
  • RICS firms must specify which redress scheme they to use, it could be ombudsman, adjudication or arbitration
  • If the complain relates to a large amount of money or if the complainant wishes so, he can take the matter to court
36
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 out complaint handling procedure, providing additional information as required
  • I would also highlight the importance of informing our professional indemnity insurance providers immediately
37
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 of funds when using an RICS regulated firm
  • This is provided through an RICS insurance policy
38
Q

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

A

For the purpose of dual authorisation

39
Q

What are the continuous presession development Requirements

A
  • Members must undertake and record appropriate lifelong learning
  • On request members must show evidence of their CPD
40
Q

How many hours CPD must you do

A

20 hours (10 formal)
Ethics every 3 years
Recorded on ARC

41
Q

What activities count as CPD

A

It must have a learning objective,
Formal CPD can be formal seminars with certification
informal CPD can be youtube videos

42
Q

How would you tell if a CPD is formal or informal

A

Use the CPD decision tree

43
Q

What type of articles do you read

A

I read RICS journals (modus, Construction Journal, RICS regional magazine)

44
Q

What does PI stand for

A

Professional Indemnity insurance

45
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 duty ie neglect, errors or ommisions

46
Q

What benefits does it provide for the client

A

Peace of mind that they are able to recover their financial losses

47
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
48
Q

On what basis is it underwritten in the UK

A

On a claims made basis

49
Q

What does claims made basis mean

A

The insurance that is in place when the breach is discovered is responsible not the insurance at the time

50
Q

What are the requirements regarding PI set by the RICS

A
  • The policy must be an “each and every claim” basis
  • The RICS sets out minimum levels of cover
  • The RICS sets out minimum uninsured excess
  • Run off cover must be in place for 6 years
  • The policy should include cover for past and present employees, directors and partners
51
Q

What are the new RICS minimum levels of PI cover

A

0-100,000 - 250k cover
100,000 - 200,000 - 500k cover
200,000 above - 1 million cover

52
Q

What are the new RICS maximum levels or uninsured excess

A

10,000,000 or less - 10k or 2.5% whichever is greater
10,000,000 + - no limit

52
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 anything outside your competency
  • Use RICS guidelines
  • Avoid poor management
53
Q

If you made a mistake in your cost plan what would your insurance expect

A
  • for you to notify them and comply with any conditions and procedures set out in the insurance policy
54
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 clients requirements are performance based, this may imply fitess for purpose. It is advisable to request a clause limiting appointment to RSC
  • Run off cover must be in place
    Execution of the appointment under hand will result in 6 years liabilityW
55
Q

What are the main elements of a fee proposal

A
  • Terms and conditions
  • Scope of services
  • Exclusions
  • Assumptions
56
Q

If the client gives you a lump sum before going on holiday, what would you do

A

I would place the funds into a seperate bank account identifies with their name and client, agree a drawdown of monies against the services provided.

57
Q

What do 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 fulfill their duties impartially
  • An existing relationship will result in reduce 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.
58
Q

How could the conflicts of interest be managed internally if two separate departments were working for the same client

A
  • Ensure exclusivity of staff
  • Information Block
  • Physical segregation
  • Staff NDA agreements
  • Monitor the conflict
59
Q

If a client insisted you work for them despite a conflict of interest how would you proceed

A
  • I would check the clients understanding of the conflict
  • I would make the client aware of any potential reduced impartiality
  • If they were still insistent i would gain a letter of instruction and gain informed consent
  • I would monitor the conflict and update the client if it changes
60
Q

Under the Bribery Act, What circumstances is a facilitation payment permitted?

A
  • The only circumstance is when under duress, danger to life or limb
61
Q

What are the main principles are the bribery act 2010

A

The offences are
- Making a bribe
- Receiving a bribe
- Bribery of a foreign public official
- Failure of a corporate entity to prevent bribery on its behalf

This legislation applies to all UK entities and includes associated persons

There are 6 principles of prevention
- Proportionate procedures
- Top Level commitment
- Risk assessments
- Due diligence
- Communication
- Monitoring and review

62
Q

You have won a gift at a main contractor organized business conference, How would you act?

A
  • I would be uncomfortable accepting the gift
  • The gift is of significant value and could be interpreted as a bribe
  • I would decline the prize and report this to my line manager
63
Q

Name the bye laws

A

/ Designations
/ Contributions to funds
/ Conduct
/Application and definition

64
Q

What are bye laws

A

The Bye laws are set out in the royal charted and determine how the RICS is regulated

65
Q
A

RICS - Mandatories (10 decks)

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