Ethics, RoC & Professionalism

Question 1

What is the meaning of the RICS Motto?

Answer 1

The motto is “Est Modus in Rebus”, which in Latin translates to “There is measure in all things”.

Question 2

What is the Mission Statement of the RICS?

Answer 2

1 - To qualify and equip their members to offer the highest possible standards of professional service.
2 - To promote and enforce standards.
3 - To lead solutions to the major challenges facing the built environment through professional expertise.

Question 3

When was the RICS founded?

Answer 3

RICS was founded in 1868

Question 4

How is the RICS structured?

Answer 4

1 - The RICS is self-regulated and internally monitored, meaning that it is not regulated by the government or external parties.
2 - The bye-laws determine how the RICS is regulated.
3 - The governing council manage and agree the strategy for the RICS.
4 - The regulatory board, audit committee and management board are beneath the governing council and execute the strategy set out by them.

Question 5

What are the RICS 5 principles of better regulation?

Answer 5

1 - Proportionality
2 - Accountability
3 - Consistency
4 - Targeting
5 - Transparency

Question 6

What is the difference between RICS ethics and rules?

Answer 6

Ethics are a set of moral values, whereas the rules are a framework that we work to.

Question 7

How many Global Professional and Ethical Standards are there?

Answer 7

From 2nd February 2022 onwards, each have been consolidated within the New Rules of Conduct 2022. Previously there were 5 of each.

Question 8

What are the New Rules of Conduct?

Answer 8

1 - Members and firms must be honest, act with integrity, and comply with their professional obligations, including their obligations to RICS.
2 - Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
3 - Members and firms must provide good quality and diligent service.
4 - Members and firms must treat others with respect and encourage diversity and inclusion.
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.

Question 9

Why did the previous Rules of Conduct change?

Answer 9

Following research and consultation with members and the public, it was voted that a single document should be provided to enable greater clarity for RICS members and firms.
The aim was to also provide greater emphasis on clear example behaviors, understanding evolving technology and tackling climate change.

Question 9

What are the professional obligations for members?

Answer 9

1 - Members must comply with CPD requirements set out by RICS which require 20 hours of CPD for each calendar year - 10 hours of which must be formal.
2 - Members must co-operate with RICS.
3 - Members must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegating authority on their behalf.

Question 10

What three actions can be imposed after the end of the investigation stage?

Answer 10

1 - Fixed Penalty
2 - Consent Order
3 - Disciplinary Panel

Question 11

What are the fixed penalties?

Answer 11

A fine by the RICS.

Question 12

What are Consent Orders?

Answer 12

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 a 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.

Question 13

When is a disciplinary panel applicable?

Answer 13

More serious breaches of conduct.
The panel will usually be held in public and the burden of proof will be on the RICS. A balance of probabilities approach will be adopted.

Question 14

What sort of breaches would expulsion be suitable for?

Answer 14

1 - Gross, persistent or willful failure to comply with a RICS rule of conduct.
2 - Fraud, dishonesty, conviction of a serious criminal offence, gross incompetence, deliberate discrimination, misappropriation of a clients money.

Question 15

What procedures must you follow if you are starting up a new practice?

Answer 15

1 - Contact RICS for guidance on a company start-up pack.
2 - Inform RICS and register for regulation.
3 - Appoint a contact officer for all RICS communication.
4 - Prepare a complaints handling procedure.
5 - Obtain PII cover.
6 - Abide by the Rules of Conduct for Firms.
7 - Use the designation ‘Regulated by RICS’ on all practice material.

Question 16

Would you advertise your new company in the press?

Answer 16

Yes, as long as it’s in a trustful and responsible manner in line with the Rules of Conduct for Firms.

Question 17

What insurance would you need if you were starting up your own firm?

Answer 17

1 - Professional Indemnity Insurance.
2 - Employers Liability
3 - Public Liability.
4 - Buildings insurance on an office premises.

Question 18

What sort of information do registered firms have to send to the RICS annually?

Answer 18

The annual return is carried out online. Failure to do so leads to a fixed penalty.
1 - Type of business and staffing.
2 - nature of clients.
3 - Training provision.
4 - Complaints handling procedures details and records.
5 - PI insurance details.
6 - Whether the firm holds clients money.

Question 19

What processes do regulated firms need to put in place when handling clients money?

Answer 19

Preserve the clients money which does not belong wholly to the company.
1 - Set clear segregation of duties for employees.
2 - A Principal oversees the client money accounting functions.
3 - Principles cannot override controls.
4 - Competent and knowledgeable staff are to process clients money, with cover provided for long term absence.
5 - Accounting systems and data must be secure.
6 - Client money must be kept separate and clearly identifiable with the word “client” included in the bank account name.
7 - Clients must always have access to funds.
8 - We must agree the terms and advise the client on bank details.
9 - The account must not be overdrawn.
10 - We must maintain client ledgers and provide a running balance.

Question 20

What are the different types of client money accounts?

Answer 20

1 - General Accounts - Hold money for more than 1 person.
2 - Discrete Accounts - Reference a single named client.

Question 21

What is meant by the term Negligence?

Answer 21

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 damaged being paid or a Professional Indemnity claim.
Negligence is a failure to provide the duty of care that is owed to the client.

Question 22

What is the Merrit v Babb case law?

Answer 22

The 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 the individual surveyor was pursued for damages successfully. It caused a big shock in the industry and highlighted the need to ensure that run-off cover is in place for all previous employees.

Question 23

What limitation periods are associated with underhand and deed forms of contract?

Answer 23

6 years when executed underhand.
12 years when executed as a deed.

Question 24

What must a complaints handling procedure include?

Answer 24

1 - The RICS provides a model form.
2 - The process must include a redress mechanism.
3 - Details of the policy should be issued to the client within the Terms of Business.
4 - It must be clear, quick, transparent and impartial, and free from charge within the first stage.
5 - names and contact details of the nominated investigating person must be stated.
6 - The complaint must be investigated within 28 days.
7 - All complaints, their progress and outcomes must be recorded.
8 - We must note the need to provide PI insurers of a complaint immediately.
9 - The process must have two stages as a minimum. Firstly where it is considered by a senior member of the firm. Secondly, where not resolved, to an independent 3rd Party with authority to award redress.

Question 25

What is an independent redress scheme?

Answer 25

1 - A consumer scheme designed to handle small issues that would be disproportionally expensive to take to court.
2 - If the scheme judges in favour of the complainant it is binding.
3 - If it judges in favour of the firm, the complainant can escalate the matter to court.
4 - RICS firms must specify which redress scheme they want to use, it could be an ombudsman, arbitration, or sometimes adjudication.
5 - If the complaint relates to a large amount of money, or if the complainant wishes, he can take the matter to court.

Question 26

What do you do if you receive a letter of complaint?

Answer 26

1 - Acknowledge receipt and forward to my firms designated complaints handler, as per the complaints handling procedure, providing additional information as required.
2 - Highlight the importance of informing the PI insurer immediately.

Question 27

What is the ‘Clients Money Protection Scheme’?

Answer 27

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 a RICS regulated firm.
This is provided through an RICS insurance policy.

Question 28

What is the purpose of the joint names on a client account?

Answer 28

For the purpose of deal authorisation.

Question 29

What are the CPD requirements?

Answer 29

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.

Question 30

How may hours must you do?

Answer 30

Minimum 20 hours CPD must be achieved per calendar year, of which 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 online management system.

Question 31

What sort of activities are included?

Answer 31

It must have a clear learning objective relevant to my role to count as CPD.
Formal CPD can be classed as web based learning 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.

Question 32

What recent article have you read from the RICS?

Answer 32

Specific to the candidates own reading.
Be sure to have a couple of articles in mind that you are able to talk through with the assessors.

Question 33

How do you keep up to date with topical issues?

Answer 33

I am on the mailing list for several CPD providers.
Employer research and development team send weekly digests of the relevant press.
By exchanging industry articles and relevant information with colleagues.
I follow updates on the RICS website and Construction Journals.
Undertake regular web searches on key topics relevant to my field of surveying.

Question 34

What is your CPD strategy?

Answer 34

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.

Question 35

What does PII stand for?

Answer 35

Professional Indemnity Insurance.

Question 36

What is the purpose of professional indemnity insurance?

Answer 36

To provide financial cover in the event the client suffers financial loss as a result a breach of professional duty (eg. neglect, errors or omissions).

Question 37

What benefits does it provide for the professional?

Answer 37

The professional is protected from financial losses
The firm does not have to meet the claim from their own assets and resources.

Question 38

What benefits does it provide the client?

Answer 38

They are able to recover their financial losses?

Question 39

On what basis is PII underwritten in the UK?

Answer 39

On a claims made basis. This is where the insurance policy that is in place a the time the breach is discovered is responsible for providing the indemnity, not the policy which was in place when the breach was made.

Question 40

What are the requirements regarding PII set by the RICS?

Answer 40

1 - The policy must be made on an ‘each and every’ claim basis.
2 - The RICS sets out the minimum levels of indemnity.
3 - The RICS set out the maximum levels of uninsured excess.
4 - Run-off cover must be in place for at least 6 years.
5 - The policy should include cover for past and present employees, directors and partners.

Question 41

What are the minimum levels of PII required?

Answer 41

Firm turnover up to £100,000 - Minimum limit is £250,000
Firm turnover between £100,000 - £200,000 - Minimum limit is £500,000
Firm turnover £200,000 upwards - Minimum limit is £1,000,000

Question 42

What are the maximum levels of uninsured excess (in relation to PII)?

Answer 42

Firm turnover in the preceding year £10,000,000 or less - the greater of 2.5% of the sum insured, or £10,000.
Firm turnover in the preceding year £10,000,001 or more - No limit set.

Question 43

What measures should e taken to try and avoid PI claims?

Answer 43

1 - Keep full and detailed records of meetings and conversations.
2 - Record recommendations and advice given.
3 - Use proper letters of engagement, scope of services and terms of engagement.
4 - Don’t advise on a specialism outside of your field of experience.
5 - Use RICS guidelines.
6 - Avoid poor management and excessive workloads.

Question 44

If you made a mistake in your cost plan what would your insurance company expect?

Answer 44

For you to notify them and comply with any conditions and procedures set out in the insurance policy.

Question 45

If an estimate provided by a QS is incorrect can the client claim damages?

Answer 45

An estimate that is incorrect in itself will not provide the client 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 of their control, such as market conditions or an item referred to in their exclusions.

Question 46

How can you limit your liability when agreeing terms of appointment with a client?

Answer 46

1 - Base the appointment on reasonable care and skill rather than fitness for purpose which is more onerous.
2 - If the clients 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.
3 - Run-off cover must be in place.
4 - Execution of the appointment underhand will result in a reduced liability period of 6 years instead of 12.

Question 47

What are the main elements included within a fee proposal?

Answer 47

1 - Terms and conditions.
2 - Scope of services
3 - Exclusions
4 - Assumptions

Question 48

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?

Answer 48

If project requirements such as the services, scope or value of the project has increased then I would go back the client and ask for 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.

Question 49

Once you and your client agreed the services that are to be provided verbally what would you do next?

Answer 49

Follow up with a formal letter which includes the terms and conditions, fees, and scope of services that are to be provided.

Question 50

If the client gives yo a lump sum fee before going on holiday, what would you do?

Answer 50

I would place the funds in a separately labelled client account and agree a drawdown of moneys against the services being provided with the client.

Question 51

Tell me what you understand about conflicts of interest.

Answer 51

A conflict of interest is where someone in a position of trust has competing professional and personal interests making it difficult for them to fulfill 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.

Question 52

How could the conflict of interest be managed internally if two separate departments were working for the same client?

Answer 52

1 - Procedures could be put in place to ensure exclusivity of staff. This would avoid any cross over of information between the departments.
2 - Ensure separate communication lines into the client.
3 - Separate geographical locations and secure office and data storage would also need to be provided.
4 - Staff could sign up to confidentiality or non-disclosure agreements.
5 - Monitor for any potential conflict and keep the client updated on progress.

Question 53

If the client was insistent that you worked for them despite an existing conflict of interest, how would you proceed?

Answer 53

1 - I would check the clients understanding around the conflict of interest.
2 - I would then make the client aware of the potential for reduced impartiality.
3 - If they were still insistent on the appointment, I would seek a letter of instruction from the client to continue.
4 - Following the appointment I would agree working procedures to manage the conflict of interest with the client and the teams involved.

Question 54

What are the main principles of the Bribery Act?

Answer 54

The offences are making a bribe, receiving a bribe, bribery of a foreign public official, and 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.
The six principles of prevention for companies to have in place are:
1 - Proportionate procedures.
2 - Top level commitment.
3 - Risk assessments.
4 - Due diligence.
5 - Communication.
6 - Monitoring and review.

Question 55

Under the Bribery Act, under what circumstances is a facilitation payment permitted?

Answer 55

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 clear and present 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 practicable to your manager or ethics compliance contact.

Question 56

You are attending a Main Contractor organised business conference where it is announced that you have been randomly selected as the winner of this months prize draw. It is an iPad Air. How would you act in this scenario?

Answer 56

Due to the reasonably significant value of the prize I would respectfully decline and suggest the prize be offered to a charity of the Main Contractors choice.
It is important to not be seen as being in receipt of any offerings which may interfere with carrying out an impartial professional service.

Question 57

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?

Answer 57

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 as since they won’t be present this will not be a genuine business event.

Question 58

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?

Answer 58

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 to just decline and explain that such an invitation is inappropriate. However, is this supplier is persistent there is a red flag that thy would like to discuss things which cannot be but in writing, so we should report this infringement.