Ethics, Rules of Conduct and Professionalism

Question 1

Are you aware of some of the aims highlighted within the RICS Business plan 2021 - 22?

Answer 1

The RICS stated they will:

• Continue to support the profession as economies recover from COVID-19 and seek to minimize and increases in cost of subscription levels.
• Utilize any surplus in cash generation to pay back furlough monies received via the UK governments coronavirus job retention scheme.
• Maintain an increase demand for RICS qualification with a primary goal to ensure RICS qualification remain relevant for future generations and that an increased number of member’s use RICS to meet their knowledge and training needs.

Question 2

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

Answer 2

The RICS has ‘Rules of Conduct’ which came into effect on the 2nd February 2022

this overhaled and combined the pervious

• Rules of Conduct for Members
• Rules of Conduct for Firms
• Global Professional and Ethical Standards

Question 3

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

Answer 3

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.

Question 4

Please list the Rules of Conduct (effective 2nd Feb 2022)

Answer 4

Rule 1 - Members and firms must be honest, act with integrity and comply with their professional obligation, including obligations to the RICS.

Rule 2 - Members and firms must maintain their professional competence and ensure that services are provided by competence 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 other 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.

Question 5

Explain your understanding of Rule number 1?

(Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to the RICS)

Answer 5

12 Example behaviors;

1.1 - Members and firms do not mislead other by their actions or omissions, or by being complicit in the actions or omissions of others.

1.2 - Members and firms do not allow themselves to be influenced improperly by others (as a result of giving or receiving work referrals, gifts, hospitality or payments) or by their own self interest.

1.3 - Members and firms identify actual and potential conflicts of interest throughout a professional assignment and do not provide advice or service where a conflict of interest or a significant risk of one arises, unless they do so in accordance with the current edition of Conflict of Interest (RICS professional statement).

1.4 - Firms have effective processes to identify actual and potential conflict of interest, to enable appropriate decision to be made on whether to accept work, and to keep records of decisions made about actual and potential conflicts of interest.

1.5 - Members and firms providing advice and opinion in a professional context do so honestly and objectively based on relevant and reliable evidence, and firms have processes to ensure that directors, partners and employees do so.

1.6 - Members and firms are open and transparent with clients about their fees and services.

1.7 - Members and firms act to prevent others being misled about their professional opinion.

1.8 - Members and firms do not take unfair advantage of others.

1.9 - Members and firms protect confidential information and only use or disclose it for the purposes for which it was provided, where they have the necessary consent to do so or where required or permitted by law.

1.10 - Firms keep client money safe and have appropriate accounting controls.

1.11 - Members do not misuse client money and comply with controls intended to keep it safe.

1.12 - Members and firms do not facilitate any financial crime including money laundering, tax evasion, bribery or corruption. Firms have effective processes to prevent directors, partners or employees from doing so.

Question 6

Please give example behaviors of Rule 2

(Members and firms are must maintain professional competence and ensure that services are provided by competent individuals and have the necessary expertise)

Answer 6

Example Behaviors;

2.1 Members and firms only undertake work that they have the knowledge, skills and resources to carry out competently.

2.2 Members and firms supervise any employees undertaking work for them and ensure that these employees have the necessary knowledge, skills and resources to do their tasks competently.

2.3 Members and firms check that subcontractors have the necessary knowledge, skills and resources to do their tasks competently.

2.4 Members and firms reflect on the work they have undertaken and its impacts, and consider how they might apply what they have learned to their future work.

2.5 Members maintain and develop their knowledge and skills throughout their careers. They identify development needs, plan and undertake continuing professional development (CPD) activities to address them and are able to demonstrate they have done so. Firms encourage and support directors, partners and employees to maintain and develop their knowledge and skills, and check that they are complying with CPD requirements set by RICS.

2.6 Members and firms stay up to date and comply with relevant legislation, codes of practice and other professional and relevant technical standards. Firms ensure that their directors, partners and employees do so.

Question 7

Please provide example behaviors of Rule 3?

(Members and Firms must provide good-quality and diligent service)

Answer 7

Example Behaviors;

3.1 Members and firms understand clients’ needs and objectives before accepting any professional work.

3.2 Members and firms agree with clients the scope of the service to be provided and its limitations, and timescales for the work.

3.3 Firms inform clients that they are regulated by RICS and that they may need to disclose records to RICS where required for regulatory purposes.

3.4 Members and firms inform clients promptly and seek their agreement if it is proposed that any of the terms of engagement or estimated fees or costs be changed.

3.5 Members and firms undertake their work in a timely manner; with due care, skill and diligence, and in accordance with RICS technical standards

3.6 Members and firms communicate to clients the material information on which their professional advice and opinion is based.

3.7 Members and firms communicate with clients and others clearly and in a way they can understand.

3.8 Members and firms ensure that any referral or introduction they make for a client is in the best interests of the client and inform clients about any financial or other benefits to the member or their firm from a referral or introduction.

3.9 Members and firms keep proper records of their work and decisions in enough detail to allow them to answer questions from clients and to allow their work to be audited for quality assurance or regulatory purposes.

3.10 Members and firms, when advising clients about projects, encourage solutions that are sustainable in that they minimize harm and deliver balanced economic, social and environmental benefits.

3.11 Members and firms understand the risks and benefits of using relevant technology.

3.12 Members and firms check that all data used is accurate and up to date, is kept securely, and that they have proper legal rights to use it and, where required, share it.

3.13 Firms have effective quality assurance processes for their work.

Question 8

Please provide examples behaviors of Rule 4?

(Members and firms must treat other with respect and encourage diversity and inclusion)

Answer 8

Example behaviors:

4.1 Members and firms respect the rights of others and treat others with courtesy.

4.2 Members and firms treat everyone fairly and do not discriminate against anyone on any improper grounds, including age, disability, gender reassignment, marriage or civil partnership, pregnancy or maternity, race, religion or belief, sex or sexual orientation.

4.3 Members and firms do not bully, victimize or harass anyone.

4.4 Firms check that supply chains do not involve modern slavery or other abuses of the workforce.

4.5 Members and firms report abusive labor practices to proper and recognized authorities if they become aware of, or suspect, them

4.6 Members and firms work cooperatively with others.

4.7 Members and firms develop an inclusive culture in their workplaces, support equal access and opportunity for all, and identify and address unconscious bias.

Question 9

Please provide example behaviors of 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)

Answer 9

Example behaviors:

5.1 Members and firms question practices and decisions that they suspect are not right, and raise concerns with colleagues, senior management, clients, RICS or any other appropriate person, body or organization where they believe in good faith that it is necessary to do so. Firms provide processes to allow and support individuals within the firm to raise concerns with senior management.

5.2 Members and firms support directors, partners, employees, colleagues or clients who have acted in good faith to report concerns.

5.3 Members and firms ensure that public statements made by the firm, or in which members are (or could be) identified as members of the profession, do not undermine public confidence in the profession.

5.4 Members and firms respond to complaints made against them promptly, openly and professionally.

5.5 Members and firms do not dissuade complainants from approaching an alternative dispute resolution provider, RICS or any other regulatory body.

5.6 Members and firms cooperate with investigations into complaints or concerns, and provide information where it is reasonably requested and they can do so lawfully.

5.7 Members consider the effect that any health conditions may have on their competence or ability to undertake professional work, and inform management or clients where they require reasonable adjustments or are unable to continue to undertake work competently.

5.8 Members and firms manage their professional finances responsibly.

5.9 Members and firms take appropriate action when they consider that the rules
have been breached, and report suspected significant breaches of the Rules of Conduct by themselves or others to RICS.

Question 10

What are the professional obligations must members carry out?

Answer 10

1. Members must comply with the CPD requirements set by RICS.
2. Members must cooperate with RICS.
3. Members must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.

These are all mandatory obligations for RICS members.

Question 11

What professional obligations must RICS-regulated firms comply with?

Answer 11

1. Firms must publish a complaints-handling procedure, which includes an alternative dispute resolution provider approved by RICS, and maintain a complaints log.
2. 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.
3. 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.
4. Firms must cooperate with RICS.
5. Firms must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
6. 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.
7. Firms must report to RICS any matter that they are required to report under the Rules for the Registration of Firms.

Question 12

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?

Answer 12

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

Question 13

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

Answer 13

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

Question 14

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

Answer 14

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.

Question 15

What is the RICS ‘Black Book’?

Answer 15

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

Question 16

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

Answer 16

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.

Question 17

What are the 5 ethical standards?

Answer 17

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

Question 18

Can you explain how you act with integrity?

Answer 18

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.

Question 19

Can you explain how you take responsibility?

Answer 19

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

Question 20

Can you explain how you treat others with respect?

Answer 20

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.

Question 21

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

Answer 21

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.

Question 22

Can you explain how to promote trust in the profession?

Answer 22

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.

Question 23

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

Answer 23

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.

Question 24

What should employers to do create an ethical environment?

Answer 24

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.

Question 25

Why is it important to act with integrity?

Answer 25

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

Question 26

What is the difference between ethics and integrity?

Answer 26

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

Question 27

What tools are available to help members make ethical decisions?

Answer 27

Decision tree

Question 28

Wat sort of decision would you consult the tree about?

Answer 28

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

Question 29

What are the key areas where ethics are important?

Answer 29

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

Question 30

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?

Answer 30

1. Potential conflict of interest
2. Not working to the ethical standards by promising more than you can deliver

Question 31

Are you aware of any rules associated with registering a Firm with RICS?

Answer 31

Yes, the RICS has produced ‘Rules for the Registration of Firms 1st April 2020’.

Question 32

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

Answer 32

1. (Rule 4.1a) the Firm provides surveying services to the public and,
2. (Rule 4.2b) the Firm has 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

Question 33

What do you need to do to set up a firm?

Answer 33

• Fill in firm details form
  -Appoint a contact officer for RICS communication
• Register for regulation with RICS
• Professional Indemnity Insurance
• Pay fees for regulation
• Client’s money obligations
• Complaint’s Handling Procedure/complaints log/Complaints handling officer
  -Correct use of designations
• Staff development and training
• At least one of the principles must be a professional member of the RICS (not a student or trainee)
• If over 50% of a firm are RICS members then you HAVE to be regulated by the RICS

Question 34

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

Answer 34

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.

Question 35

What is a locum?

Answer 35

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.

Question 36

What are the insurance requirements for RICS regulated firms?

Answer 36

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

Question 37

What does CPD stand for?

Answer 37

Continued Professional Development

Question 38

What are the CPD requirements for chartered surveyors?

Answer 38

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.

Question 39

How is CPD recorded?

Answer 39

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.

Question 40

How do you define between formal and informal CPD?

Answer 40

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

Question 41

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

Answer 41

CPD decision tree

Question 42

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

Answer 42

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

Question 43

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

Answer 43

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

Question 44

How do you keep up to date with topical issues?

Answer 44

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

Question 45

Can you accept a gift from the client or contractor?

Answer 45

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

Question 46

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

Answer 46

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?

Question 47

Can you explain what a conflict of interest is?

Answer 47

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.

Question 48

Has RICS published any information on conflicts of interest?

Answer 48

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

Question 49

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

Answer 49

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.

Question 50

Can you give examples of a conflict of interest?

Answer 50

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

Question 51

What is informed consent?

Answer 51

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

Question 52

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

Answer 52

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)

Question 53

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?

Answer 53

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.

Question 54

What is a bribe?

Answer 54

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

Question 55

What is the Bribery Act 2010?

Answer 55

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

Question 56

What are the 6 principles of the Bribery Act?

Answer 56

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.

Question 57

Who does the Bribery Act 2010 apply to?

Answer 57

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

Question 58

What is your position for compliance with the Bribery Act?

Answer 58

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

Question 59

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

Answer 59

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

Question 60

What is money laundering?

Answer 60

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.

Question 61

What do you do if you suspect money laundering?

Answer 61

1. Raise the matter with my director.
2. Submit suspicious activity report (SAR) to the National Crime Agency.

Question 62

What regulations are associated with money laundering?

Answer 62

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

Question 63

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?

Answer 63

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.

Question 64

What is corruption?

Answer 64

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.

Question 65

What is a price fixing cartel?

Answer 65

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.

Question 66

What is terrorist financing?

Answer 66

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

Question 67

What is a facilitation payment?

Answer 67

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.

Question 68

What is modern slavery?

Answer 68

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.

Question 69

What is the relevant legislation?

Answer 69

Modern Slavery Act 2015.

Question 70

Can you give some examples of modern slavery ?

Answer 70

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.

Question 71

How would you report modern slavery?

Answer 71

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

Question 72

Has RICS published any information on PII requirements?

Answer 72

Professional indemnity insurance requirements, this regulation and therefore mandatory.

Question 73

What is PI insurance?

Answer 73

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.

Question 74

What does the RICS say about PI insurance for firms?

Answer 74

All firms must be covered by PI insurance.

Question 75

What are the reasons PI insurance is needed?

Answer 75

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.

Question 76

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

Answer 76

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.

Question 77

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

Answer 77

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.

Question 78

What are the limits of indemnity?

Answer 78

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

Question 79

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

Answer 79

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

Question 80

What measures should be taken to avoid PII claims?

Answer 80

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.

Question 81

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

Answer 81

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.

Question 82

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.

Answer 82

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.

Question 83

What is PI insurance run-off cover?

Answer 83

‘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.

Question 84

How long should run-off cover be in place?

Answer 84

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