Ethics Flashcards
What is the Mission Statement of the RICS?
• Offer the highest standards of professional service and expertise
• To promote and enforce standards to protect consumers
• Provide impartial advice and lead solutions to the major challenges
When was RICS founded?
1868 with royal charter granted by Privy Council in 1881
Explain Royal Charter and Privy Council
-Royal Charter requires to “promote the usefulness of the profession for the public advantage in the UK and in other parts of the world.”
-Mechanism that forms RICS… Approved by monarch under guidance of privy council council
-Lists obligations (eg advancement of knowledge, act in public interest) that must be met by governing council
Privy council:
-Changes to bye-laws ratified by UK Government through Privy Council
-Granted by Monarchy, advised by Privy Council
What are bye-laws?
-A list of laws applied internally using powers granted by the Royal Charter
-Rules for RICS to regulate itself
-Outlines the processes for membership, conduct (eg disciplinary procedures and sanctions)
-Enforced by Standards and Regulations Board (who govern member/firm performance, and sanctions)
Name some bye-laws
-Designations
-Governing Council
-Boards, Committees and Groups
-Membership and Registration
-Conduct
-Definitions
Professional obligations of Firms (Appendix A)
CICooPRAD
Complaints handling
Information
Cooperate
Professional Indemnity
Report under rules for firms
Arrangements
Designations
-Complaints handling procedure published with ADR provider approved by RICS, and complaints log
-Information requested by Standards and Regulation board is provided
-Cooperate with RICS
-Professional Indemnity insurance minimum levels (adequate and appropriate)
-Report required matters under Rules for the Registration of Firms.
-Appropriate arrangements for sole principal if incapacity or death
-Designations in accordance with RICS policy to denote regulated by RICS on business literature
RICS ADR / independent redress providers
-Centre for effective dispute resolution (CEDR)
-Property redress scheme
-Another one
RICS Ethics Decision Tree
-Sufficient facts?
-Legal?
-Follow Rules of Conduct?
-Clear reasoning?
-Consulted with appropriate people and informed?
-Happy to be in public domain?
Client money handling procedure includes:
-Separate account
-Client name in title
-Secured account
-Appropriate procedure overseen by responsible principle
-Client instant access
-Money received put into account in 3 working days
-Interest paid to client unless otherwise agreed with written consent
-Client given running account of balance in ledger
-Never overdrawn
-Two person authorisation
-Annual audits
-Agree terms in writing
-Central list of all client accounts
-Fees received in advance but not yet billed paid into client account pending completion
-No sum other than what client paid into it
RICS firm statutory requirements:
-Comply with employment legislation e.g: H&S At Work Act, Equality Act
-Comply with legislation like Data Protection Act 2018, Money Laundering Regulations 2007, Bribery Act 2010
-Follow statutory policies for staff pay/hours/sickness/annual leave/maternity/redundency
When registering, RICS firms must:
-Have complaints handling procedure
-Minimum PI insurance levels
-Robust client money handling procedures in line with RICS guidance and notify if handle it
-Responsible principal
-Comply with statutory requirements
-Comply with RICS obligations (ROC, bye laws, inform RICS)
-Locum if sole practitioner
-Ensure staff competent/trained
-Register for regulation
Regulatory review visit (RRV)
Follows a Member Support Visit (where RICS non compliance is recorded)
So the RRV is another visit with a more in depth review with graded report to review what actions/procedures/controls in place firm made to address previous findings and reduce risks
Benefits of RICS regulation
-Quality assurance by adherence to rules of conduct
-Provides confidence to consumers
-Enhances member’s status
-Provides guidance / support for members
-Recognised procedures
What is the Governing Council
-Sets RICS’ global strategy and ensure fulfils Royal Charter obligations (advance public trust and positive social impact)
-Enforces professional standards and shapes priorities to provide high level assurance
-Delegates strategy responsibilities to RICS board but still sets it and approves changes to constitutional documents
-Oversees RICS Board and Standards & Regulation Board
Explain RICS Board
-Delegated responsibility from Governing Council for delivery of business plan and oversight of operations.
Is akin to a corporate board and basically directs RICS’ affairs.
Oversees:
-Global Members Committee
-Audit, Risk, Assurance & Finance Committee (monitors RICS financial reporting/risk management systems)
-Knowledge & Practice Committee (maintain/develop knowledge, technical standards, training, public knowledge on profession and key issues, APC competencies)
-Nominations & Renumeration Committee (oversee elections, approve annual budget, renumeration policy)
Explain Global Members Committee
-Report to RICS board
-Consider/recommend business plans developed by World Regional Boards to the RICS Board as part of the overall business plan.
-Ensure quality/consistency of member services, experience, engagement and act as bridge between members/world regional boards and RICS board
-World regional boards are: UK/Ireland, Americas, Asia Pacific, Europe, Middle East/Africa
Explain Professional Group Panels
-Report to Knowledge & Practice Committee
-Advance knowledge and practice of surveying for public advantage
-Research, contribute to RICS sustainability strategy , develop technical standards
-Following Governing Council approval after Bichard Review
-Targeted attention and strategic oversight on e.g:
Building surveying, Valuation, Land and Natural Resources, Residential Property, Commercial Property, Construction
Note: not QS’ing
Explain Standards and Regulation Board
-Accountable to Governing Council but not led directed them
-Remit defined in bye-laws, regulations
-Lead RICS’ obligation to regulate members for public advantage to maintain trust and confidence in profession by making sure firms/members operate to standards
-Set rules and provides assurance that the independent Regulatory Tribunal (disciplinary) operating effectively
-Lead development of global regulatory strategy
-Assurance that members/firms meet professional standards
-Setting/upholding standards of entry and assessment
-Responsible for professional standards and rules of conduct
Explain RICS regulations
-Rules to follow
-Build on bye laws (same structure) but with more specific procedures (apart from Conduct as dealt with in ROC)
Explain Standing Orders
Describes processes for bye law 6 (Governing Council) for elections, emergency decisions, conduct at meetings
Disciplinary action can arise from
-Complaints/concerns reported
-Misconduct
-Serious professional incompetence
-Breaches of bye laws/rules
-Criminal conviction
Can be disciplined by:
-Fixed penalty notices: less serious e.g didn’t comply with CDP requirements, pay fees, provide info to RICS). First breach is a caution and second time is caution AND fine.
-Regulatory compliance order (used to be consent order): formal written agreement between the RICS and the member/firm for the latter to take/
refrain from taking action within a specified time or pay a fine
-Disciplinary Panel - can issue anything and up to expulsion: for serious breaches in front of the Disciplinary Panel where penalties can be anything from a caution to expulsion
What is a Regulatory Compliance Order
Regulatory compliance order (used to be consent order)
-Agreement between RICS and member that they are liable for disciplinary action
-Requirement that they do/stop doing something as a condition on their membership/firm’s registration
-Actions to meet/stop something happening again
-Can come with a caution, fine, costs of investigation
-If member doesn’t agree then goes to single member of regulatory tribunal or a whole disciplinary pane
Explain Regulatory Tribunal
-If member doesn’t admit to allegations of Regulatory Compliance Order but doesn’t warrant a hearing, will be referred to a single member of Regulatory Tribunal
-For serious cases the Head of Regulation can refer case to Disciplinary Panel to conduct hearing
PI insurance limits:
Minimum levels are based on firm’s turnover:
-£100k or less: minimum £250k PI
-£100-200k : minimum £500k PI
-£200k+: minimum £1m PI
PI insurance should contain:
-On an ‘each and every claim’ basis
-On a ‘claims made’ basis
-Cover past and present employees
-Minimum levels
-Runoff cover
-Underwritten by RICS listed insurer
-Retroactive (cover claims from work before took out insurance)
-Full civil liability basis (minimum policy wording) which covers actions that damage but aren’t criminal - but wider than negligence as cover situations where a policyholder may be held liable for a loss, without having being found to be negligent
What is ‘each and every claim’
Each claim treated as separate (e.g £1m claim each time) rather than aggregate where is £1m for whole financial year
What is ‘on a claims made ‘basis’
Covers claims that are made during the period of insurance regardless of when the negligent act occurred (eg if it happened before the insurance taken out)
Policy in place when claim was put in.
Why is PI insurance required:
-Ensured if a firm faces a claim, it is protected from financial loss that it cannot meet from its own resources.
(From liability to pay damages to third parties for breaches of professional duty - which is wider than just negligence)
-Enaure the firm’s clients do not suffer financial loss, which the firm cannot meet.
Runoff cover requirements:
When a firm ceases to trade you need run off cover for:
-Minimum 6 years
-(Best practice 15 years as this is PI insurance long stop)
-Minimum £1m aggregate
-Retroactive
What is Assigned Risk Pool
If firm unable to obtain PI then as last resort to access coverage through pool of insurers while firm takes action to rectify issues
What do you know about Conflicts of Interest?
-A conflict of interest is when in a position of trust and have a competing interest that can cause you to act impartially
-Have an obligation to make clients aware of this and if necessary decline work opportunities where there is one
-Can be a party, own interest, or confidential information conflict
What is the Levitt Review?
-Report into treasury management issues
-Four non-executive board members raised concerns on audit and were dismissed from Management Board
-Governing Council commissioned independent review
-Found that governance principles were not followed due to a lack of clarity of roles and responsibilities of various RICS boards leading to lack of scrutiny of Chief Executive and CEO
-This led to a power struggle between MANAGEMENT BOARD and EXECUTIVE BOARD
It recommended:
-An independent review into governance (Bichard Review)
-Governing council have more oversight of internal dealings of RICS
-Presidential team cannot be part of management board
-Board chairs can raise matters with Governing Council rather than single CEO
-Overhaul of whistleblowing structure,
-Review of legal advice and executive bonuses
Governing council accepted all recommendations
precursor to update of rules for members/firms. Found that sound governance principles were not followed by RICS (accountability, awareness, impartiality and transparency). Concerns of non-Executive Board members’ concerns were legitimate and were wrongly dismissed. A lack of clarity around the roles/responsibilities of the various RICS Boards, senior leadership and management. Led to a lack of scrutiny over the actions of the RICS Chief Executive and Chief Operating Officer.
Review recommended: more board meetings, a values statement, board members subject to regular reviews, overhaul of whistleblowing structure
When you acted ethically
When you proved good service
Ethically (could also be good service):
-On HS2 audit I had meetings with the client who were interested in a potential audit - I did an initial review to see if there was scope for cost control to be up front instead of saying we can definitely help
Taking responsibility: notified CE period to respond was almost up so did an initial review and prompted PM
Good service:
-Provided knowledge share to junior members of the client as this was identified as a weaker area of my employer’s feedback
How to prevent a PI claim (breach of professional duty/negligence)
-Don’t work/advise outside of your competence
-Understand client’s objectives
-Work in accordance with RICS guidance/standards
-Keep full record of advice given, meetings
-Proper letter of engagement outlining services and terms of engagement
-Avoid excessive workloads
What is ‘limit of liability’ and when would it be used?
-Agreement that a client can only claim damages up to the amount agreed from a breach of contract
-Can be used to limit liquidated damages
Can be used in PI where:
-Each and every claim where each claim has a limit
-More limited in aggregate (but doesn’t meet RICS requirements)
RICS 5 principles of better regulation are:
PACTT
-Proportionality
-Accountability
-Consistency
-Targeting
-Transparency
Explain what RICS principles of better regulation mean
-Accountability: decisions should be transparent and justified under public scrutiny to promote fairness
-Consistency: fair and level playing field
-Transparent: keep regulations/ROC simple and user friendly
If a client was prepared to pay you in advance for services, how would you deal with this?
-Set up separate client bank account properly named
-Inform and agree drawdowns
-Provide a statement of account/ledger detailing what services the fees are made up of, always updated
-Show a final statement and ensure transparency throughout
What do registered firms have to send to the RICS annually?
-Type of business/staffing/nature of clients
-Training provisions
-Complaints handling procedure / records
-PI insurance details
-If handle client money
What is the purpose of the 5 Principles of Regulation?
RICS is self regulated so it sets out how it regulates internally to maintain highest standards of professionalism/integrity for benefit of public interest
A newly appointed PM working for Client advises that they are concerned about the terms their predecessors agreed with you. They state not to expect the same terms and advise that if you give a 20% discount they won’t renew your contract. How would you respond?
-More a matter of negotiation
-Would consider the reduction of services/resources would need to be reviewed in line with this
-Ensure do not devalue the profession if original fees fair
- Produce a fee profile / resource schedule to determine if saving and adequate service can be provided
What to do if a friend asks you for advice?
-Could not offer advice on my own without Pl insurance.
-If I did, I’d ensure information was subject to thorough checking process given to all information
-Inform they can contact you during working hours to discuss T&Cs of appointment.
-If not comfortable then advise them to use RICS “find a surveyor scheme”
-Adhere to rules of conduct
What was the Carsberg Report 2005
-Internal/external review of RICS due to member’s dissatisfaction with with its regulation
-It recommended a conduct board, need to regulate firms, review of CPD requirements
How do firms comply with GDPR?
-Have knowledge of the data you store/ process, and where it is
-Know how it is used and rights of individuals
-Be able to supply on request data you hold and how it is being used
-Be able to delete with right to be forgotten
6 principles of prevention for Bribery Act
DAMPCoT
-Due dilligence
-Assessment (risk)
-Monitoring and review
-Proportionate procedures
-Communication
-Top level commitment
Who regulates members of the RICS and ensures they comply with the rules?
-RICS is self regulated so members are internally monitored/inspected
-Standards and regulation board do this for RICS to build and maintain trust and confidence in the profession for the public advantage.
What are the requirements under the current money laundering legislation?
Regulated firms must:
1. Register with HMRC
2. Carry out customer due diligence measures to check client identities eg passports m, and assess risk
3. Keep records of customer due diligence checks and financial transactions
4. Put systems in place to avoid money laundering
5. Appoint a ‘nominated officer’ who is responsible for reporting suspicious activity to the National Crime Agency
(NCA) under the Proceeds of Crime
Act 2002
What are the requirements under the current money laundering legislation?
Regulated firms must:
1. Register with HMRC
2. Carry out customer due diligence measures to check client identities eg passports m, and assess risk
3. Keep records of customer due diligence checks and financial transactions
4. Put systems in place to avoid money laundering
5. Appoint a ‘nominated officer’ who is responsible for reporting suspicious activity to the National Crime Agency
(NCA) under the Proceeds of Crime
Act 2002
For how long should files be preserved?
-At least the duration of the limitation period - 6 years for underhand and 12 for deed
-Consideration must be given to the Data Protection Act 1998, which states records should be kept for ‘no longer than is necessary’
How are disciplinary matters dealt with by the RICS?
Head of Regulation manage the RICS regulatory regime day to day and conduct investigations. Can also decisions such as imposing a Regulatory Compliance Order.
Regulatory Tribunal - reviews appeals against regulatory decisions made by the Head of Regulation and sits on disciplinary panels
What can you/your firm do to prevent fraud?
-Set up a fraud response plan, outlining procedures for detection, investigation, prevention of further loss, securing evidence, recovery and reporting
-Never hand out confidential information to any unsolicited phone calls, texts or emails
Professional obligations of members
CooCI
Cooperate
CPD
Information
Example of rules 1 and 2
Rule 1
-Heathrow audit: given accounts by client and gave summary of if there was scope for costs to be reduced. If there was then Gleeds would get more work but I advised that there was only a small amount of concern
Rule 2
-Reflect on work and identified need to undertake training on TW asset standards to improve knowledge and advise client better on design etc
Example of rules 3, 4 and 5
Rule 3
Tailored my approach to inexperienced client who required an impact study. I explained the requirements of it and ways they could reduce cost
-During valuation of jobs on SoR at month end I stayed late to get some pending high value jobs over the line. Benefitted contractor’s cash flow and prevented employer from having to make a payment on account
Rule 4
Ramadan example
Rule 5
Investigated complaint promptly
Closing down a RICS firm
-Inform RICS
-Inform clients and return money
-Inform insurers
-Ensure RUN OFF COVER in place for minimum 6 years at minimum £1million aggregate and retrospective
Runoff cover is for negligence once cease trading
What is the RICS inclusive employer quality mark?
-designed to improve diversity and inclusion within the property and construction sector.
-The scheme requires employers to pledge their commitment to adopting and continually improving against the following six principles:
• Leadership and Vision.
• Recruitment.
• Staff development.
• Staff retention.
• Staff engagement.
• Continuous improvement.
-Participating firms will be required to assess their performance against the criteria on a bi-annual basis.
-RICS will use the assessment information to document the outcomes and trends for the profession as a whole.
What are Professional Standards and Practice Information
Following Bichard Review, now split into these two types
Professional standards are requirements for RICS members using ‘must’ and ‘should’ eg conflict of interest, bribery anti money laundering
Practice Information: supporting guidance and recommendations eg Black Books, checklists, research
Tell me about: RICS article, news, event near you
-RICS Article - e.g Luton stadium upgrade in only 5 months built with sustainable materials that will be reused when they move stadiums
Also Tina Paillet on a built environment GCSE
RICS modus: making homes more foood resilient
-RICS news - review of President Justin Sullivan following criticism of evidence given during a high-profile case as an expert witness in High Court.’
Governing Council confirmed President Elect Nick Maclean to be Acting Chair of Governing Council and Acting President
Also, Whole life carbon assessment 2nd edition July 24
Environmental impacts of data centres
RICS events near you: RICS Matrics Bristol
What would you do if a client orders you to proceed despite a conflict of interest?
-Make sure they understand COI
-Seek written INFORMED consent, not just consent
-Agree procedures to manage CO. Such as information barrier across departments
-Keep them updated of risks and changes
Explain Professional Groups?
18 of them such as QS’ing, Project Management, Building Surveying, Dispute Resolution
Separate from the 6 Professional Group Panels
They draft/review professional guidance, set standard for professional competence required for RICS membership, Contribute to policy formation, do research, do CPD events
What must a complaints handling procedure include?
RICS has model form with minimum 2 stages:
Stage One
First stage gives firm opportunity to review and consider complaint and try to resolve it
-Acknowledge
-Consideration by senior member/complaints officer
-Try to resolve
Stage Two
Second stage if party still not happy and allows complaint to be reviewed by a free independent redress provider
-If unable to resolve internally then taken to an independent redress mechanism (approved by the RICS)
-Must be clear, quick, transparent and impartial
-All complaints, progress ,outcomes must be record
RICS default redress provider is Centre for Effective Dispute Resolution (CEDR) - Gleeds use this
TW is Council for Consumer of Water
General:
-Must be free
-Must be clear, quick, transparent
-Issued (published) in terms of business
-RICS approved independent redress
-Notify PI
-Maintain complaints log and record outcome
-Details of nominated person investigating
What is in Gleeds complaints handling policy?
-Director for each region to deal with complaints
-If made orally then requested for written summary to director
-Gleeds contact within 7 days on their understanding and seek complainants comments
-Within 21 day of this Gleeds will inform of outcome
-If dissatisfied, then CEO will review within 14 days
—————
INDEPENDENT REDRESS (stage 2)
-Then mediation with CEDR
-After that, revert complaint to RICS through its dispute resolution service (DRS)
What are the types of conflicts of interest?
Party Conflict - where the duty to act in the interests of a client conflicts with a duty owed to another client in the same professional assignment
Can also apply to duty to courts and adjudicators
Eg Gleeds acts for 2 clients bidding for development rights, developer and tenant
Gleeds requires more sophisticated systems as is multi disciplinary. Party conflict can be avoided by clearly defining scope of duties
—-
Own Interest Conflict - where a duty to act in the interests of the client conflicts with your interests
Eg Gleeds could secure future work as a result of giving advice to another party, have insider information
Informed consent possible but great caution exercised here
—-
Confidential Information Conflict - a conflict between duty to provide all information for client and duty to maintain confidentiality with another client
Applies to current and past clients
Eg have useful information for one client but is sensitive information another client gave you
What is an information barrier?
When a firm is acting for 2 clients, an information barrier is the Physical/electronic separation of individuals within same firm that prevents confidential information passing between them.
These may ASSIST a client to give Informed Consent (to a Party Conflict) or in resolving a Confidential Information Conflict
But on its own will NOT be a solution to a Conflict of Interest. Informed Consent must still be obtained from all affected parties
Consent should be obtained from all parties affected when an Information Barrier is put in place.
If Information Barrier is part of a solution to obtain Informed Consent, the onus will be on the member/firm to ensure it works in practice, not just in theory/reasonable steps
So need to understand how their office works physically/electronically
Examples: physical separation of systems, electronic access restrictions (encryption), physical segregation of duties, put in different offices, password protected documents, separate communication lines, locked storage
In all cases, informed consent must be received for information barrier to be implemented
What is informed consent?
Consent given willingly by party who may be affected by a Conflict of Interest, they acknowledge the risk and provide consent to proceed despite it. But they have to demonstrate to RICS member that they understand:
-that there is a COI/a significant risk and client knows what they are doing
-the facts that are material to the COI, and RICS members had been transparent
-what that COI is or may be
-that a COI may affect the ability of the RICS member/firm to advise or act fully in the interests of a client.
Must prove that INFORMED consent was achieved, not just consent
should only consider proceeding with the work (and seek Informed Consent in order to proceed) if satisfied that all of the relevant clients’ (or other parties’) interests will be served by you doing the work (as opposed to another firm doing it).
Just because client has given informed consent does not mean should definitely proceed, so could decline the assignment - USE YOUR professional judgment
You should not seek Informed Consent in order to proceed because your firm’s interests are served by doing so.
If informed consent is obtained it must be in writing/recorded. Communications are AUDITABLE in case of claims, and need in writing to prove it happened
It is generally not enough for party or confidential interests, most likely used for personal conflict
What is Gleeds conflict of interest policy?
-Generally won’t advise if a risk of COI
-No personal conflict
-If managing a COI, Gleeds must decide, not client.
-Global head of Risk will maintain register of why declarations with a note on how to proceed eg reject assignment, proceed with informed consent, no conflict
-Has steps how to identify a COI, how to report, how to manage
-Scenarios where Informed Consent not appropriate eg Due Dilligence assignment, public sector, litigation support
What are Gleeds responsibilities for Conflicts of interest?
Have a policy
Regularly review/amend
Provide training
Maintain register or declarations potential conflicts
Record of decisions made
Record of informed consents and other measures
Declare personal conflicts
Immediately REPORT ANY CONCERNS TO MANAGER or through WHISTLEBLOWING POLICY
What is Gleeds anti bribery policy?
-All work honest and ethical
-Due diligence to ensure no bribes
-In accordance with principles of Bribery Act 2010
-Must declare all offered gifts and need approval from line manager
-must notify manager OR the Group Compliance Director OR the confidential email helpline (whistleblowing) ASAP if suspect bribery taking place
-Accept if proportionate, justified and not lavish while considering its intention
-No cash
-All recorded in gifts/hospitality register
-Can accept up to £50 with line manager approval
-£100+ need director approval
-£500 regional director
What are Gleeds ‘red flags’ of potential bribery risks?
-Insists on dealing with cash
-Payment to different country than usual
-Payment certificate doesn’t relate to work done
-Lavish gifts
-Non standard invoices
-Disproportionate fees
How is Gleeds at risk from bribery?
• Procurement: (eg insider information, improper evaluation)
• Valuation of works: carried out in accordance with our Technical l (eg improper evaluation, unauthorised payments).
• Preparation of budgets and estimates: in accordance wit Technical Procedures. Ensure we do not come under influence n preparing estimates (e.g misrepresentation of genuine cost an offence under the Fraud Act)
• Corporate hospitality and gifts:
• Facilitation payments: making of such payments will be an offence under the Bribery Act. Not necessarily illegal in USA
• Operate in countries of high risk corruption
• Interactions with public officials: especially in high-risk jurisdictions.
• Operates in the construction sector: considered to be high risk.
How does Gleeds follow bribery act principles?
Risk assessment - one in each country
Proportionate procedures - clear policy
Top level commitment - executive management board approved policy
Due diligence - appointments procedure for clients
Communication - to all employees
Monitoring and review - annually, frequent audits
What is Gleeds anti money laundering policy?
-Gleeds targeted as multi disciplinary, in differing countries, significant value transactions
Gleeds’ responsibilities: appropriate policies/procedures to comply with legislation, regularly review these,
Appoint a Money Laundering Reporting Officer and Money Laundering Compliance Officer, Appoint a member of the management board to be responsible for compliance with MLR2017, Carry out a Risk Assessment to comply with the MLR2017, identify current/emerging risks, appropriate training to all staff, Engage independent auditors, Implement systems to enable reporting, Regularly review, and where necessary update AML / CTF Policy, Implement systems to verify clients , Refuse cash payments from clients or third parties.
Must know clients work is: being financed, beneficial owner, whether work/client structure makes sense , follow KYC due diligence
Report to:
line manager, money laundering reporting officer, or confidential whistleblowing email
What is money laundering legislation?
Terrorism Act: relating to terrorist activity
Proceeds of Crime Act: relating to money laundering
Money Laundering Regulations 2017: relating to anti money laundering administrative procedures
Legislation applies to everyone in ‘regulated sector’, if not then may need to submit a Suspicious Activity Report (SAR)
What is money laundering?
proceeds of crime are converted into assets that appear to have a legitimate origin
Done by:
Placement: into legitimate financial systems
Layering: moving money around to avoid detection
Integration: buy something legitimate.
Red flags of money laundering
-High risk country
-Pay in cash
-Avoid personal contact/secretive
-PEP subject to sanctions
-Unusual work or transaction size that is disproportionate
-Choosing Gleeds when no local offices
-Loss making
-Complicated structure
-New businsss
How might conflicts of interest be identified?
-Firm process depends on size / areas of firm’s practice
-Through database checks, ask staff to declare personal interests
-Update register on regular basis
-Properly consider systems to identify conflicts between different disciplines in the business
-Continuously apply process as risk can arise during project’s lifetime
How do you deal with a conflict of interest?
-Submit information to business/their register
-If there is one and you decide to proceed, consider informed consent and information barriers
What is client money?
money that RICS firm holds for or receives on behalf of someone else that is not immediately payable. Could be:
-Tenant deposit
-Rent
-Service charge
-Client account interest
-Arbitration fees
-Client money due to be paid to contractors
-Money due to contractor
What do you do if a conflict of interest arises?
-Actively identify
-Disclose information to employer AND client (obligation!)
-Make judgment on whether seek:
-Informed consent / Information Barrier/NDA
-Professional judgment if in Client’s best interests
How long do you keep client information for?
-At least 6 for underhand, 12 years for deed
-Best practice 15 years as this is PI insurance long stop
What is the purpose of RICS?
- Regulate and promote the surveying profession
- Maintain the highest educational and professional standards
- Protect clients and consumers via a strict code of ethics
- Provide impartial advice and guidance
What is RICS Matrics?
-Support, develop, provide networking for new and prospective members in the surveying profession
-Organises networking opportunities, charity events and CPD,
-providing a voice for individuals new to the profession following Bichard Reciew
What is Lion Heart?
-Charity funded through past and present RICS members
-Provides support to members (past and present) and their families, including financial support, health and wellbeing packages and work-related support
Who is chair of RICS Matrics?
Neil A’Bear
What is the RICS presidential team?
Nicholas Maclean - acting President AND acting chair of governing council
Maureen Ehrenberg - acting president elect
Justin Sullivan WAS President but now under review
Who is RICS executive team?
Justin Young is CEO
What different types of professional guidance is published by the RICS?
Professional Standards
Practice Information
Guidance notes
Rules of conduct
What types of measurement practice are there?
-International property measurement
standards.
More specifically IPMS: All Buildings
-RICS Property measurement - for office and residential buildings
-RICS Code of measuring practice - all other buildings
BOTH OF THESE BEING UPDATED TO REFLECT IPMS ALL BUILDINGS
As a surveyor, why should you follow the guidance produced by the RICS?
-If an allegation of professional negligence is made against a surveyor, the court is likely to take into account compliance with relevant professional standards published by the RICS in deciding whether or not the surveyor acted with reasonable competence
-Best practice
-Confidence to consumers
Who regulates members of the RICS and ensures they comply with the rules?
- The RICS is a self-regulatory body, meaning members are not regulated by government but are internally monitored and inspected
- The Standards and Regulations Board helps regulate the profession, deciding on policy and overseeing the implementation of regulatory matters
What determines when a firm has to register with the RICS?
A firm must register for regulation by the
RICS if it provides surveying services in the UK and at least 50% of its principals are RICS members
CAN register when at least 25% of principals are members, provide surveying services, and practice on UK
What are the rules for registration of firms?
After you become regulated, you must comply with the RICS Rules of Conduct for Firms:
-Having adequate Professional Indemnity Insurance (PII)
-Complying with regulations for holding clients’ money
-Having a written Complaints Handling Procedure
-Ensuring staff receive adequate training to act competently
Registration of Firms:
Firms must register for regulation if they provide:
-Surveying services to the public
-In UK
-At least 50% of the firm’s principals are RICS members.
The firm must:
-25% of the firm’s principals must be RICS qualified members or have a plan to secure compliance and supervised by RICS regulated firm
-Designate a responsible principal who provides oversight, accountability, and engagement with RICS standards and regulations.
If you were to leave here today and set up your own firm, what would you need to put in place?
- Create a business plan
- Register the new company on
Companies House (if required) - Comply with the RICS obligations
- Comply with statutory obligations
- Take out sufficient insurance policies
Other than PIl, what other insurances should you have in place when starting a new surveying business?
- Public liability insurance
- Employers’ liability insurance
- Business vehicle insurance
- Buildings insurance
- Contents insurance
- Directors’ and officers’ insurance
- Business interruption insurance
What is a locum agreement and what should it contain?
An agreement for a person to temporarily fulfil the duties of another due to their incapacity or death. They essentially step in to manage the business and client affairs while the regular surveyor is away.
including:
1. Description,
2. Timetable of work
3. Remuneration provisions
4. Restrictions to carry out work
5 Conflicts of interests
6. Restriction to carry out work that 7. confidential information
7. Insurance policy arrangements
How does the RICS regulate firms?
RICS Regulation employs a risk-based approach to regulating firms and members,
initially employing a Desk-Based Review (DBR),
followed by a Regulatory Review Visit (RRV) if necessary
What is a Desk-Based
Review (DBR)?
Following completion of the Annual Return, RICS Regulation may require a firm to undertake a DBR (electronic questionnaire), which looks to determine what level of risk a firm or member poses based on their activities
High risk activities:
- Holding clients’ money
- Undertaking general insurance mediation work (i.e. holds a DPB
licence - see below) - Undertaking valuation work in accordance with the RICS Valuation
Standards
What is the Designated Professional Body (DPB)
scheme?
Approved by HM Treasury, it enables the RICS to be a Designated Professional Body (DPB).
Allows RICS to regulate its members for general insurance advice activities on behalf of the FCA
What does the RICS require when a firm handles clients’ money?
Regulated firms that hold clients’ money must pay a regulatory review fee on an annual basis
What is the purpose of a client holding account?
To preserve the security of clients’ money entrusted to regulated firms against:
1. Insolvency of the firm
2. Misappropriation by any party
3. Death of a sole practitioner
What is the difference between a general and a discrete client account?
-General client account - holds money belonging to more than one client
-Discrete client account - holds money belonging to a single client
What is the maximum length of time you should keep a client’s money before placing it in an appropriate account?
3 days
Who does interest earned on a client account belong to?
Belongs to the client unless written consent states
otherwise
What is the Clients’ Money
Protection Scheme?
• Free to use RICS service (paid for by firms as part of their yearly regulatory review fee) that allows members of the public to be reimbursed for any direct loss of funds (i.e. clients’ money held by a regulated firm that has been misappropriated)
• The scheme is one of last resort - the firm is primarily responsible for making good the loss and the scheme only comes into operation when the firm are unable to make payment
Current limit is £50,000 per claimant up to an overall limit for all claims under the scheme of £5,300,000 in any one calendar year
What steps would you take if any surplus money was discovered in a client’s account?
- Ensure all efforts are made to trace the clients/owners of the money
- Hold the surplus money in a suspense account
- Hold surplus money for at least 3 years
- Donate to a registered charity if no owner has been found (keeping a receipt and preferably an option recover the donation)
What legislation governs the reporting of suspicious activity?
- The Proceeds of Crime Act 2002
- The Terrorism Act 2000 (all individuals and companies must report terrorist financing where suspected/known)
What can you and your firm do to prevent fraud?
- Set up a fraud response plan, outlining procedures for detection, investigation, prevention of further loss, securing evidence, recovery and reporting
- Never hand out confidential information to any unsolicited phone calls, texts or emails
What should you do if you know of or suspect fraud?
Report it to Action Fraud
A client gives you money to cover planning and building regulations applications for a project - what should you do with it?
Set up a clients’ holding account in accordance with the RICS requirements
A client gives you a large sum of cash to pay for a builder whilst he is out of the country - what would you do?
- Question why cash is being used
- If circumstances are not deemed to be suspicious, set up a client holding account in accordance with the RICS’
obligations - If circumstances are deemed to be suspicious, report to the National Crime Agency (NCA)
When might a fine be deemed necessary to discipline a member/firm?
Only applicable for insufficient CPD, failing to provide information to the RICS and insufficient firm registration fees
When might a consent order be deemed necessary to discipline a member/firm?
- Breaches not serious enough for a public disciplinary hearing
- The member/firm admits the breach and is willing to co-operate with the
RICS
When might a panel hearing be deemed necessary to discipline a member/firm?
For serious breaches (e.g. mishandling clients’ money, accepting bribes etc.)
What is the Disciplinary
Panel?
- Comprises 3 members - a chair and 2 others, at least one of which must be a non-member of the RICS
- Hears disciplinary cases and exercises the disciplinary powers of the RICS
More serious cases than Regulatory Tribunal which is 1 person
What is the Appeal Panel?
- Comprises 3 members - a lay chair and 2 other panellists
- Hears appeals arising from decisions of the Disciplinary Panel and Registration Panel
What is CPD?
Continuing Professional Development -
commitment by members to continually update their skills and knowledge in order to remain professionally competent
Difference Informal and formal CPD
Formal - structured learning with clear learning objectives and outcomes
(e.g. professional courses, seminars and conferences, technical training, formal teaching/training for others etc.)
• Informal - self-managed learning relevant to your professional role (e.g. private study, attendance at informal seminars or events where the focus is on knowledge sharing etc.)
What are the RICS CPD requirements for APC candidates and RICS members?
APC candidates must undertake 48 hours of CPD each year, of which at least 50% must be formal CPD
Chartered members is 20 hours per years, at least 10 formal.
How would you keep up to date with changes in legislation?
- RICS website - news section
- Modus
- Building Surveying Journal
- CPD seminars
What do knowledge and practice committee do?
Under RICS board
responsible for overseeing the advancement of knowledge and professional practice. Eg training
Sits above the Professional Group Panels
What do Audit, Risk, Assurance & Finance Committee do?
Monitors integrity/efrectiveness of RICS financial reporting, internal control, and risk management systems, anti fraud measures
What does Nominations & Renumerations committee do?
Oversee election and appointment of governance bodies
Set remuneration policies and budgets for RICS employees
What is RICS doing for sustainability?
-Introduced Whole Life Carbon Assessment
Measure whole-life carbon emissions, manage carbon budgets, reduce life cycle emissions and deliver a net-zero future for the built environment by adopting this standard.
-Represented at COP29: to strengthen relationships with decision makers, advocating the importance of WLCM and legislation to improve sustainability
-ICMS3:
Helped develop cost and carbon management in construction. provides high-level structure/format for classifying/measuring/recording, analysing ife cycle costs and carbon emissions
What is RICS doing for DEI?
Summary:
-DEI panel following Bichard Review
-RICS inclusive employer quality mark
-Data insight eg women in surveying report and diversity reports
-RICS Diversity, equity and inclusion progress report 2024 - Encouraging an ethnically diverse environment - following McGregor-Smith review develop ethnic minority talent
-Lionheart
What is active and passive bribery?
When a person offers, promises or gives a bribe, it is called ‘active bribery’ and when a person requests, receives, or accepts a bribe, it is called ‘passive bribery’.
What must RICS firms / members not do in terms of bribery?
Not offer or accept a bribe
Report any activity
Act with due diligence
Ensure have adequate knowledge
What should RICS firms / members not do in terms of bribery?
Firms
-Written policy
-Register
-Risk assessment
-Encourage transparency
-Contactable person training
-Responsible person
Members
-Declare gifts/hospitality
-Comply with firm’s policy
-Attend training
What must RICS firms / members not do in terms of AML?
-Not complicit in money laundering
-Report
Firms only:
-Review periodically
-Understand client and their identity with appropriate measures (due diligence)
-Record information
-Systems and training in place
When should informed consent be used?
only where the RICS member/firm is satisfied that proceeding despite a Conflict of Interest is:
-in the interests of all of those who are or may be affected
-is not prohibited by law
-the conflict will not prevent the member/firm from providing competent and diligent advice to those that may be affected.
What must members and firms do in accordance with conflicts of interest?
Firms
-effective systems and controls in place appropriate to the size and complexity of business to ensure firm/employees can manage compliance RICS professional standard.
Members
-Identify and manage
-Keep records of COI and decision made
-Records of informed consent and other measures taken to prevent COI
When can you reveal confidential information?
-Required by law
-Can demonstrate that consent was achieved
Why is it important to avoid conflicts of interest?
-Duty to advise and represent each client objectively and independently
-RICS core (royal charter) must be considered at all times to: be for public advantage, promote usefulness of profession.. so must avoid COI’s for consumer protection.
-Rule of conduct: rule 1 - always act honestly and with integrity
What is the Procurement Act 2023?
Aims to simplify and modernize public procurement in the UK, making it easier for small businesses l to compete for public contracts and ensuring public funds are used effectively.
Why were the rules of conduct updated?
Aim to address global risks and opportunities:
-A simpler structure, consolidating the rules for members and firms into one
-Clear examples to support each Rule -A focus on respect, diversity and inclusion
-Highlighting the use of data and technology
-Tackling global challenges, including sustainability
What does a RICS firm’s responsible principal do?
The Responsible Principal (or person designated by Responsible Principal) shall be the primary regulatory contact for RICS within the Firm. And must must satisfy the RICS Head of Regulation that they are appropriate appointment
primary responsibility for ensuring that RICS’ professional, technical and ethical standards are applied, upheld and supported by an appropriate assurance framework w
Take all reasonable steps to ensure that the Firm complies with its regulatory and statutory obligations, such as:
-reasonable steps to ensure Firm has implemented appropriate policies, systems and controls to ensure compliance with all RICS standards/requiremenrs, and legal obligations
-able to demonstrate evidence of this to RICS if required to do so
-ensure all information provided to RICS is truthful and adequate
-any material changes in circumstances are reported to RICS
-ensuring there are processes and systems to record any failure to comply with RICS requirements, and provided to RICS
Obligations of registration: A Firm that has been granted registration for regulation by RICS shall:
-comply with the Rules of Conduct and these Rules
-act in accordance with the obligations set out in RICS’ Royal Charter and Bye-Laws
-inform the Head of Regulation of any finding against it by any disciplinary or regulatory body, court or statutory authority
-inform the Head of Regulation of any finding of insolvency against the Firm
-Notify the Head of Regulation within seven days if there is a material change regarding the Firm, and full details.
Why do you want to be chartered?
Promote trust and usefulness in the profession
Is a profession I love and
Part of an organisation where highest standards are upheld
Sustainability
What rule of conduct relates to Client Money?
Rule 1
Example: members do not misuse client money and keep it safe
What are the rules for RICS appointment documents?
-using their standardized forms for consultant appointments. Standard Form and Short Form, designed for different project types and complexities. These forms are intended to provide a clear and consistent framework for appointing surveyors
-RICS members are obligated to record the terms of their appointments in writing, as opposed to relying solely on verbal agreements. This helps reduce the potential for disputes and ensures a clear understanding of obligations between parties.
-RICS members must adhere to their professional standards and rules of conduct, which include maintaining a high level of competence, acting with integrity, and upholding ethical principles.
How would you protect your client’s interests if you decided to give up practice?
-Inform Client you are stepping down
-Return/deal with outstanding money in client account if your firm ceases trading
-Make arrangements in respect of files and digital records you are holding to keep them safe and confidential for as long as required.
-If just you stepping down then ensure a locum in place temporarily and arrangements for permanent replacement
Not client related:
-Inform your PI insurers and ensure runoff cover in place
How would you determine the time period that run off cover would need to be provided?
-For simple contracts made under hand, run-off cover is needed for 6 years, while
-For deeds, it’s needed for 12 years.
Why do we ring-fence Clients’ Money placed in our trust?
Ring Fenced = guarantee that (funds allocated for a particular purpose) will not be spent on anything else.
-Protection of Client Funds: by holding it in separate account from firm’s own funds
-Transparency: to make it easier to track and manage client money, ensuring it is only for the purposes intended by the client and minimise risk of misappropriation
-Confidence for Clients:
Strict Controls: Firms must maintain detailed records of all transactions involving client money and reconcile them regularly to ensure accuracy and prevent discrepancies.
Protection against Misappropriation:
What would be your approach of the client wished to pay you in advance for your services?
While advance payment is acceptable, it’s crucial to clearly identify it as such and ensure it’s treated as client money
-Document the Agreement: clearly written outlining scope of work, value,
payment schedule.
-Provide documentation showing how held money will be used and that the firm won’t use it for anything else, ensuring client understands
-Put into designated bank account only, with a receipt
-Maintain accurate records of all transactions, eg amount received, purpose, date.
-Ensure the client account is reconciled regularly
-Compliance with the RICS Client Money Protection Scheme.
- Adhere to the RICS Client Money Handling Professional standards
What would happen if your employer’s rules conflicted with the RICS rules? Which takes precedence?
RICS
Although Employer’s may comply with law, they may not follow ethical rules required in the surveying profession
If a conflict of interest arose within your business, what advice would you give to colleagues or clients on how to deal with it?
-If myself I would disclose it ASAP to my line manager / group compliance director
(If someone else would do same or report to whistleblowing)
-Record it in my company’s register with details
-Consider the type of conflict of interest
-Get assessment from company and
-Use my professional judgement on whether I should be on this assignment, considering informed consent should be obtained
-Comply with RICS conflict of interest Professional Statement
If you carried out work for a client and he decided to pay you in cash, what advice would you give to them and would you readily accept
it?
This is a ‘red flag indicator’ from both RICS guidance and Gleeds policy
Would be subject to enhanced due diligence as part of the Know Your Customer process
What are the sanctions of the Bribery Act 2010?
Up to 10 years in prison and an unlimited fine
What are the offences under the Bribery Act 2010?
-Bribing someone (active)
-Receiving a bribe (passive)
-Bribing a foreign public official
-Firm failing to prevent a bribe
Can you explain the process for safeguarding clients’ interests in the event of death or prolonged illness of a sole trader Chartered
Surveyor?
-Locum agreement of competent professional
-Must notify RICS
-The locum’s primary responsibility is to ensure that clients’ needs are met and ongoing projects are not disrupted
Who can be a Locum?
Another Chartered Surveyor, or a trusted professional such as a solicitor or accountant, appointed to temporarily cover for a sole practitioner who is unable to work.
Discuss a relevant third-party redress mechanism and their role?
Gleeds uses CEDR (Centre for Effective Dispute Resolution) Mediation, and:
-RICS DRS for adjudication
RICS DRS provides a range of alternative dispute resolution services, including: Mediation: A voluntary process where a neutral mediator helps parties reach a mutual agreement. Adjudication: Ideal for construction disputes, providing a fast decision during ongoing projects.
Arbitration: A binding process where an arbitrator decides the outcome. Expert Determination: A technical expert resolves highly specialised disputes.
If a friend asked you for an opinion on a project, they were considering carrying out what advice would you give them?
-I could not offer advice on my own without Pl insurance.
-If I did have my own Pl insurance I would ensure that the information given was subject to the thorough checking process given to all information prior to issue regardless of who it was to.
-Inform them they can contact you during working hours to discuss
T&Cs of appointment.
-If you are not comfortable acting for them, advise them to use the RICS “find a surveyor scheme”
-Adhere to rules of conduct.
If you and a were invited to a consultants Christmas Party, what advice would you give to your colleague, what are the guidelines for dealing with an offer of a gift or hospitality and when may acceptance be appropriate?
-RICS member/ firms should not accept gifts or hospitality that could be construed as a bribe or inappropriately influence professional judgment.
-They should declare gifts, hospitality, entertainment, and other related items to their employer, and adhere to employer’s/RICS policy
-Gifts should should be of a nominal or notional value, not lavish, proportionate given for a reasonable purpose, and not in advance of a decision or award
If you and a were invited to a consultants Christmas Party, what advice would you give to your colleague, what are the guidelines for dealing with an offer of a gift or hospitality and when may acceptance be appropriate?
-RICS member/ firms should not accept gifts or hospitality that could be construed as a bribe or inappropriately influence professional judgment.
-They should declare gifts, hospitality, entertainment, and other related items to their employer, and adhere to employer’s/RICS policy
-Gifts should should be of a nominal or notional value, not lavish, proportionate given for a reasonable purpose, and not in advance of a decision or award
-Inform your line manager / group compliance director for approval
-Declare the offer on the register, and also declare if accepted gift along with its value
What would you advise if a client approached you and asked if you would work for them directly instead of your employer to reduce their
cost?
-Would breach contract with my employer
-Not acting with integrity
-Not treating employer with respect
-Devalues the profession by undercutting, not sustainable
-Need to consider if can offer the same service for that price - probably not !
What is the conduct that is required to be a chartered surveyor?
-Maintaining professionalism at all times
-Follow RICS Royal Charter to advance profession and for the benefit of public
-Following and professional standards and RICS rules of conduct:
- honesty, integrity, and impartiality, along with upholding professional competence and providing diligent, good-quality service. They must also act in the public interest, take responsibility for their actions, and respect the rights and privacy of clients
What Laws and regulations govern the formation and workings of RICS?
Royal Charter, Bye-Laws, Regulations and Standing Orders.
Changes to the Royal Charter and Bye-Laws can only be amended following a membership vote and approval of Privy Council which is part of the UK government.
Governing Council can approve changes to the Regulations and Standing Orders
What are the Money Laundering Regulations 2017?
These regulations set out administrative requirements, including:
-Customer due diligence (CDD): verifying customer identities and understanding the purpose and nature of business relationships or transactions.
-Suspicious Activity Reporting (SAR):
Businesses are obligated to report suspicious activities to the National Crime Agency (NCA).
-Training: Relevant staff must be adequately trained
-Record keeping: maintain comprehensive records of their AML measures and procedures.
-Independent audit function: Some firms required to establish independent audit function to assess the adequacy of their AML policies, controls, and procedures.
The MLR 2017 are part of a broader UK regime that also includes the Proceeds of Crime Act 2002, the Terrorism Act 2000
What current challenges is Brexit bringing to Conduct & Ethics
-New Regulations and Standards; developed by UK which will need to be complied with. Eg GDPR changes,
-Project Disputes: caused by Brexit, threat to respect and professionalism
-Personal disagreements was reasons as above
-Ethical debate of denying visas for workers
What current challenges is Covid bringing to Conduct & Ethics
-Working from home
-When someone should not come in
-What more to be done on protecting staff in terms of infection
How does ethics and conduct affect the environment we live and work in?
-Increased duty on sustainability .. unethical conduct, such as prioritizing profits over environmental protection or ignoring safety regulations, can cause pollution, resource depletion, and habitat destruction.
-Company Corporate Social Responsibility
-Respect greatly affects workplace morale
- Take responsibility
How did you balance transparency and confidentiality when providing feedback to unsuccessful bidders?
-Confidentiality by avoiding detailed comparisons with the winning proposal
as this could reveal sensitive information about the internal evaluation process. General feedback without getting into specific details about competitor scores or weaknesses.
-Focused solely on that contractor’s submission in comparison to the AWARD CRITERIA. And how it could be improved
What procedures or tone did you adopt in your communication to ensure your conduct remained professional?
-maintain clarity, avoid jargon, and adapt their approach to the audience
-ensure all communications are clear, accurate, and honest, adhering to RICS’s Rules of Conduct,
-Procedure: maintaining records of all communications and confirming key points in writing
How did your approach to feedback demonstrate fairness and respect in line with ethical procurement?
Ethical Procurement:
-honesty, fairness, and open communication in all interactions with suppliers and stakeholders.
-ensures suppliers are treated fairly and equitably, with no preferential treatment or discrimination.
-considers the social impact of purchasing decisions, such as fair labor practices, human rights, and community development.
-environmentally responsible sourcing, including reducing waste, conserving resources, and minimizing the environmental impact of products and services.
-adheres to all applicable laws and regulations, including anti-corruption laws, anti-discrimination laws, and trade regulations.
-requires individuals involved in procurement to avoid conflicts of interest and ensure that their decisions are based on objective criteria.
-Due diligence: thorough research and assessment of potential suppliers, including their ethical practices, financial stability, and compliance with regulations.
-holds individuals and organizations accountable for their actions and decisions, ensuring that they are transparent and responsible.
-Whistleblower Protection: protects individuals who report unethical or illegal activities within the organization or its supply chain.
-Supplier Code of Conduct: establishing clear expectations for suppliers regarding ethical and responsible business practices.
What steps did you take after identifying the data breach to protect individuals’ confidentiality?
Immediately:
-contain the breach by eg shut down system/changing password
-report to ICO within 72 hours if a risk to individuals’ rights is likely.
Then:
-Adequate staff training to prevent happening again
-Do risk assessment, Investigate and Review processes overseen by Responsible Principal
-Only keep data for as long as it is necessary to do so. 6, 12, 15 years
Professional responsibilities for with data protection
-Know what to do if there is a data breach
-how to report one
-how to transfer data securely (both inside and outside the office)
-how to work securely from home
-how to comply with the firm’s personal data-protection policy
-how to avoid falling victim to malware, phishing and other types of cyber-attacks
What ethical risks did you consider before advising the subcontractor to withdraw the hospitality offer?
-Could influence me to behave impartially
-Could create a conflict of interest
-undermining trust and fairness in professional relationships.
-Potentially a bribe
On what grounds did you consider this to be a potential bribe?
-Lavish, disproportionate to occasion
-During award of something eg a tender
-Felt I was trying to be induced to acting impartially, what was INTENTION
-Consider if it is a legitimate business expense that promotes cordial relations
What alternatives did you consider before deciding to decline the offer and notify your Commercial Manager?
-Seeking approval from line manager on accepting the gift and recording it in the gifts and hospitality register
How did your advice to the subcontractor uphold the integrity of the tender process?
-Information given to one subcontractor given to all tenderers
-If allow errors to be amended, afford same opportunity to all tenderers
-Followed timescales
-implementing clear and open evaluation criteria
-managing conflicts of interest
How did you ensure your procurement of consultants met company and RICS ethical policies?
-Ensured I did not score the consultant I knew
-For the others, I made sure it was based on the EVALUATION CRITERIA only
-Did not share value engineering proposals with any other bidders (confidentiality)
-Identified conflicts of interest and decided whether I should continue
-Followed RICS rule of conduct and TW tendering policy
What led you to determine that advising the subcontractor on their error was the most ethical course of action?
TW Procurement Policy based on Public Contract Regulations 2015 state:
TW may request the bidders concerned to submit, supplement, clarify or complete the relevant information or documentation within an appropriate time limit, provided that such requests are made in full compliance with the principles of equal treatment and transparency.”
TW follow JCT Practice note which states that contractor’s prices must not be altered without GOOD JUSTIFICATION
Use Alternative 2 that allows changes
How did you balance your duty to follow the contract with your obligation to support fair contractor payment?
Collaboration required in an NEC or general framework contract
Clear payment timelines in accordance with Construction Act
Also payment notices
Ensure contractor paid fairly to facilitate cash flow
Assessed fairly
The contract followed fair payment
What ethical principles/considerations did you apply in certifying payment for work contractor didn’t apply for due to error?
Integrity and honesty to allow contractor opportunity to correct their application
Would facilitate their cash flow
Promote a collaborative relationship
How much CPD related to ethics?
Every three years
What legislation governs ethics?
Equality Act 2010
Data protection act 2018
Human rights act 1998
Bribery act 2010
Money laundering regulations 2017
TW:
Water Industry Act 2014
Flood Management Act 2010
Competition Act 1998
Enterprise Act 2002
When are you eligible to set up a RICS firm?
-provides surveying services to the public
-least 25% of the Firm’s Principals are RICS Members.
OR
-if Head of Regulation satisfied that Firm implementing an appropriate plan to secure compliance of getting 25% qualified, or is appropriately supported/supervised by another RICS-registered Firm
What is a runoff pool
Same as assigned risk pool (PI) but for run off cover.
So firms that are unable to obtain runoff cover can apply for coverage from RICS’ Run-off Pool (ROP)
Health and safety
What would happen if a member of public hurt from construction activities?
-Must be reported under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR)
-To the Health & Safety Executive
-Reported by Responsible Person eg employer/those in control of site
-Notify Public Liability Insurance provider as member of the public may sue due to negligence
What is runoff cover
-professional indemnity (PI) insurance that protects firms and individuals after they have ceased trading against claims arising from work they’ve done in the past,
-requirement for RICS-regulated firms to ensure they are protected
How does your company deal with a conflict of interest?
-Email is sent to everyone in business when company is about to be appointed
-If you have a conflict of interest, you respond, and this is recorded in a register with the details
-This is fed back to client who can decide on whether they want to give informed consent to proceed
What is modern slavery?
Slavery that still occurs today, such as:
-trafficking
-forced labour
-debt bondage
situations of exploitation that a person cannot refuse or leave because of threats, violence, coercion, deception, and/or abuse of power
-look at supply chain
What would happen if someone was found guilty under the bribery act?
individuals face penalties of up to 10 years imprisonment and unlimited fines,
-companies can also face unlimited fines and subject to confiscation orders for the proceeds of the crime
How can you as a chartered surveyor maintain a high ethical standard?
-Following RICS rules of conduct and advice/guidelines
-Report unethical behaviour
-Follow UK legislation
-Maintain CPD
-
What is terrorist financing?
raising and moving funds to support terrorist activities, regardless of the funds’ origin, which can be legitimate or illegitimate
Do you have to get PI insurance from RICS approved provider?
Usually should be
But if it isn’t, and the credit rating is to the RICS standards, then you can obtain it elsewhere:
From AM Best, with a credit rating of at least B+, or Standard & Poor with credit rating at least BBB
What would you do if the client insisted on paying for works before you completed them?
-Deposit into a clearly designated bank account
-Agree a drawdown i.e if it’s £10k could pay £2k a month for 5 months
This facilitates cash flow for both parties
What would happen if a chartered surveyor didn’t comply with the professional standards / guidance?
-Open to negligence claims where courts will look at whether you followed these
-May result in disciplinary action by RICS
What is money laundering?
process of illegally concealing the origin of money obtained from illicit activities through a seemingly legitimate source,l
-Placement (of illegal funds into legitimate source)
-Layering (moved around to disguise trail)
-Integration (re-enters legitimate source to be withdrawn by criminal)
Maximum levels of uninsured excess for PI insurance?
Maximum level of uninsured excess what you pay yourself is based on your limit of indemnity (turnover):
-Turnover £10m or less: maximum uninsured excess greater of 2.5% or £10k
-Turnover £10m+: no limit
Items included in a delay damages calculation
-Loss of rental income
-Incurred cost of renting eg storage space
-Increase of professional fees
-Third party fines from eg council, increased road closure fees
-Associated legal costs
What is the RICS insight community?
A platform for professionals that provides the opportunity to connect, network and engage with other professionals
How can rule 1 be implemented?
Must be honest, act within integrity and comply with their professional obligations, including obligations to the RICS
-Acting impartially
-Identifying/dealing with conflicts of interest
-Ensuring clients are informed by being open and transparent
-Protecting confidential information
-Not facilitating any financial crime, eg money laundering, bribery or corruption
How can rule 2 be implemented?
must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise
-Only undertaking Work I am competent to do
-Maintaining and developing knowledge and skills
-Stay up-to-date with relevant legislation
How can rule 3 be implemented?
must provide good quality and diligent services
-Understanding clients needs and objectives
-Understanding client scope of services
-Undertaking work in a timely manner
Ensuring proper records are kept of all advice
How can rule 4 be implemented?
must treat others with respect and
encourage diversity and inclusion
-Treating everyone with fairness and respect
-Creating inclusive cultures and environments
-Reporting abusive labour and modern slavery
How can rule 5 be implemented?
must act in the public interest, take responsibility for their actions and prevent harm and maintain public confidence in the profession
-Responding to complaints promptly, openly and professionally
-Cooperate with investigations Ensure not to undermine the RICS
-Take responsibility for actions
How can employers create an ethical environment?
-Publish a whistleblowing policy for confidentiality
-Include ethical evaluations in performance appraisals
-Encourage staff to pursue chartership
-Conduct CPD sessions surrounding ethics
-Put necessary training in place
-Comply with legislation and statutory obligations
What are the types of RICS documents?
Professional standards
Practice information
How does PII cover relate to locums?
The locum would either be covered under the firms Pll policy, or they could get their own cover
What kind of professional training have you done during your APC journey?
Mock interviews
Formal CPD through RICS website
Reading articles, standards, practice notes
Optional training my employer provides
What should you consider before accepting gifts and hospitality?
-Timing of the gift - is a project in an important stage, for example during tender
-Proportionality - Could it be considered a bribe?
-Impartiality - would accepting this gift affect my ability to act impartially?
-Accepting this align with the RICS rules of conduct
In your company, how do you identify conflicts of interest before appointments?
-Members of the firm are required to issue a conflict of interest check email to members of the company, to see if there would be any conflicts of interest
-If a conflict of interest is identified, the client would be notified, in writing, about the detail of the conflict of interest, and whether or not they deem it significant to exclude us from the works
-Client can give informed consent
How would you deal with a conflict of interest that has been identified?
-I would follow the Gleeds conflict of interest policy and the RICS professional standard for conflicts of interest
-This would include emailing details of the conflict to the risk management team to review whether we are able to continue with an appointment
-If the risk management team deem acceptable to continue with an appointment, details of a conflict of interest would be emailed to the client
-This would include what the conflict is, and ways it would be dealt with eg an information barrier
-Once have properly INFORMED client, they can decide to give informed consent
When might be inappropriate to be appointed on a project? When my informed consent not be sufficient?
If the works include due diligence where we have undertaken another role on the
project
Are you aware of any legislation associated with money laundering?
Money laundering regulations 2017 - set out the requirements for businesses to analyse their potential exposure to money laundering or terrorist financing such as risk-based approaches, customer due diligence, and maintain records.
Proceeds of crime act 2002 - relates to the preventing and recovery of proceeds from illegal activities, and establishing offences
What would you do if the client insisted on paying you for works before you have completed them?
-I would ask my client to pay the monies into a ring fenced bank account
-and agree a drawdown from that for payments for the works completed
What might make you suspect a client is money laundering?
-Money could come from different sources and bank accounts
-Money transferred from third parties
-Large cash payments
-Client avoids personal contact
-Lack of construction knowledge
-invoices don’t relate to project
Is there any relevant legislation associated with modern slavery?
The modern slavery act 2015
Makes it a level requirement for organisations to address and report on modern slavery, and ensure all goods and services have been ethically sourced
How can you avoid PIl claims with your clients?
-Keep record of all communications, meetings and advice
-Follow RICS professional standards and practice notes
-Don’t advise outside scope of competence
What is run-off cover?
a form of PIl which covers the business after they cease trading
Can you summarise the
RICS complaint handling professional standard?
-Understanding why clients complain
-Understanding how to deal with a complaint and escalation
-Highlights the importance of good record keeping, learning from experience and identifying training needs
-Includes appendices for claim processes and Pl insurance
How would you deal with a complaint?
-Follow my companies complaints handling procedure which includes:
-Notifying the Pl insurer as soon as possible of a potential claim
-Notify the complaints handling manager
-Contacting the complainant within seven days of their preliminary notice to inform them of my understanding
-Issuing a copy of the companies complaints handling procedure to the complainant
-Responding to the preliminary
notification within 21 days to inform complainant of the actions taken to rectity the issue
-Ensuring I do not dissuade the complainant from escalating their complaint to independent redress (ADR) provider eg the property ombudsman RICS dispute resolution service, CEDR
How can complaints be avoided?
-Setting clear expectations in scope of services and appointment documents
-Regular communication with client
-Following up in writing for good housekeeping and records
-Following company and RICS policies for conflict avoidance
What if a client came to you and gave you all the cost information to calculate delay damages and ask you to calculate them?
-If I didn’t have information it would be outside my area of expertise
If they did provided the numbers:
-I would calculate on that basis and ensure I reply to the client in writing that these are calculated based on the costs they have provided
-Before undertaking this work, I would always seek advice from my employer and risk management team before calculating damages on behalf of a client
Are you aware of any reason of chartered member may be disciplined?
-Serious professional incompetence
-Failure to adhere to regulations and bylaws
-Convicted criminal
-Conduct liable to bring RICS into disrepute
Who is the responsible principal?
The person responsible for upholding the RICS standards within a
company
Who is the contact officer?
The everyday contact for a person, whereby the RICS can get in touch about a company
Who sets the RICS bye-laws?
Byelaws are set by the Governing Council but they must be signed off by the Privy Council
What basis can you have Pl on? in the aggregate or each and every?
-Each and every claim would always be a preferred option, but an aggregate plus unlimited ‘around the clock’
reinstatement can also be used.
Basically whenever the aggregate is used up, it is reinstated to the full amount again
Can you give me some examples of times you have followed the RICS Rules of Conduct?
-Rule 1: I do not take unfair advantage of others; this is demonstrated regularly by ensuring | act impartially when assessing valuations
-Rule 2: I maintain my CPD and adhere to the RICs CPD policy
-Rule 3: I always ensure I keep proper records by providing all advice in writing to clients to ensure an audit trail is available
-Rule 4: I always treat others with respect and ensure everybody has the ability to speak when chairing meetings
-Rule 5: If it were to arise, I would ensure all complaints were dealt with in a timely manner
Other than delay damages, what else is not within your scope of expertise?
-Insurance
-VAT/tax
How would you initially deal with a complaint?
-Try and resolve with my client initially,
-and if cannot be resolved, resort to my company’s CHP
What may you exclude from an appointment document?
-VAT
-Services not included
-Travel expenses
