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RICS APC Revision > Ethics, Rules of Conduct and Professionalism > Flashcards

Ethics, Rules of Conduct and Professionalism Flashcards

1
Q

How do the RICS ensure that standards and quality are maintained in terms of both the conduct and advice provided by chartered surveyors?

A

RICS has rules of conduct for members and firms.

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2
Q

Please give your opinion on why the RICS have rules of conduct?

A
  1. Consistency of service and approach, maintaining professional standards, governance and regulation.
  2. Rules will help members to act in a professional capacity and to deliver a robust, ethical and proper service
  3. Rules maintain and promote the usefulness of the profession for public advantage.
  4. Consistency - chartered professionals work to the same rules and regulation.
  5. The public and RICS expect an MRICS to behave in line with the objectives of the charter and provide clients with the most appropriate advice for their circumstances.
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3
Q

What are the rules of conduct for members?

A
  1. Interpretation - Refers to full and non-chartered members.
  2. Communication - Post, fax, e-mail, phone, in person.
  3. Ethical behaviour
  4. Competence
  5. Service
  6. CPD
  7. Solvency
  8. Information to RICS
  9. Co-operation
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4
Q

What are the rules for firms?

A
  1. Interpretation
  2. Communication
  3. Professional behaviour
  4. Competence
  5. Service
  6. Training and CPD
  7. Complaints handling
  8. Clients’ money
  9. Indemnity
  10. Advertising
  11. Solvency
  12. Arrangements to cover the incapacity or death of a sole practitioner
  13. Use of designations
  14. Information to RICS
  15. Co-operation
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5
Q

You attend a work social event and witness two junior colleagues acting in a way that could bring the firm into disrepute. What should you do?

A

Try to speak to your colleagues immediately and address their actions formally in work.

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6
Q

RICS professional standards - What are the types of standards and what is their status?

A
  1. Professional statements
  2. Guidance notes
  3. APC
  4. Data standards
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7
Q

Why do we have guidance notes. Do you have to follow them?

A

Guidance notes outline best practice within the profession and provide advice to surveyors on how to complete certain activities. They should be followed; members should remain up to date to ensure they are competent. If there is ever a professional negligence claim and a member has not followed a guidance note, the courts may review these to determine whether the member has acted competently.

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8
Q

What is the RICS ‘Black Book’?

A

The ‘Black Book’ is a suite of guidance notes that define good technical standards for quantity surveying and construction professionals.

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9
Q

What is the status of the professional statement? What sanctions may RICS take if you fail to apply it?

A
  1. The document provides members with mandatory requirements or a rule that a member or firm is expected to adhere to.
  2. It will say that a member must do something to signify that it is mandatory. If you do not comply, you can be given a written warning as a caution or if the case is severe, you can be expelled from RICS membership.
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10
Q

What are the 5 ethical standards?

A
  1. Members and firms must be honest, act with integrity and comply with their professional obligations, including 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
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11
Q

Can you explain how you act with integrity?

A
  1. Being trustworthy in all that I do.
  2. Being open and transparent in the way I work.
  3. Respecting confidential information.
  4. Not taking advantage.
  5. Not allowing bias, conflict of interest or the undue influence of others to override my decisions and actions
  6. Not offering or accepting gifts, hospitality, or services, which might suggest an improper obligation.
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12
Q

Can you explain how you take responsibility?

A
  1. Be accountable for all my actions.
  2. Always act with skill, care and diligence.
  3. Ensure an appropriate complain handling procedure is in place in the event somebody makes a complaint about me.
  4. If I think something is not right, I am prepared to respectfully challenge and raise the matter with colleagues
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13
Q

Can you explain how you treat others with respect?

A
  1. I treat everyone with courtesy, politeness and respect.
  2. I am always polite and considerate to clients, potential clients and everyone else.
  3. I never discriminate against anyone for any reason.
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14
Q

Can you explain how you provide a high standard of service?

A
  1. I always ensure my client, or others to whom you have a professional responsibility, receive the best possible advice, support, or performance of the terms of engagement I have agreed to.
  2. Acting within my scope of competence.
  3. Be transparent about fees and any other costs or payments such as referral fees or commissions.
  4. Communicate with my client in a way that will allow them to make informed decisions.
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15
Q

Can you explain how to promote trust in the profession?

A
  1. Understanding how my actions will affect others and the environment.
  2. Fulfilling my obligations
  3. Always trying to meet the spirit of my professional standards and not just the letter of the standards
  4. Acting in a trustworthy manner in both my professional and private life.
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16
Q

Explain what an individual should do to maintain a high ethical standard in their profession?

A
  1. Keep their own actions under review, inside and outside of work
  2. Maintain a level of knowledge and training appropriate to their area of works.
  3. Maintain CPD.
  4. Follow advice given by professional bodies on ethical behaviour.
  5. Help their own organisations to develop ethical ways of working.
  6. Noting any unethical behaviour by others and address where appropriate.
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17
Q

What should employers to do create an ethical environment?

A
  1. Establish confidential procedures for ‘whistle blowing’, independent of the normal chain of command.
  2. Include ethical evaluations into formal performance appraisals.
  3. Include ethical standards in employee hiring, employment contracts and training.
  4. Make sure there is adequate planning, training and ethical performance monitoring where implementing change.
  5. Become chartered with RICS.
  6. Promoting CPD in the relevant area.
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18
Q

Why is it important to act with integrity?

A
  1. I am representing both myself and the profession and want others to view me in the best possible light
  2. Acting with integrity is also one of the 5 ethical standards
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19
Q

What is the difference between ethics and integrity?

A
  1. Ethics are moral principles that govern a person’s behaviour or the conducting of an activity.
  2. Integrity is the quality of being honest and having strong moral principles
    3 Put simply, ethics looks at the big moral picture while integrity is focused on personal characteristics
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20
Q

What tools are available to help members make ethical decisions?

A

Decision tree

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21
Q

Wat sort of decision would you consult the tree about?

A
  1. The decision tree provides step-by-step practical advice on how to deal with any ethical issue that you might face as a professional.
  2. You can take certain steps and ask questions to ensure that you deal with potentially difficult situations in an objective and measured manner
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22
Q

What are the key areas where ethics are important?

A
  1. Gifts, bribes, hospitality and inducements
  2. Equal opportunity, discrimination and sexual harassment
  3. Conflicts of Interest.
  4. Insider dealing, money laundering, disclosure of confidential information, financial transactions and fair competition
  5. Whistle blowing in case of anyone raising an unethical issue.
  6. Copyright and ownership of files.
  7. Standards in advertising
  8. environmental protection, relations with local communities, political and social behaviour
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23
Q

After receiving inside information about a competitor’s quote, you consider altering your terms to win a commission. You realise that you may be promising more than you can deliver. What are the key points you should consider?

A
  1. Potential conflict of interest

2. Not working to the ethical standards by promising more than you can deliver

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24
Q

What preconditions does a firm ned to meet to be ‘Regulated by RICS’?

A
  1. Offer profession services in surveying disciplines to professional, corporate, institutional and other clients who rely on such services.
  2. Have at least 25% principals who are qualified by RICS professionals
  3. Agree to observe and comply with RICS Rule of Conduct for Firms, including working to RICS standards
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25
Q

Once a firm has been registered for regulation, what does the firm need to do to comply?

A
  1. Comply with the Rules of Conduct for Firms.
  2. Act in accordance with the obligations set out in RICS’ Royal Charter and byelaws.
  3. Inform the Head of Regulation of any finding against it by any disciplinary or regulatory body, court, or statutory authority.
  4. Inform the Head of Regulation of any finding of insolvency against the firm.
  5. Notify the Head of Regulation within seven days if there is a material change regarding the firm and provide full details.
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26
Q

What is a locum?

A

A firm which has a sole principal to have in place appropriate arrangements in the event of that sole principal’s death or incapacity or other extended absences. A locum is effectively another professional who is appointed to ‘stand in’ for the surveyor if they are unable to work.

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27
Q

What are the insurance requirements for RICS regulated firms?

A

RICS regulated firms must have professional indemnity insurance (PII) that meets RICS minimum requirements. Alongside PII you will also need:

  1. Public liability.
  2. Buildings insurance.
  3. Employers liability cover.
  4. Directors and officer’s cover.
  5. Contents insurance
  6. Business interruption insurance
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28
Q

What does CPD stand for?

A

Continued Professional Development

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29
Q

What are the CPD requirements for chartered surveyors?

A
  1. All members must undertake a minimum of 20 hours each calendar year.
  2. At least 10 hours must be formal CPD.
  3. All members must maintain a relevant and current understanding of RICS professional and ethical standards during a rolling three-year period.
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30
Q

How is CPD recorded?

A
  1. Can be recorded on the RICS website or by the app.

2. Members must record their CPD activity online by January 31st every year.

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31
Q

How do you define between formal and informal CPD?

A

Formal - Structured learning that has clear learning objectives and outcomes:
1. Professional courses
2. Structured online training.
3. Learning that includes an assessment measure.
Informal - Self-managed learning that is relevant or related to your professional role:
1. Private study
2. On the job training.
3. Attendance to informal seminars or events

32
Q

What tools are available to determine if CPD is formal or informal?

A

CPD decision tree

33
Q

What sort of professional development have you done during your training period?

A
  1. In house training
  2. External training courses.
  3. Personal reading of relevant articles.
  4. Mock final interviews.
  5. Seminars and lectures
34
Q

How will you go about selecting CPD subjects over the next 12 months?

A
  1. Consider weak and limited areas of my knowledge.
  2. Consider ‘hot topics’ that may be relevant for the next 12-18 months.
  3. Consider future projects and/or project requirements
35
Q

How do you keep up to date with topical issues?

A
  1. RICS website and journals
  2. I am on the mailing list for CPD providers
  3. Discussions with colleagues
  4. I regularly read construction related news.
  5. I keep in touch with my employer’s research & development
36
Q

Can you accept a gift from the client or contractor?

A
  1. I would not accept gifts, hospitality, or services, which might suggest an improper obligation.
  2. However, gifts and hospitality can be accepted in some circumstances, the key is to consult the ethics decision tree and make an informed decision
37
Q

What things would you consider when assessing if a gift is appropriate?

A
  1. What is the value of the gift or hospitality?
  2. Is the gift or hospitality offered at an appropriate time? Is the offer presented just before tender award for example?
  3. Is it proportionate to the working relationship?
  4. Will the gift effect my ability to act impartially?
  5. It is proportionate to gifts being offered to others.
  6. Who is the gift or hospitality being given to? Is it just one person or a range of people from different organisations?
  7. Is it in line with the RICS ethical standards?
38
Q

Can you explain what a conflict of interest is?

A

A conflict of interest is anything that impedes an individual’s or firm’s ability to act impartially and in the best interest of a client.

39
Q

Has RICS published any information on conflicts of interest?

A
  1. Conflict of interest RICS professional statement, March 2017.
  2. The professional statement became effective January 2018
40
Q

Can you name 3 types of conflict outlined in the 2017 professional statement?

A
  1. Party conflict - A situation in which the duty of an RICS member or firm, acts in the interest of a client on a professional assignment, conflicts with a duty owed to another client.
  2. Own interest conflict - A situation in which the duty of an RICS member or firm, acts in the interests of a client in a professional assignment, conflicts with the interests of the same RICS member/firm
  3. Confidential information conflict - A conflict between the duty of an RICS member or firm, to provide material information to one client and the duty of that RICS member/firm to another client to keep that same information confidential.
41
Q

Can you give examples of a conflict of interest?

A
  1. Acting for both a developer and a contractor
  2. Acting for two competing developers/contractors.
  3. Have other obligations or pressures that detract you from or affect your relationship with the client
42
Q

What is informed consent?

A

This is where an RCS member has highlighted to all parties who are or may be affected that there is a conflict of interest of risk of a conflict, but those parties willingly give consent to them continuing in their role. This can only be sought once the RICS member is satisfied that proceeding is:

  1. in the interests of all those who are or may be affected.
  2. Is not prohibited by law
43
Q

What action should you take if a conflict of interest arises?

A

As soon as you are aware, disclose to client in writing, the possibility and nature or conflict. Advise client in writing you cannot continue to represent unless:

  1. Parties feel they can act 100% impartiality
  2. The client finds it acceptable and approves, in writing, the specific conflict handling arrangement put in place (informed consent)
44
Q

You are instructed to work on a proposed development that would require the removal of a nature reserve. You have very strong views on protecting the environment. What should you do?

A
  1. Ask myself the question ‘could I work on the project without bias?’
  2. Notify the client of a potential conflict of interest.
  3. I may need to respectfully decline the commission and offer up somebody else in the business who could work on the commission without bias or conflict of interest.
45
Q

What is a bribe?

A

An inducement or reward offered, promised, or provided to gain any commercial, contractual, regulatory, or personal advantage.

46
Q

What is the Bribery Act 2010?

A

The Bribery Act 2010 covers criminal law relating to bribery. The Act contains four main bribery offences:

  1. General offence of bribing
  2. General offence of being bribed
  3. Offence of bribing a foreign public official
  4. Corporate offence of failing to prevent bribery by persons associated with relevant commercial organisations
47
Q

What are the 6 principles of the Bribery Act?

A
  1. Proportionality - The action taken should be proportionate to the risk and the size of the organisation
  2. Top level commitment - Those in senior positions are best placed to ensure the organisation conducts business without bribery.
  3. Risk Assessment - Many organisations will have little or no risk of bribery, but a risk assessment will show the nature or extent of exposure to bribery
  4. Due Diligence - This is about having a risk-based approach to business relationships - with those you deal with or who provide services for you.
  5. Communication - Employers will need to communicate their policies and procedures to staff and others who perform services, additional training may hep raise awareness.
  6. Monitoring and Review - Risks to your organisation may change, over time you may want to carry out regular reviews and re-assessments.
48
Q

Who does the Bribery Act 2010 apply to?

A

The Bribery Act 2010 applies to people in both the private and public sector.

49
Q

What is your position for compliance with the Bribery Act?

A
  1. My company has an anti-bribery and corruption policy which applies to me as an employee, I strictly follow the procedures in the policy.
  2. I would report any act of bribery to the Serious Fraud Office or National Crime Agency
50
Q

What are the potential consequences for not adhering to the Bribery Act?

A
  1. There is a maximum penalty of 10 years’ imprisonment and/or an unlimited fine for individuals.
  2. Corporate face an unlimited fine.
51
Q

What is money laundering?

A
  1. Money laundering is the illegal process of making large amounts of money generated by a criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source.
  2. Money from the criminal activity is considered dirty, the process “launders” it to make it look clean.
52
Q

What do you do if you suspect money laundering?

A
  1. Raise the matter with my director.

2. Submit suspicious activity report (SAR) to the National Crime Agency.

53
Q

What regulations are associated with money laundering?

A

The Money Laundering and Terrorist Financing (Amendment) Regulation 2019.

54
Q

A client asks you to take responsibility for making interim payments to the contractor. The client gives you half a million pounds in cash to make the payments. What would you do in this situation?

A
  1. I would not accept the cash; I would encourage the client to pay the cash into a bank account (the responsibility falls onto the bank to check the legitimacy of the cash).
  2. If I had concerns about the source of the money (from an illegal activity for example), I would report to the National Crime Agency.
55
Q

What is corruption?

A
  1. Corruption is a form of dishonesty or criminal offense undertaken by a person or organisation entrusted with a position of authority.
  2. Usually, to acquire illicit benefit or abuse power for one’s private gain.
56
Q

What is a price fixing cartel?

A

A group of formally independent producers (of goods or services) whose goal it to increase their collective profits by pushing the price of a product as high as possible.

57
Q

What is terrorist financing?

A

The solicitation, collection, or provision of funds with the intention to support terrorist acts or organisations.

58
Q

What is a facilitation payment?

A
  1. A payment made to a public or government official that acts as an incentive for the official to complete some action or process expeditiously, to the benefit of the party making the payment.
  2. For legal purposes, it is distinguished from bribery, although the distinction is often blurred.
59
Q

What is modern slavery?

A
  1. Modern slavery is the severe exploitation of other people for personal or commercial gain.
  2. People being forced to work against their will or illegally.
60
Q

What is the relevant legislation?

A

Modern Slavery Act 2015.

61
Q

Can you give some examples of modern slavery ?

A
  1. Forced labour - any work or services which people are forced to do against their will under the threat of some form of punishment
  2. Debt bondage or bonded labour - The world’s most widespread form of slavery, when people borrow money, they cannot repay and are required to work to pay off the debt
  3. Human trafficking - involves transporting, recruiting, or harbouring people for the purpose of exploitation, using violence, threats, or coercion.
  4. Child slavery - Child slavery occur when a child’s labour is exploited for someone else’s gain. It can include child trafficking, child soldiers, child marriage and child domestic slavery.
  5. Forced and early marriage - when someone is married against their will and cannot leave the marriage. Most child marriages can be considered slavery.
62
Q

How would you report modern slavery?

A

Report to the Home Office or call the modern slavery helpline.

63
Q

Has RICS published any information on PII requirements?

A

Professional indemnity insurance requirements, this regulation and therefore mandatory.

64
Q

What is PI insurance?

A
  1. An insurance product designed for professional firms and people which covers the in the event of certain errors made during their business.
  2. The policies available mainly cover professional negligence, errors or omissions, breach of professional duty and civil liabilities.
65
Q

What does the RICS say about PI insurance for firms?

A

All firms must be covered by PI insurance.

66
Q

What are the reasons PI insurance is needed?

A
  1. Ensure that if the firm faces a claim, it is protected from financial loss that it cannot meet from its own resources.
  2. Protect the insured member or firm against the consequences of its liability to pay damages to third parties for breaches of professional duty that it commits through its professional activities.
  3. Ensure that the firm’s clients do not suffer financial loss, which the firm cannot meet.
67
Q

What is the difference between an ‘any one claim’ and an ‘aggregate’ policy?

A
  1. ‘Any one claim’ and ‘aggregate’ refer to the basis of cover on a professional indemnity policy.
  2. An ‘any one claim’ policy provides cover up to full limit for each individual claim made in the period of insurance, whereas an ‘aggregate’ policy provides cover up to the full limit for all claims made in the period of insurance.
68
Q

Tell me about Merrett v Babb? (Court case in 2001)

A
  1. Babb had done a valuation as an employee of a company for a house purchased by Merrett.
  2. Valuation later found to be negligent.
  3. The original company no longer existed and the PII had been cancelled.
  4. Court ruled Merrett could pursue the individual - Babb - for the losses.
69
Q

What are the limits of indemnity?

A
  1. £100k or less Turnover = £250k minimum indemnity limit
  2. £100,001 to £200k turnover = £500k minimum indemnity limit
  3. £200,001 and above = £1,000k minimum limit of indemnity
70
Q

What is the maximum level of uninsured excess? (the part the firm must pay)

A
  1. Up to and including £500k = The greater of 2.5% of the sum insured, or £10k
  2. £500k+ = 2.5% of the sum insured
71
Q

What measures should be taken to avoid PII claims?

A
  1. Keep full and detailed records of meetings, conversations etc.
  2. Record recommendations and advice given.
  3. Use proper letters of engagement, appointment contracts and follow scope of service.
  4. Do not advise on a specialism outside of your field of experience/knowledge.
  5. Follow RICS guidance and professional statements.
  6. Avoid poor management and excessive workloads
  7. Follow RICS rules of conduct.
  8. Follow company procedures and policy.
72
Q

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

A
  1. To notify them ASAP
  2. Comply with any conditions / procedures set out in the insurance policy.
  3. Advise the client.
  4. Assess the level of mistake and take steps for correcting.
73
Q

Assuming you are MRICS, how would you deal with the following situation…A friend asks for our help on a private house extension, they ask for technical advice, for free, outside business hours.

A
  1. My firm’s professional indemnity insurance would not cover me for private advice; therefore, I would politely decline to provide.
  2. I would also need to consider a potential conflict of interest.
  3. I would suggest the friend contacts the firm I work for, in business hours, to discuss potential commission.
74
Q

What is PI insurance run-off cover?

A

‘Run off’ is a form of professional indemnity insurance which covers the historic liabilities of a business after it ceases to trade. Any claims made under the policy will relate to work carried out before trading stopped, so it covers legacy issues.

75
Q

How long should run-off cover be in place?

A

RICS would expect run-off on this basis to be maintained for a minimum period of 6 years from the cessation of the practice.

RICS APC Revision (19 decks)

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