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APC > Ethics > Flashcards

Ethics Flashcards

1
Q

What are the 5 RICS Rules of Conduct?

A

Rule 1: Members and firms must be honest, act with integrity and comply with their professional obligations, including those 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 skills

Rule 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

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2
Q

What are 7 mandatory Professional Obligations all RICS members must follow?

A
  1. Members must comply with CPD requirements set by RICS
  2. Members must cooperate with RICS
  3. Members must provide all information reasonably requested by the Standards and Regulation Board.
  4. Firms must publish a complaints handling procedure which includes ADR method approved by RICS and a record of complaints
  5. Firms must display and RICS designation on their business literature to show they are regulated by the RICS
  6. All previous and professional work must be covered by adequate professional indemnity cover
  7. Firms with a sole principal must have arrangements in place if they can no longer work
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3
Q

How much professional indemnity insurance cover must an RICS regulated firm have?

A

Based on a firms turnover:

£100,000 turnover or less - £250,000 required

£100,001 to £200,000 - £500,000 required

£200,000 or more - £1,000,000 required

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4
Q

What is professional indemnity insurance ‘Run Off’ cover and how long is this required for?

A

Professional indemnity insurance cover is required for at least 6 years after the last date a member carried out any work. Members are liable for up to 15 years after completing any work, 6 years is just the minimum requirement.

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5
Q

Detail the RICS requirements for complaints handling procedures

A
  1. A firm must have a complaints handling procedure and a complaints log
  2. A complaint is free to the claimant and must be dealt with with 28 days of receipt.
  3. Any complaint must be addressed to the complaints handling officer or designated senior member of the firm
  4. If the claim cannot be resolved within 28 days then it must be referred to a 3rd party and dealt with under an RICS approved ADR method.
  5. The complaints handling procedure must be provided with a firms terms of engagement
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6
Q

What are the RICS mandatory requirements for the handling clients money?

A
  1. Accounting systems and client data must be securely protected
  2. Client accounts must be named and must have the word ‘client’ in the account name
  3. Client money should always be available on demand and always be in credit (ie not paying other debts with client money)
  4. Account details must be provided to the client and it must be agreed if the firm is to retain interest
  5. A ‘3 way’ reconciliation is completed once a month where clients money is held in a general client account
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7
Q

Name some examples of conflicts of interest?

A
  1. Acting for a firm or person with competing interests to a client
  2. Having other obligations or pressures that affect the relationship with your client eg acting as an expert witness that may involve the client
  3. Acting for two or more parties competing for an opportunity
  4. If you stand to gain or lose any financial interest based on your professional work/recommendations (above your standard fee)
  5. Having a personal relationship with a 3rd party so the advice you give to the client may be biased
  6. Where the financial interests of your own firm conflict with your client
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8
Q

If a conflict of interest is identified, how might the be mitigated?

A
  1. Be open and transparent, informing all parties of the potential conflict understanding that you may need to stand down from the instruction if necessary.
  2. The client acknowledges there is potential for conflict of interest and so provides ‘informed consent’ in writing.
  3. Accurate record keeping throughout the process ensures that decision making can be easily followed.
  4. Information barriers - for example, it is common for leasing companies to represent both clients and tenants. If this is the case, separate surveyors must work for each party and have no communication or physical interaction eg sharing the same printer.
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9
Q

Countering bribery, money laundering and terrorist financing (1st edition) came into effect in September 2019. What does it mandate RICS registered firms do?

A
  1. Not to facilitate money laundering etc. understanding your client and the nature of their transactions.
  2. Have systems of training in place and keep thorough records
  3. Report any suspicious activity
  4. Periodically review the risks and existing business relationships ensuring the responses to risks are appropriate
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10
Q

What are the implications for businesses of the Bribery Act 2010?

A
  1. Firms must undertake compliance programmes including training and monitoring
  2. Firms must undertake risk assessments
  3. Firms must undertake due diligence on business partners and 3rd parties
  4. Periodic monitoring and reviews

The Serious Fraud Office is responsible for enforcing the Bribery Act 2010. If they can prove there is a breach, the court can award 10 years in prison or unlimited fines.

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11
Q

What is the role of the RICS?

A

It is an independent body working in the public interest to advance knowledge and uphold highest professional standards, also provides training, impartial advice and guidance

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12
Q

What are the key functions of the RICS?

A

Advancing the highest ethical and technical standards for professionals working in the built environment, land and property industry.

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13
Q

What is the Royal Charter?

A

This requires the RICS to act in the public interest with a governing body called the ‘Governing Council’ responsible for overseeing the effective delivery of their strategy as well as standards and regulations

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14
Q

Who is the current RICS president?

A

Tina Paillet

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15
Q

What do the RICS bye-laws do?

A

They are designed to ensure the RICS operates transparently, ethically and effectively by providing a framework of governance, member conduct and RICS objectives.

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16
Q

Can you provide an example of an RICS bye-law?

A
  1. The bye-laws cover how often meetings must be held and the rules and methods for voting.
  2. The bye-laws cover the govern council, the term they serve, how they are elected and their rules and powers
  3. It covers the different types of RICS members
  4. It covers the various roles within the RICS such as CEO and their duties
  5. Governs the roles of permanent committees eg the regulation board, finance committee and ethics committee and how these are formed
  6. Lays out the RICS Code of Ethics and professional conduct that all members must adhere to
  7. Details the requirements for RICS members to maintain financial records as well as subscription and membership fees
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17
Q

What disciplinary procedures can the RICS impose? Under what circumstances?

A

When a complaint is made, if it is deemed as serious enough, the Regulatory tribunal will investigate.

For less serious cases when guilt is admitted, the head of the regulatory tribunal may impose a ‘regulatory compliance order’ which consists of either a fine, a caution or conditions that the member must follow to continue their membership. If guilt is not admitted, a single member of the regulatory tribunal will investigate and determine the outcome which could include expulsion.

In serious cases, the head of the regulation may refer the case to a ‘Disciplinary Panel’ drawn from the regulatory tribunal. The panel will conduct a hearing and consider the evidence provided. The panel can fine the member, expel them and determine costs/damages.

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18
Q

What is a red flag that a client may be money laundering?

A
  1. If a client is evasive over the source of funds or reason for a transaction
  2. If a transaction has unusual features eg size, nature, frequency, early repayment without reason, complicated instructions, loss making
  3. If the client is incorporated overseas in high risk countries, uses intermediaries, has criminal associations, has unusually high level of knowledge over money laundering regulations
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19
Q

When was the RICS founded?

A

1868

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20
Q

When did the RICS receive the Royal Charter?

A

1881

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21
Q

How many current members does the RICS have?

A

Over 130,000

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22
Q

How would an RICS member become a fellow?

A
  1. More than 5 years as an MRICS
  2. Must be in a leadership role
  3. Professional/technical achievement
  4. Raise the profile of RICS
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23
Q

What must be included in a firms annual return?

A
  1. Type of business and staffing details
  2. Statutory Regulated Activities - eg valuation firms for financial services
  3. Nature of clients
  4. Complaints Handling Procedure and Records
  5. PII Insurance details
  6. Whether the firm holds clients money
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24
Q

What does the Rules of Regulation of Firms 2019 state?

A
  1. If 50% or more principals in a U.K firm providing surveying services are RICS members then it has to be regulated, the firm can opt to be regulated with at least 25%.
  2. Principals are sole practitioners, directors, partners, board members or anyone able to act autonomously without supervision from the firm
  3. Each firm must nominate a responsible principal who ensures compliance with the RICS rules and regulations.
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25
Q

What improvements did the new Rules of Conduct make over the old ones?

A
  1. Simpler Structure
  2. Clearer examples
  3. Focus on respect, diversity and inclusion
  4. Understanding evolving technology
  5. Tackling global challenges
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26
Q

What is the Ethics Decision Tree?

A

Provides a framework of questions that members should ask themselves when facing a situation in which they are asked to act in a potentially unethical manner

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27
Q

If a member used the Ethics Decision Tree and still cannot determine whether an action may break RICS regulation, what can they do?

A

The RICS operate a confidential hotline that gives members assistance with ethical issues

28
Q

How should Fee’s be agreed?

A

Clear, transparent process based on market comparables/the time it takes to complete the work.

29
Q

What are terms of engagement?

A

These must state in writing the clients acceptance of the proposed fee, how expenses are paid and a copy of the firms complaints handling procedure.

30
Q

When should you NOT accept an instruction?

A
  1. If you are not competent
  2. You are not being provided with sufficient facts on the issue
  3. The proposed client will not sign off the terms of engagement or AML checks
  4. There is a conflict of interest that can’t be managed
  5. PII indemnity cap can’t be agreed
  6. The advice is for a friend on a pro-bono basis but your PII doesn’t cover this work
  7. The company is on the governments sanctions list
  8. The work could cause public embarrassment to your firm if it was made public
31
Q

What is conflict avoidance?

A

Once you have the full facts, consider whether the conflict is unavoidable and so you should withdraw or whether it can be managed

32
Q

If there is a potential for a conflict of interest but you still want to accept the instruction what can you do?

A
  1. Disclose the nature of the conflict
  2. Be as clear as you can and provide all of the facts
  3. Request written confirmation from the client (s) for their informed consent
33
Q

How could a potential conflict be managed?

A

Information barriers - Must have a physical and verbal information barrier so two surveyors shouldn’t use the same printer, come into contact with each other etc. Key to keep a clear audit trail of all communication with the compliance team overseeing all actions

34
Q

What is the independent 3rd party Workman use in their complaints handling procedure?

A

Consumer clients - Property Redress Scheme

Business to Business - Centre for Effective Dispute Resolution

35
Q

What steps can you take to avoid being sued for negligence?

A
  1. Clearly understand the clients objectives and confirm precise instructions in writing in the terms of engagement
  2. Ensure you are competent
  3. Ensure all RICS Standards and Guidance Notes are followed - Agree with the client if there are to be any exceptions and provide reasoning
  4. Keep detailed notes and records of communication
  5. Keep up to date with market knowledge and legislation
  6. Ensure a PII cap is agreed on the terms of engagement
36
Q

How would you start a new practice?

A
  1. Inform the RICS and register for Regulation by the Regulatory Board
  2. Appoint a Responsible Principal who ensures compliance with the RICS
  3. Arrange PII and send details to the RICS
  4. Set up procedures for client money handling
  5. Obtain RICS approval for your firms complaints handling procedure
  6. Appoint a complaints handling officer
  7. Ensure ‘logo kit’ and ‘regulated by the RICS’ is on all practice material
  8. Ensure you have a locum
  9. Ensure your members meet their CPD requirements
  10. Ensure completion of the RICS Annual Return at the end of each year
37
Q

What are the 9 protected characteristics under the Equality Act 2010?

A
  1. Gender
  2. Sex
  3. Sexual Orientation
  4. Age
  5. Disability
  6. Race
  7. Religion
  8. Marriage status
  9. Pregnancy and maternity
38
Q

What are the 4 types of discrimination made illegal by the Equality Act 2010?

A
  1. Direct Discrimination - Treated worse than other people because of your protected characteristics
  2. Indirect Discrimination - Policies that apply to everyone but disadvantage a group of people under a protected characteristic - eg a job advert requesting 10 years of work experience could be age discrimination
  3. Harassment- eg unwanted physical advances
  4. Victimisation - eg not being paid correctly on pupose after making a discrimination claim
39
Q

What client onboarding checks would you undertake?

A

KYC check

AML check

Credit Check

Conflict of Interest check

Check if client is on the sanctions list

Check who the beneficial owner is

40
Q

What are some offences under The Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017

A

Hiding criminal funds using legitimate business

Tipping off any party

41
Q

What are 4 offences under the Bribery Act 2010?

A

Giving a bribe

Receiving a bribe

bribing an official

Not have systems in place to prevent bribery

42
Q

What can firms put in place to prevent bribery?

A

Training

Access control/access logs

gift policy

Audits

43
Q

What is an Inclusive Employer Quality Mark? Does Workman have one?

A
  1. Leadership and vision: Demonstrable commitment at the highest level to increasing the diversity
    of the workforce.
  2. Recruitment: Engage and attract new people to the industry from under-represented groups; best
    practice recruitment methods.
  3. Staff development: Training and promotion policies that offer equal access to career progression
    for all members of the workforce.
  4. Staff retention: Flexible working arrangements and adaptive working practices that provide
    opportunities for all to perform at their highest levels.
  5. Staff engagement: An inclusive culture where all staff engage with developing, delivering,
    monitoring and assessing the diversity and inclusivity policies.
  6. Continuous improvement: Continually refreshing and renewing the firm’s commitment to being
    the best employer; sharing and learning from best practice across the industry.

Yes

44
Q

What does ‘claims made’ mean in terms of PII?

A

This means that the policy in place at the time the claim is made by the client will provide cover

45
Q

What is a PII aggregation clause?

A

PI policies almost invariably contain an aggregation clause that allows or requires a number of, usually, similar or linked claims to be treated as a single claim

46
Q

If you were providing services outside of your usual scope to a client, what
might you need to do in relation to your PII cover?

A

As long as I was competent and had the relevant information, I would contact my PII provider to see if the scope could be increased and what the risks are of this?

47
Q

Where do you get Pi insurance?

A

From any RICS registered PII provider

48
Q

What can a surveyor do to protect themselves in terms of PII when agreeing to do work for a client?

A
  1. Agree the scope of works in writing as well as the terms listed below
  2. Always include a personal liability clause
  3. Proportionate Liability Clause
  4. PII cap
49
Q

In a negligence claim, what would help to show that you acted with
consideration and due process?

A
  1. Written agreement to scope of works, any assumptions being relied on etc
  2. Thorough record keeping to show clearly how decisions were made in line with RICS
  3. All communication recorded properly in writing
50
Q

Explain the recent changes to PII cover?

A

As of 2021 RICS new Minimum Policy Wording and insurance rules are in place to provide greater fire safety cover for chartered surveyors

This also changed for cyber cover as well.

51
Q

When might informed consent not be good enough to mitigate a conflict of interest?

A

A contentious assignment or where the appointment is subject to a specific statutory or regulatory regime. So for example, if you as a chartered surveyor are appointed to be an arbitrator on a secured lending valuation involving your firm, informed consent wouldn’t be enough.

52
Q

What are the 5 principles of Better Regulation?

A
  1. Proportionality
  2. Accountability
  3. Consistency
  4. Targeting
  5. Transparency
53
Q

Is there any RICS publication on Conflicts of Interest?

A

RICS Conflicts of Interest 2017 - Professional Standard

54
Q

What is the difference between adjudication and arbitration?

A

An adjudicator will hear an outline from both sides before determining which party is in the right. This takes 28 days and whilst the decision isn’t usually binding, the party that was ruled against tends to accept the decision.

Arbitration is a longer process and is binding.

55
Q

What is conciliation?

A

Conciliation is an ADR process where an independent third party, the conciliator, helps people in a dispute to identify the disputed issues, develop options, consider alternatives and try to reach an agreement.

56
Q

How is conciliation different to mediation?

A

Conciliation is typically used when there is a specific legal issue whereas mediation is more general where the parties simply are not communicating.

57
Q

What governs dispute resolution during insolvency or bankruptcy proceedings?

A

The Insolvency Act 1986

Provides the legal framework for the liquidation of companies and the distribution of assets to creditors in a fair and orderly manner.

Insolvency Practitioner or Official Receiver is appointed by the court to liquidate the company

58
Q

What is a Dispute Review or Recommendation Board (DRB)?

A

The parties establish and empower a DRB with jurisdiction to hear and advise on the resolution of disputes. Typically in long term contracts the DRB is required to make recommendations which can become binding in 30 days

59
Q

What is DAB?

A

Dispute adjudication board - this board makes disputes which are binding

60
Q

How does DRB & DAB work?

A

In long term contracts, one side will appoint one member each with each sides agreeing to appoint the 3rd member to avoid deadlocks.

61
Q

What is a PEP? What impact could this have and what measures should you put in place?

A

A PEP is a politically exposed person eg someone that either works for a government organisation or is connected to a person that does.

You should ensure you understand the source of client funds and closely monitor the business relationship.

62
Q

What is the cost of MRICS membership annually?

A

£350 annually in the first two years

£540 annually after this

63
Q

What are the caps on excesses for PII Insurance?

A

Limit of indemnity Maximum uninsured excess:

Up to and including £500,000 The greater of 2.5% of the sum insured, or
£10,000

Over £500,000 2.5% of the sum insured

64
Q

What is a money protection scheme and can you explain it?

A

RICS Client Money Protection Scheme - Provides compensation where an RICS regulated firm isn’t able to repay it’s debts to a client. All regulated firms pay an annual fee which covers the operational costs of this scheme.

Must be detailed in client money handling procedures

Must be claimed from within 12 months of the loss

£50,000 limit per claim

Can claim up to £10.3 million PA

65
Q

What is the purpose of RICS?

A

Promote the highest ethical and professional standards, being a leading source of knowledge and education to promote trust in the profession.

66
Q

What are some ways leadership can be improved?

A

Leadership with empathy

Acknowledging privilige and bias

Cultural competence

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