Ethics General Flashcards
1
Q
What is the meaning of the RICS Motto? ‘Est Modus in Rebus’
A
There is measure in all things
2
Q
What is the mission statement of the RICS?
A
-to qualify and quit members to offer the highest standards of professional service
- to promote and enforce standard
- to lead solutions to major challenges facing the built environment through professional expertise
3
Q
When was the RICS founded?
A
1868
4
Q
How is the RICS structured?
A
Founded in 1868
Royal charter in 1881
RICS is self regulated and internally monitored meaning that it is now regulated by the government or other parties
The bye-laws determine how the RICS is regulated
The governing council manage and agree the strategy for the RICS
The regulatory board, Audit committee and the management board are beneath the governing council and execute the strategy set by them
5
Q
What are the RICS 5 principles for better regulation?
A
- Proportionality
- Accountability
- Consistency
- Targeting
- Transparency
6
Q
What are the difference between the RICS ethics and rules?
A
Ethics are moral values
Rules of conduct and a framework that we work to
7
Q
What are the RICS rules of conduct?
A
Rule 1. Members and firms must be honest, act with integrity and comply with their professional obligations, including to the RICS
Rule 2. Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
Rule 3. Members and firms must provide good quality and diligent service.
Rule 4. Members and firms must treat others with respect and encourage diversity and inclusion
Rule 5. Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.
8
Q
Why did the Rules of conduct change?
A
- the previous rule had been in practice since 2007
- research and consultation with RICS members, firms and members of the public, the majority voted in favour of replacing the rules
- this was to provide a single document to provide greater clarity for RICS members and firms
- I also understand there is now a greater focus on clear example behaviours, understanding evolving technologies and tackling climate change
9
Q
What are the professional obligations of members?
A
- Members must comply with the CPD requirements set by the RICS which requires 20 hours for each calendar year, of which 10 must be formal
- Members must cooperate with RICS
- Members must promptly provide all information reasonably requested by the Standards and regulation board or those delegated authority
10
Q
What are the professional obligations of firms?
A
- Firms must publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log.
- Firms must ensure that all previous and current professional work is covered by adequate and
appropriate professional indemnity cover that meets the standards approved by RICS.
- Firms must ensure that all previous and current professional work is covered by adequate and
- Firms with a sole principal must make appropriate arrangements for their professional work to
continue in the event of their incapacity, death, absence from or inability to work.
- Firms with a sole principal must make appropriate arrangements for their professional work to
- Firms must cooperate with RICS.
- Firms must promptly provide all information reasonably requested by the Standards and Regulation
Board, or those exercising delegated authority on its behalf.
- Firms must promptly provide all information reasonably requested by the Standards and Regulation
- Firms must display on their business literature, in accordance with RICS’ published policy on
designations, a designation to denote that they are regulated by RICS.
- Firms must display on their business literature, in accordance with RICS’ published policy on
- Firms must report to RICS any matter that they are required to report under the Rules for the Registration of Firms.
11
Q
Please explain the steps of the RICS Ethics Decision Tree?
A
- Do you have sufficient facts?
- Is it illegal?
- Does it breach the Rules of Conduct?
- Have you consulted the appropriate people?
Do you have clear reasoning for the decision? - Would you be content if your decision was made public?
12
Q
Why does the RICS have Rules of Conduct?
A
- To provide a framework that we can all work to and so the client knows he is getting a set level of
service. - As well as being an important tool for the Institution, the Rules of Conduct are also a useful
professional guide for individual institution members.
13
Q
How would you approach a friend that is a chartered surveyor and is found to be working outside the rules of conduct?
A
- approach and confront the person. Advise them they are in breach of the rules and reminding him of his duties to the RICS
- report the issue to the RICS notifying them of the relationship to the person and set out the agreed process for remediating the issue
14
Q
In the case of a breach of a rule of conduct what is the procedure?
A
- Not every shortcoming will necessarily give rise to proceedings.
- A formal investigation by the Head of Regulation of the RICS is the first step in the process.
- The RICS can request information and/or visit and inspect to investigate compliance.
- Members must cooperate fully with all enquiries.
15
Q
How can a disciplinary proceeding be triggered?
A
- Someone complaining to the RICS.
- An allegation by a client or third party.
- Information received or established by the RICS.
16
Q
What three actions can be imposed after the end of the investigation
stage?
A
- Fixed penalty.
- Consent order.
- Disciplinary panel
17
Q
What are fixed penalties?
A
- A fine by the RICS.
18
Q
What are consent orders?
A
- It is a written agreement between the RICS and a member or firm concerning a disciplinary issue on a
breach of the RICS rules. - It can require the member to take certain corrective actions, or restrain them from taking certain actions
for a specified period of time and may require them to pay a fine or costs
19
Q
When is a disciplinary panel applicable?
A
- They are used for more serious breaches of conduct.
- The panel will usually be held in public.
- The burden of proof is on the RICS.
- A balance of probabilities approach will be adopted.
20
Q
What sort of breaches would expulsion be suitable for?
A
- Gross, persistent or willful failure to comply with an RICS rule of conduct.
- Fraud, dishonesty, conviction of a serious criminal offence, gross incompetence, deliberate
discrimination, misappropriation of a client’s money.
21
Q
What procedures must you follow if you are starting up a new
practice?
A
- Contact the RICS for guidance and obtain a company start up pack.
- Inform the RICS and register for regulation.
- Appoint a contact officer for all RICS communication.
- Prepare a complaints handling procedure.
- Obtain Professional indemnity insurance cover.
- Abide by the Rules of Conduct for Firms.
- Use the designation ‘Regulated by RICS’ on all practice material
22
Q
Would you advertise your new company in the press?
A
- Yes as long as it is in a trustful and responsible manner in line with the Rules of Conduct for Firms
23
Q
What insurances would you need if you were starting up your own firm?
A
- Professional Indemnity Insurance.
- Employer’s Liability.
- Public Liability.
- Building’s insurance of an office premises.
24
Q
What sort of information do registered firms have to send to the RICS
annually?
A
- It is called annual return and carried out on-line.
- Failure to do so leads to a fixed penalty.
- It includes:-
o Type of business and staffing.
o Nature of clients.
o Training provision.
o Complaints handling procedures details and records.
o PI insurance details.
o Whether the firm holds clients’ money.
25
What processes do regulated firms need to put in place when handling Clients' Money?
* Preserve the security of clients' money which does not belong wholly to the company.
* RICS regulated firms that operate a client account must:-
o Set clear segregation of duties for employees.
o A Principal oversees the client money accounting functions.
o Principles cannot override controls.
o Competent and knowledgeable staff are to process clients' money with cover provided for long
term absence.
o Accounting systems and data must be secure.
o Client money must be kept separate and clearly identifiable with the word ‘client’ included in
the bank account name.
o Clients must always have access to funds.
o We must agree the terms and advise the client on bank details.
o The account must not be overdrawn.
o We must maintain client ledgers and provide a running balance.
26
What are the different types of client money accounts?
* General accounts hold money for more than one client.
* Discrete accounts reference a single named client.
27
What is meant by the term Negligence?
* A duty of care is owed to all clients and 3rd parties using reasonable skill and care.
* If it is breached due to Negligence a claim may arise resulting in damages being paid or a Professional
Indemnity Insurance claim.
* Negligence is a failure to provide the duty of care that is owed to the client.
28
Tell us about the Merrit V Babb case law?
* This case dates back to 2001 and highlights the importance of having run-off cover in place.
* A surveyor was sued for negligence by a former client.
* Because the surveying firm was no longer in existence therefore the individual surveyor was pursued
for damages successfully.
* This caused a big shock in the industry and highlighted the need to ensure that run-off cover is in place
for all previous employees.
29
What limitation periods are associated with underhand and deed forms of contract?
* 6 years when executed under hand.
* 12 years when executed as a deed.
30
What must a complaints handling procedure include?
* The RICS provides a model form.
* The process must include a redress mechanism.
* Details of the policy should be issued to the client with the Terms of Business.
* It must be clear, quick, transparent and impartial and free of charge within the first stage.
* Names and contact details of the nominated investigating person must be stated.
* The complaint must be investigated within 28 days.
* All complaints, their progress and outcomes must be recorded.
* We must note the need to advise PI insurers of a complaint immediately.
* The process must have two stages as a minimum:-
o Stage 1 is where there needs to be consideration of the complaint by a senior member of the
firm or the complaints handling officer.
o Stage 2 if the issue is not resolved, the complaint is referred to an independent third party with
the authority to award redress. The complainant may be expected to contribute towards costs
at this stage.
31
What is an independent redress scheme?
* It is a consumer scheme designed to handle small issues that would be disproportionally expensive to
take to court.
* If the scheme judges in favour of the complainant, it is binding.
* If it judges in favour of the firm, the complainant can escalate the matter to court.
* RICS firms must specify which redress scheme they want to use, it could be an ombudsman,
arbitration or sometimes adjudication.
* If the complaint relates to a large amount of money or if the complainant wishes so, he can take the
matter to court.
32
What do you do if you receive a letter of complaint?
* I would acknowledge receipt and I would forward it to my firms designated complaint handler, as per
our complaint handling procedure, providing additional information as required.
* I would also highlight the importance of informing our Professional Indemnity insurance providers
immediately.
33
What is the ‘Clients’ Money Protection Scheme’?
* This is a money protection scheme operated by the RICS.
* It contains provision for any member of the public to be reimbursed their direct loss of funds when
using an RICS regulated firm.
* This is provided through an RICS insurance policy.
34
What is the purpose of the joint names on a client account?
* For the purpose of dual authorisation.
35
What are the continuous professional development (CPD)
requirements?
* Members must undertake and record appropriate lifelong learning.
* On request by the RICS they must provide evidence that they have carried out the CPD to maintain
and improve their levels of professional competence.
36
How many hours must you do?
* A minimum of 20 hours CPD must be achieved per calendar year, of which a minimum 10 hours must
be formal.
* Members must undertake learning on the standards expected around RICS Ethics on a rolling 3-year
period.
* All CPD’s must be recorded via the RICS on-line management system
37
What sorts of activities are included in formal CPD?
* It must have a clear learning objective relevant to my role to count as CPD.
* Formal CPD can be classed as web based training with structured assessments, formal seminars,
providing training to others where research and preparation is required.
* Informal CPD is classed as private reading, internal CPD’s and on the job shadowing.
38
How do you differentiate between the different categories of CPD?
RICS decision tree for formal or informal
- Does the activity focus on a topic relevant to the wider profession, or your, role or specialism?
- Does the activity have a formally structured program?
- Do the learning objectives or outcomes enhance your current knowledge or develop technical skills?
- Does the learning involve interaction with other such as professors / trainers, or other professionals in the real or virtual classroom-like or conference setting?
39
What types of articles do you read?
* My employer’s research & development team send us weekly digests of the relevant press and I request
copies of articles of interest.
* I also read the RICS journals (Modus, Construction Journal, RICS regional magazine).
* I also keep up to date via the RICS website, Building Magazine, Estates Gazette and BCIS updates.
40
What recent article have you read?
RICS modus - impact that the building safety act has had on the construction industry.
41
How do you keep up to date with topical issues?
* I am on the mailing list for several CPD providers.
* My employer’s research & development team send us weekly digests of the relevant press and I request
copies of articles of interest.
* I also exchange industry articles and relevant information with colleagues.
* I follow updates on the RICS website and Construction Journals
* I undertake regular web research on key topics relevant to my field of surveying.
42
What is your CPD strategy
* I meet with my manager twice a year to review my career development plan and objectives.
* I build my CPD strategy around these objectives, current topics and personal interests.
* The candidate should try to explain their own personal objectives to address this question.
43
What is the purpose of Professional Indemnity Insurance?
* To provide financial cover in the event a client suffers financial loss as a result of a breach of
professional duty e.g. neglect, errors or omissions
44
What benefits does PI provide for the professional?
* The professional is protected from financial losses.
* The firm does not have to meet the claim from their own assets and resources
45
What benefits does PI provide for the client?
* They are able to recover their financial losses.
46
On what basis is PI underwritten in the UK?
* On a claims made basis.
47
Which policy is liable for cost borne which was caused before a change in policy but is discovered after?
* The insurance policy that is in place at the time the breach is discovered is responsible for providing the
indemnity, not the insurance policy in place when the breach was made.
48
What are the requirements regarding Professional Indemnity
Insurance set by the RICS?
* The policy cover must be made on an ‘each and every’ claim basis.
* The RICS sets out the minimum levels of indemnity.
* The RICS sets out the maximum levels of uninsured excess.
* Run off cover must be in place for at least 6 years.
* The policy should include cover for past and present employees, directors and partners.
49
What are the new RICS minimum levels of indemnity and Maximum
levels of uninsured excess?
Under £100k = £250k minimum
£100k to £200k = £500k minimum
over £200k = £1m
Up to including £500k indemnity- 2.5% or £10k greater
Above £500k 2.5%
50
Minimum levels of uninsured excess?
Firm turnover in preceding year of £10m or less = The greater of 2.5% of the sum insured or £10,000
Turnover over £10m - No limit set
51
What measures should be taken to try and avoid PI claims?
* Keep full and detailed records of meetings and conversations.
* Record recommendations and advice given.
* Use proper letters of engagement, scope of services and terms of engagement.
* Don’t advise on a specialism outside your field of experience.
* Use RICS guidelines.
* Avoid poor management and excessive workloads.
52
If you made a mistake in your cost plan what would your insurance
company expect?
* For you to notify them and comply with any conditions & procedures set out in the insurance policy.
53
If an estimate prepared by a QS is incorrect can the client claim
damages?
* An estimate that is incorrect in itself will not provide the client with a right of redress.
* The client must demonstrate that the QS warranted the accuracy of the estimate or that it was incorrect
due to a lack of reasonable skill and care.
* It could have been incorrect due to reasons outside their control for example market conditions or an
item referred to in their exclusions.
54
How can you limit your liability when agreeing terms of appointment
with a client?
* Base the appointment on reasonable care and skill rather than fitness for purpose which is more
onerous.
* If the client’s requirements are performance based, this may imply fitness for purpose. It is advisable to
request a clause limiting the appointment to reasonable skill and care only.
* Run off cover must be in place.
* Execution of the appointment under hand will result in a reduced liability period of 6 years instead of
12.
55
What are the main elements included within a fee proposal?
* Terms and conditions.
* Scope of services.
* Exclusions.
* Assumptions.
56
If you put together a fee proposal, but a couple of months into the job
you realise that you have under forecasted your resources, would you
go back to the client and ask for more money?
* If project requirements such as the services, scope or value of the project has increased then I would go
back to client and request a fee increase.
* If the scope of works had remained the same, this highlights a mistake within our fee bid and the
additional work would need to be carried out without reducing the level of service being offered and
without requesting additional fees from the client
57
Once you and your client agreed the services that are to be provided
verbally what would you do next?
* Follow up with a formal letter which includes the terms and conditions, fees and scope of services that
are to be provided.
58
If the client gives you a lump sum fee before going on holiday, what
would you do?
* I would place the funds in a separately identified client account and agree a drawdown of monies
against the services being provided with the client.
59
Tell me what you understand about conflicts of interest?
* A conflict of interest is where someone in a position of trust has competing personal or professional
interests making it difficult for them to fulfil their duties impartially.
* An existing relationship will result in reduced impartiality and Chartered Surveyors have an obligation
to make clients aware of this and if necessary, decline work opportunities where a conflict of interest
occurs.
60
How could the conflict of interest be managed internally if two
separate departments were working for the same client?
* I could put in place procedures to ensure exclusivity of staff.
* This would avoid any cross over of information between the departments.
* I would also ensure that there are separate communication lines into the client.
* Separate geographical locations and secure office and data storage would also need to be provided.
* Staff could also sign up to confidentiality or non-disclosure agreements.
* I would also need to monitor the potential conflict and keep the client updated on progress
61
If the client was insistent that you worked for them despite an existing
conflict of interest, how would you proceed?
* I would check the clients understanding around the conflict of interest.
* I would then make the client aware of the potential for reduced impartiality.
* If they were still insistent on the appointment, I would seek a letter of instruction from the client to
continue.
* Following the appointment I would agree working procedures to manage the conflict of interest with
the client and the teams involved
62
What are the Main Principles of the Bribery Act?
* The offences are:-
o Making a bribe.
o Receiving a bribe.
o Bribery of a foreign public official.
o Failure of a corporate entity to prevent bribery on its behalf
* The legislation applies to all UK Entities and includes associated Persons for example sub-consultants
and external advisors.
* There are six principles of prevention companies should put in place:-
o 1. Proportionate Procedures.
o 2. Top Level Commitment.
o 3. Risk Assessments.
o 4. Due Diligence.
o 5. Communication.
o 6. Monitoring & Review.
63
Under the Bribery Act, under what circumstance is a facilitation
payment permitted?
* The only circumstance in which it is OK to make a facilitation payment is when you are under duress.
* For example if there is a real and present risk or danger to "life, limb or liberty".
* If you or your companions are under immediate physical threat.
* You should put safety first, make the payment and report the matter immediately.
* Or as soon as is practicable to your manager or your ethics compliance contact
64
You are attending a Main Contractor organised business conference
where it is announced the you have been randomly selected as the
winner of this months prize draw. Its an i-pad air. How would you act
in this scenario?
* I would be extremely uncomfortable accepting the prize in this scenario.
* The prize is of a significant value and could be interpreted as a bribe.
* Furthermore due to working on a project with the Main Contractor at the time of this scenario,
accepting the prize would have been highly inappropriate and could be interpreted as having an affect
on my business conduct during the project.
* I would respectfully decline the prize and suggest that this is made as a charitable donation to a charity
of the Main Contractor’s choice.
* I am aware that bribes are commonly distributed as random prizes and due to the seriousness of this
incident I would report this to my line manager
65
You receive an invite to attend the Theatre with some members of
your Project Team but they dropped out due to illness at the last
minute, would you still attend?
* In the first instance I would declare this hospitality on my companies’ gifts and hospitality register.
* Assuming the invite was approved and I was authorised to attend, I would need to decline the invite
due to the Project Team dropping out.
* Since they won't be present, this will not be a genuine business event.
* Consequently, I would decline this hospitality at the Project Team's expense
66
A contractor invites you to lunch to a restaurant and advises they've
got two Michelin stars and a wine list second to none. They say they
are keen to discuss the details of their tender they are about to submit
for the project you are working on. How would you respond?
* Going to what sounds like a lavish lunch paid for by a bidder in the middle of a tender process is
against Company policy and could be an offence under the UK Bribery Act.
* If this were the first time, it would be OK just to decline and explain that such an invitation is
inappropriate.
* However if this supplier is persistent, there is a red flag in that he wants to discuss things that he cannot
put in writing, so we should report this infringement
67
What are the RICS Bye-Laws (2020)?
Law 1 - Application and definitions
Law 2 - Membership and registration
Law 3 - Designations
Law 4 - Contributions to funds
Law 5 - Conduct
Law 6 - Governing Council, Officers and Staff
Law 7 - Subordinate boards, committees and groups
Law 8 - Procedure for general meetings
Law 9 - Accounts and audit
Law 10 - General
-
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