Ethics Flashcards
How often are members required to undertake learning on the standards expected around Ethics?
On a 3-year rolling period.
What are the RICS CPD requirements?
48 hours pre APC with 50% being formal. 20 hours when qualified with 50% being formal. Completed by 31 January.
Exemptions for maternity, unemployment and long term sick.
What are the 6 principles of the Bribery Act?
- Proportionate procedures
- Top level commitment
- Risk assessment
- Due diligence
- Communication (including training)
- Monitoring and review
What are the main aspects of the Bribery Act?
The Bribery Act 2010 makes it an offence for a UK national or person located in the UK to pay or receive a bribe, either directly or indirectly.
What is a bribe?
A bribe is an illegal or unethical gift, offer, or promise intended to influence the recipients conduct.
What is corruption?
Dishonest or fraudulent conduct by a person in a position of power.
Who are the global money laundering and terrorist financing watchdog?
The Financial Action Task Force (FATF)
What are the 5 red flag indicators outlined in the RICS guidance note Countering Bribery and Corruption, Money Laundering and Terrorist Financing 1st Edition
- The client
- The parties
- The source of funds
- The transaction
- The instructions
What is the three line defence outlines in RICS guidance note Countering Bribery and Corruption, Money Laundering and Terrorist Financing 1st Edition
- Front line staff
- Policies, systems, and controls
- Senior management, internal specialists and audit functions
Which regulations set out obligations on businesses and individuals to prevent money Laundering, terrorist financing and profileration.
The UK money laundering, terrorist financing and transfer of funds regulations 2017
Why should we be especially vigilant of money laundering and terrorist financing.
The 2020 UK national risk assessment for money laundering and terrorist financing classes the UK property sector as High Risk.
What should you do before establishing a business relationship according to RICS guidance note Countering Bribery and Corruption, Money Laundering and Terrorist Financing 1st Edition
Check if potential customers or clients are under any relevant sanctions. And report to the Office for Financial Sanctions (OFS)
What are the RICS rules of conduct?
- Be honest and act with integrity
- Maintain professional competence
- Provide good quality and diligent service
- Treat others with respect and encourage diversity and inclusion
- Act in the public interest and take responsibility
What are the members professional obligations to RICS
- Comply with CPD requirements
- Cooperate with RICS
- Promptly provide all information reasonably requested by Standards and Regulation Board.
What are RICS regulated firms obligations to RICS
- Publish a complaints handling procedure including alternative dispute resolution
- Ensure work is covered by Professional Idemnity Insurance (PII)
- Sole principle firms must ensure arrangements for continued work in event of death, incapacity or absence from work
- Cooperate with RICS
- Promptly provide information requested by Standards and Regulation Board
- Display on all literature that they are regulated by RICS
- Report any matter required under Rules for Registration of Firms
When is a firm required to register with RICS fir regulation?
- The firm provides surveying services to the public
- The firm is operating in regulated area A
- At least 50% of the firms principals are RICS members
When is a firm eligible to register for RICS?
The firm provides surveying service to the public AND at least 25% of the firms principles are RICS members
What would you do in a situation where you are not able to refuse a bribe/gift?
In the first instance always outline your firms position and reject it, if there is insistence and it would be an immediate threat to your life limb pr liberty to reject it, accept the gift and ensure you report it and record in company register and discuss with compliance manager. As a company, instruct independent lawyers to conduct an internal investigation.
What would you do if offered a gift?
RICS members should only accept gifts and hospitality that are proportionate and reasonable in terms of value and frequency. All gifts should be recorded in the firms gift register even if rejected.
Can you accept a gift or hospitality?
No. Civil servants must not accept gifts or hospitality or receive other benefits from anyone, which may reasonably be seen as compromising personal judgement or integrity.
Where can you find guidance on accepting gifts?
- Civil service management code.
- Bribery Act.
- RICS guidance note Countering Bribery and Corruption, Money Laundering and Terrorist Financing 1st Edition
Why can you not accept cash payment over €10,000
Payments over €10,000 are classed as high value payments and the firm would need to register with HMRC as a high value dealer
What are the three types of Conflict of Interest?
- Own interest conflict
- Party Conflict
- Confidential Information Conflict
Where would you find details regarding conflicts of interest?
RICS professional standard Conflicts of Interest 1st Edition 2017
How would you proceed where there is a conflict of interest?
Gain informed consent from client. Only where proceeding is in the interest of those affected and not prohibited by law.
What is a Party Conflict
Where duties owed to different clients’ conflicts or conflicts between duties owed to other parties.
What is own interest conflict?
Where your own interests may or there is significant risk, they may conflict with your duty to act in the best interest of your client.
What is a confidential information conflict?
A conflict between the duty to provide material information to a client and the duty to another client to keep that same information confidential.
What is one option to resolve a confidential information conflict or support a client in giving informed consent to a party conflict?
Information barrier. It restricts access to specific information or prevents communication between certain individuals or groups.
What is the RICS motto and what does it mean?
‘Est Modus in Rebus’ translates to ‘There is a measure in all things’
What is the mission statement of RICS?
- To qualify and equip members to provide the highest standards of professional service
- To promote and enforce standards
- To lead solutions to the major challenges facing the built environment through professional expertise
When was RICS founded?
1868 with Royal Charter being granted by Privy Council in 1881.
How is RICS structured?
Self regulated and internally monitored. Bye Laws determine how RICS is regulated. The governing council manage and agree the strategy for RICS. The regulatory board, audit committee and management board are beneath the governing council and execute the strategy set.
What are the RICS 5 principles of better regulation?
- Proportionality
- Accountability
- Consistency
- Targeting
- Transparency
What is the difference between Ethics and Rules?
Ethics are a set of moral values. Rules are a framework of conduct to adhere to.
How many Global Professional and Ethical Standards are there?
Five.
1. Act with Integrity
2. Always promote a high standard of service
3. Act in a way that promotes trust in the profession
4. Treat others with respect
5. Take responsibility
Why does RICS have Rules of Conduct?
To provide a framework to work to and ensure the client knows they are getting a set level of service. A useful guide for individual institution members.
What is the procedure for a breach in the Rules of Conduct?
- Formal investigation by the Head of Regulation.
- RICS request for information and visit to inspect/investigate compliance
- Members must cooperate fully with enquiries
How can a disciplinary procedure be triggered?
- Someone complaining to RICS
- An allegation by a client or third party
- Information received or established by RICS
What 3 actions can be imposed after investigation into breaches of the Rules of Conduct?
- Fixed Penalty
- Consent Order
- Disciplinary Panel
What is a fixed penalty?
A fine.
What are consent orders?
Written agreement between RICS and a member or firm concerning a breach of RICS rules. It outlines corrective actions or restrains them from certain activities for a specified period of time and may also include fines or costs.
When is a disciplinary panel applicable?
Serious breaches of conduct
What us a disciplinary panel?
Held after a serious breach of conduct, usually in public. The burden of proof is on the RICS a balance of probabilities approach is adopted.
When would you be expelled from the RICS?
- Gross, persistent or willful failure to comply with code of conduct.
- Fraud
- Dishonesty
- Conviction if a serious crime
- Gross incompetence
- Deliberate discrimination
- Misappropriation of client money
What procedures should you follow when starting up a new practice?
- Contact the RICS for guidance and obtain a company start-up pack
- Inform the RICS and register for regulation
- Appoint a contact officer for all RICS communication
- Prepare a complaints handling procedure
- Obtain professional indemnity insurance cover
- Abide by the Rules of Conduct for firms
- Use the designation ‘regulated by RICS’on all practice material
Can you advertise a new company in the press?
Yes, as long as it is trustful, responsible, and in line with the Rules of Conduct for Firms.
What insurance do you need to start up your own firm?
- Professional Indemnity Insurance
- Employers Liability
- Public Liability
- Building insurance of office premises
What is contained within an annual return that registered firms have to send to RICS?
- Type of business and staffing
- Nature of clients
- Training provisions
- Complaints handling procedure details and records
- PI insurance details
- Whether the firm holds client money
What processes do regulated firms need to put in place when handling Clients’ money?
- Set clear segregation of duties for employees
- Ensure a principal overseas the client money accounting functions
- Principles can not overirde controls
- Ensure competent and knowledgeable staff process client money, and there is cover for long-term absence
- Accounting systems and data must be secure
- Kept separate and identifiable
- Clients must always have access to funds
- Agree terms and advise client on bank details
- Account must not be overdrawn
- Maintain client ledgers and provide a running balance
What are the different types of client money accounts?
- General accounts for money of more than one client
- Discrete accounts referenced for a single client
What is negligence?
Failure to provide a duty of care owed to a client.
What is Merrit v Babb 2001
The case highlights the importance of run-off cover. A surveyor was sued for negligence by a former client. The surveying firm was no longer active, so the individual was pursued for damages successfully.
What must a complaints handling procedure include?
There is a RICS model form.
1. Must include a redress mechanism
2. Details of the policy should be issued to the client with the terms of engagement
3. Clear, quick, transparent, and impartial.
4. Free within the first stage
5. Names and contact details of nominated investigation person should be stated
6. Must be investigated with 28 days
7. All complaints, progress, and outcome must be stated
8. Advise PI insurers of a complaint immediately
9. Two stages as a minimum. Consideration by a senior member of the team or complaints handling officer. Referred to an independent third party with authority to reward redress.
What is an independent redress scheme?
Consumer scheme designed to handle smaller issues that would be disproportionately expensive to take to court.
What are three forms of redress schemes?
- Ombudsman
- Arbitration
- Adjudication
What would you do if you received a letter of complaint?
- Acknowledge receipt
- Forward to complaint handler as per policy and provide any additional information
- Inform PII provider
What is the client money protection scheme?
Money protection scheme operated by RICS. Contains provisions for any member of the public to be reimbursed for a direct loss of funds when using an RICS regulated firm.
How do you keep up to date with topical issues?
- Mailing lists for CPD providers
- Employers development team
- Exchanging articles with colleagues
- RICS website
- Web searches
- News outlets
What is the purpose of PII?
To provide financial cover in the event a client suffers financial loss as a result of a breach of professional duty (neglect errors or omission)
What basis is PII underwritten in the UK?
On a claims made basis. Meaning the insurance policy in place when the claim is made is responsible for providing indemnity, not the policy in place at the time of the breach.
What requirements to RICS set out for PII?
- The policy must be on an ‘each and every’ claim basis
- RICS set out a minute level of indemnity
- RICS set out maximum levels of uninsured excess
- Run off cover must be in place for at least 6 years
What is the mimum level of indemnity for PII required by RICS?
It is turnover based on the proceeding year.
£100,000 or less - £250.000 minimum
£100,001 to £200,000 - £500,000 minimum
£200,001 and above - £1,000,000 minimum
What does RICS set out as the maximum levels of uninsured excess?
Dependant on level of indemnity.
Up to and including £500,000 - greater of 2.5% or £10,000
Over £500,000 - 2.5% of the sum insured
What measures should be taken to avoid PI claims?
- Keep full and detailed records of all meetings and conversations
- Record recommendations and advice given
- Use proper terms of engagement
- Don’t advise on anything outside your field of expertise
- Use RICS guidelines
- Avoid poor management and excessive workloads
If a valuation is incorrect can a client claim damages?
An incorrect valuation itself will not provide a client with a right of redress. They must be able to demonstrate that the valuation was incorrect due to a lack of reasonable skill and care.
What are the main elements included within a fee proposal?
- Terms and conditions
- Scope of services
- Exclusions
- Assumptions
What are the 4 offences under the Bribery Act?
- Making a bribe
- Receiving a bribe
- Bribery of a foreign public official
- Failure of a corporate entity ro prevent Bribery on its behalf
Under the Bribery Act, in what circumstances is a facilitation payment permitted?
When under duress. So if there is a real or present risk to “life, limb or liberty’
How can you consider the legality of your actions and their consistency with RICS Global and Professional Ethical Standards?
Ethics Decision Tree
What is the VOA complaints handling procedure?
2 tier procedure.
1. Complaints manager will review the complaint and send a response.
2. If dissatisfied the client can request a further review by a different complaints manager
We aim to respond to T1 and T2 complaints with 20 working days.
If unhappy after Tier 2 can be escalated to indepenant Adjudicators Office if still unhappy contact MP.
What complaints to VOA deal with?
- Poor quality of service
- Unreasonable delays
- Not acted in accordance with Charter
- Did not apply policy and guidance consistently
- Have made mistakes or provided poor or misleading advice
What is the VOA charter?
Explains how we will work.to deliver a professional and expert customer service experience.
- Reliability
- Responsiveness
- Working with you
- Your rights
- Respect
- Data security
- Your feedback
What is the Civil Service Code?
Sets out the core values expected of a civil Servant set as required within Constitutional Reform and Governance Act 2010.
- Integrity
- Honesty
- Objectivity
- Impartiality
Which Act governs the requirement of a Civil Service Code?
Constitutional Reform and Governance Act 2010
Who is the President of the RICS?
Nick Maclean is the President on a temporary basis. Previously, it was Justin Sullivan.
