Ethics Flashcards
1
Q
What are the ethical principles
A
Honesty, integrity, Competence, Service, respect and responsibility
2
Q
What is the RICS CPD policy for members
A
20 hours a hours
10 hours formal
10 hours informal
Need to be logged by 31 January
3
Q
What insurance are requirements when starting your own business?
A
- Employers Liability
- Public Liability
- Professional indemnity
- Building insurance of an office premises
4
Q
What are the offences of the Bribery Act?
A
- Accepting a bribe
- Offering a bribe
- Failure to prevent a bribe
- Giving consent for a bribe
- Bribing a public foreign official
5
Q
When was RICS founded
A
1868
6
Q
Who is the CEO of The RICS
A
Justin Young
7
Q
When did the new rule of conduct come into place
A
2 Feburary 2022
8
Q
What are the minimum level PI requirements
A
Up to £100k turnover - £250k
£100k - £200k turnover - £500k
Above £200k - £1m
9
Q
Why did the RICS update new rules of conduct from the global professional and ethical standards
A
Now a single document providing greater clarity
Previous rules are outdated
RICS. Members and firm voted in the majority to update them
10
Q
Why did you the RICS update new rules of conduct from the global professional and ethical standards
A
Now a single document providing greater clarity
Previous rules are outdated
RICS. Members and firm voted in the majority to update them
11
Q
What is the maximum level of uninsured excess
A
Up to £10m - 2.5% of the policy sum or £10,000.
Above £10m - no fixed limit
12
Q
What is bribery
A
The act of offering someone money or something valuable in order to persuade them to do something for you
13
Q
How can a disciplinary proceeding be triggered?
A
- Someone complaining to RICS
- An allegation by client or third-party.
- information received or established by the RICS.
14
Q
What three actions can be imposed after the end of the investigation stage?
A
- Fixed penalty
- Consent order
- Disciplinary panel
15
Q
What are the RICS obligations for firms?
A
- Firms must publish a complaints-handling procedure,.
- Firms there is adequate PI insurance in place.
- Firms must cooperate with RICS.
- Firms must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
- 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.
- Firms must report to RICS any matter that they are required to report under the Rules for the Registration of Firms.
- 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.
16
Q
What is the difference between RICS ethics and rules?
A
Ethics are a set of moral values. Rules of conduct are framework that we work to.
17
Q
What is run off cover?
A
Insurance for claims made against a firm after it has stopped doing business
18
Q
What are the Five rules of conduct set by the RICS?
A
- Members and firms must be honest act with integrity and comply with their professional obligations.
- 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 encouraged diversity and inclusion.
- Members and firms must act in public interest take responsibility for the actions act to prevent harm and maintain public confidence in the profession.
19
Q
Who is the president of the RICS
A
Nicholas Maclean
20
Q
What are the professional obligations for RICS members
A
1, Members must comply with the CPD requirements set by RICS.
- 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.
21
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.
22
Q
How is the RICS Structured?
A
.
Privity Council sit at the top
- 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.
23
Q
What are the RICS’ 5 principles of better regulation
A
- Proportionality.
- Accountability.
- Consistency.
- Targeting.
- Transparency.
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.
25
How many Global Professional and Ethical standards are there?
* 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.
26
Why did the previous Rules of Conduct change?
* 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.
27
Talk us through your understanding of the Rules of Conduct changes?
* The Rules of Conduct October 2021 Global Practice Statement will overhaul the previous separate documents:
o Rules of conduct for Members.
o Rules of Conduct for Firms.
o Global Professional and Ethical Standards.
* Appendix A of the Rules of Conduct now contains the professional obligations of Members and Firms.
28
What are the professional obligations of members?
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.
29
What are the professional obligations of firms?
1. 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.
30
Why does the 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.
31
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?
* 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.
32
In the case of a breach of a rule of conduct what is the procedure?
* 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.
33
How can a disciplinary proceeding be triggered?
* Someone complaining to the RICS.
* An allegation by a client or third party.
* Information received or established by the RICS.
34
What three actions can be imposed after the end of the investigation
stage?
* Fixed penalty.
* Consent order.
* Disciplinary panel.
35
What are fixed penalties?
A fine by the RICS.
36
What are consent orders?
* 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.
37
When is a disciplinary panel applicable?
* 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.
38
What sort of breaches would expulsion be suitable for?
* 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.
39
What procedures must you follow if you are starting up a new practice?
* 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.
40
Would you advertise your new company in the press?
Yes as long as it is in a trustful and responsible manner in line with the Rules of Conduct for Firms.
41
What sort of information do registered firms have to send to the RICS
annually?
It is called annual return and carried out on-line.
* Failure to do so leads to a fixed penalty.
* It includes:-
o Type of business and staffing.
o Nature of clients.
o Training provision.
o Complaints handling procedures details and records.
o PI insurance details.
o Whether the firm holds clients’ money.
42
What processes do regulated firms need to put in place when handling Clients' Money?
* Preserve the security of clients' money which does not belong wholly to the company.
* RICS regulated firms that operate a client account must:-
o Set clear segregation of duties for employees.
o A Principal oversees the client money accounting functions.
o Principles cannot override controls.
o Competent and knowledgeable staff are to process clients' money with cover provided for long term absence.
o Accounting systems and data must be secure.
o Client money must be kept separate and clearly identifiable with the word ‘client’ included in the bank account name.
o Clients must always have access to funds.
o We must agree the terms and advise the client on bank details.
o The account must not be overdrawn.
o We must maintain client ledgers and provide a running balance.
43
What are the different types of client money accounts?
* General accounts hold money for more than one client.
* Discrete accounts reference a single named client.
44
What is meant by the term Negligence?
* 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 Insurance claim.
* Negligence is a failure to provide the duty of care that is owed to the client.
45
What limitation periods are associated with underhand and deed forms of contract?
* 6 years when executed under hand.
* 12 years when executed as a deed.
46
What must a complaints handling procedure include?
* The RICS provides a model form.
* 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.
* Names and contact details of the nominated investigating person must be stated.
* The complaint must be investigated within 28 days.
* All complaints, their progress and outcomes must be recorded.
* We must note the need to advise PI insurers of a complaint immediately.
* The process must have two stages as a minimum:-
o Stage 1 is where there needs to be consideration of the complaint by a senior member of the firm or the complaints handling officer.
o 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.
47
What is an independent redress scheme?
* 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.
* If the complaint relates to a large amount of money or if the complainant wishes so, he can take the matter to court.
48
What do you do if you receive a letter of complaint?
* 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.
49
What is the ‘Clients’ Money Protection Scheme’?
* 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.
50
What is the purpose of the joint names on a client account?
For the purpose of dual authorisation.
51
What are the continuous professional development (CPD) requirements?
* 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.
52
How many hours must you do?
* 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.
52
What sorts of activities are included?
* 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.
53
What does PII stand for?
Professional Indemnity Insurance.
54
What is the purpose of Professional Indemnity Insurance?
* 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.
55
What benefits does PII provide for the professional?
* The professional is protected from financial losses.
* The firm does not have to meet the claim from their own assets and resources.
56
What benefits does PII provide for the client?
* They are able to recover their financial losses.
57
On what basis is PII underwritten in the UK?
On a claims made basis - 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.
58
What are the requirements regarding Professional Indemnity Insurance set by the RICS?
* 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.
59
What measures should be taken to try and avoid PI claims?
* 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.
60
If you made a mistake in your cost plan what would your insurance company expect?
For you to notify them and comply with any conditions & procedures set out in the insurance policy.
61
If an estimate prepared by a QS is incorrect can the client claim damages?
* 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.
62
How can you limit your liability when agreeing terms of appointment
with a client?
* 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.
63
What are the main elements included within a fee proposal?
* Terms and conditions.
* Scope of services.
* Exclusions.
* Assumptions.
64
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?
* 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.
65
Once you and your client agreed the services that are to be provided
verbally what would you do next?
Follow up with a formal letter which includes the terms and conditions, fees and scope of services that are to be provided.
66
If the client gives you a lump sum fee before going on holiday, what would you do?
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.
67
Tell me what you understand about conflicts of interest?
* 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.
68
How could the conflict of interest be managed internally if two separate departments were working for the same client?
* 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.
69
Under the Bribery Act, under what circumstance is a facilitation
payment permitted?
The only circumstance in which it is OK to make a facilitation payment is when you are under duress - If you or your companions are under immediate physical threat.
70
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?
* 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.
* 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.
71
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?
[CHECK ANSWER]
* 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.
72
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?
* 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.
73
What is are ethical values?
A set of moral standards by which we can judge our actions or action of others to be wrong right or wrong
74
What are the RICS Bribery and Corruption requirements for regulated firms?
- Not offer or accept, directly or indirectly, anything that could constitute a bribe
- Have plans in place to comply with applicable laws governing bribery and corruption,
- Report any activity they are aware of that breaches anti-bribery and corruption laws
to the relevant authorities or senior members.
- Act with due diligence to perform periodic written evaluations of the risks that face
the firm and that may lead to the facilitation of bribery or corruption;
75
What are the RICS Bribery and Corruption requirements for regulated members?
- Not offer or accept, directly or indirectly, anything that could constitute a bribe
- Ensure that they have adequate knowledge of bribery and corruption to be able to
comply with the requirements of this professional statement
- Report any activity they are aware of that breaches applicable anti-bribery and
corruption laws to the relevant authorities (as specified in local legislation); where
there is no local legislation the activity should be recorded and, if possible, reported
to a senior manager.
76
What are the RICS money laundering and terrorist financing requirements for regulated firms?
* not facilitate or be complicit in money laundering or terrorist financing activities
* have systems and training in place to comply with these laws, and ensure these are
followed
* report any suspicions of money laundering or terrorist financing activities to the
relevant authorities (as specified in local legislation); where there is no local legislation
the activity should be recorded and, if possible, reported to a senior manager
* ensure that their responses to the risks identified are appropriate, including
conducting appropriate checks on clients and customers
77
What are the RICS money laundering and terrorist financing requirements for regulated members?
* not facilitate or be complicit in money laundering or terrorist financing activities
* report any suspicions of money laundering or terrorist financing activities to the
relevant authorities (as specified in local legislation); where there is no local legislation
the activity should be recorded and, if possible, reported to a senior manager.
78
What are the RICS guidance on Bribery and Corruption for regulated firms?
- Prepare a written policy covering anti-bribery and corruption
- Have appropriate governance and systems controls in place, proportionate to the
type of work the firm does
- Encourage transparency within the organisation by implementing a register
79
What are the RICS guidance on Bribery and Corruption for regulated members?
- Declare certain items to their employer
- Attend relevant training provided by their employer or a regulator
- Be familiar and act in compliance with their employer’s policy
80
What are the RICS guidance on Money laundering and terrorist financing for regulated firms?
- Have a written policy addressing money laundering and terrorist financing risks
- Have appropriate governance and systems controls in place, proportionate to the
type of work the firm does
- Provide appropriate, recurring training for staff, to ensure they are familiar with the
risks associated with money laundering and terrorist financing and the firm’s systems
to counter these risks
- Keep reports of suspicion of money laundering and terrorist financing activity
confidential
81
What are the RICS guidance on Money laundering and terrorist financing for regulated members?
- Keep up to date with training provide by firms or regulators
- comply with their employer’s policy and process relating to money laundering and
terrorist financing
- keep reports of suspicion of money laundering and terrorist financing activity
confidential
- if in a senior management position, take a leadership role in attempting to ensure that their employer has an appropriate regime in place for addressing money laundering and terrorist financing risks.
82
What are the three types of conflict?
- Own interest conflict
- Party conflict
- Confidential information
83
What is own interest conflict?
A situation in which the duty 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
84
What is party conflict?
A situation in which the duty to act in the interests of a client in a professional assignment conflicts with the interests of that same RICS member/firm.
85
What is confidential information conflict?
A conflict between the duty of an RICS
member to provide material information to one client, and the duty of that RICS
member to another client to keep that same information confidential.
86
What are the common ethical challenges
- Conflict of interest
- Bribery and Corruption
- Confidentiality and data protection
- Misrepresentation and False
Reporting
- Unprofessional Client Relationships
- Professional Negligence
