Ethics, Rules of Conduct and Professionalism L3 Flashcards
Role and significance of RICS and its functions –
- Globally recognised professional body to have a positive change on the built and natural environments.
- Global standards, leading professional progression and data & insight.
- Provides confident markets, better buildings to live and work and positive social impact.
What is RICS? Purpose. Motto. Founded. Countries. Members.
- Royal Institute of Chartered Surveyors.
- Leading global professional body for Land, Construction, Infrastructure and Real Estate .
- Represent individual and firm members and protect clients.
- Est modus in rebus (“There is measure in all things”).
- Founded 1868.
- 146 Countries.
- 118k Members.
Lionheart;
- Charitable foundation setup by RICS
- Supports members faced with challenging times
Matrics –
- Network within RICS supporting and developing young professional members
Royal Charter
- Awarded in 1881 by Queen Victoria.
- RICS required to promote and regulate the profession whilst protecting clients.
- Changes to profession must be ratified by the UK government via the Privy Council.
RICS Headquarters
Parliament Square, London
Why become MRICS –
- Professional credibility by becoming chartered with the most prestigious surveying organisation in the world.
- Provide assurance to clients that their best interests are fundamental to the organisation
What are the RICS Professional & Ethical Standards – (reflection on you, your firm and RICS)
- RISTR
- Respect
- Integrity; Be honest, don’t show bias or act with conflicts of interest
- Service; Advise and communicate openly (fees, scope of services, extent of expertise)
- Trust; Promote the profession positively
- Responsibility; Be accountable, be diligent, question if not right
How do you maintain professional standards?
- Training / CPD – Keep up to date with latest information
- Comply with RICS rules of conduct and guidance notes
How might a firm create an ethical environment?
- Confidential procedures for whistle blowing
- Provide access to relevant information to promote best practice (e.g. Contracts and associated guidance docs)
- Provide regular training to advise on industry changes
RICS Decision tree –
- Guidance on how to act if uncertain on an ethical situation
- e.g. Legal?
- Sufficient facts?
- Complies with rules of conduct?
- Ok if scenario is made public (Internet)
Key Ethical areas
- Gifts, bribes and hospitality
- Discrimination
- Conflicts of interest
- Money laundering
- Confidential information
How do the RICS ensure standards and quality are maintained by members? What are they?
- Rule of Conduct -ESSCCCI
- Ethics
- Service
- Solvency
- Competence
- Co-operation
- CPD
- Information (confidentiality)
Ethical Behaviour
- Act with Integrity
- Avoid conflicts of interests
Competence (Rule of Conduct Members)
- Due skill and care e.g. Checking a scale
- Diligence (comply with technical standards e.g. Quantification approach using NRM2)
Service (Rule of Conduct Members)
- Respond in a timely manner
- Uphold professional standards (Use of latest guidance e.g. NRM1)
- Be clear on extent of expertise (QS - cost advice only e.g. not an expert on planning or structures)
CPD – (Rule of Conduct Members)
- Undertake at least the minimum 20 hours of CPD and submit to RICS
- Keep up to date with industry updates and relevant legislation
- Example of recent change relevant to QS / Construction
Solvency –
- Manage personal and professional finances
- Failure to manage business finances could detrimentally impact on client through sudden loss of service
Information to RICS –
- Submit information to RICS in a timely manner (CPD deadline end of Jan)
Co-operation –
- Co-operate as required with the RICS
- e.g. If client is dissatisfied then you should engage with any info required by RICS / other parties to resolve the issue
Rules of Conduct for Firms:
General (SC)
1. Service
2. Communicate
Conduct of Business (PCCCCSI)
3. Professional Behaviour
4. Competence
5. CPD
6. Complaints
7. Clients’ money
8. Service
9. Indemnity
Admin (DAASIC)
10. Designations
11. Arrangements to cover incapacity or death
12. Advertising
13. Solvency
14. Information
15. Cooperation
Why do the RICS have Rules of Conduct?
- Consistency of service
- maintain standards,
- protect clients,
- framework for advice
What would you do if you attended an event where MRICS colleagues were behaving inappropriately?
- I would remind that that they had a duty to comply with the RICS rules of conduct.
- Could detrimentally impact clients perception of company as well as the RICS.
- Potential loss of chartership status if actions warrant it. e.g. Discrimination, criminal activity
- Report if continued despite advice
RICS Bye-Laws -
- Rules adopted for governance of the members and its regulation
- e.g. Every member shall comply with the Rules of conduct
Conduct befitting of a chartered surveyor –
- Comply with rules of conduct
- Disclose those in breach,
- Declare criminal convictions
Registration of firm
- At least 1 principal member is RICS accredited.
- Details of PI
- Complaints procedure
- Training
- Registered at Companies house
- Locum
Complaints
Expression of dissatisfaction requiring resolution/acknowledgement
- Stage 1; Client formalises complaint in writing.
- Company acknowledges in 7 days
- Company respond within 28 and notify PI.
- Stage 2; Independent review if unable to resolve
Conflicts of Interest –
- Party (Arcadis acting for both Developer and Contractor)
- Own (Development that could detrimentally impact on your house i.e. potential to compromise your impartiality)
- Information Conflicts
Approach to Conflicts:
1. Identify
2. Clearly communicate
3. Highlight potential issue
4. Offer to step down
5. Client/ all parties written instruction if wish to proceed regardless
Gifts / Bribery –
- Do not accept if could be perceived to impact impartiality.
- Hospitality acceptable (sport, dinner, travel expense).
- Accepting gifts; Value? Who for? Proportionate? Timing (tender award)?
- Could declining offend? – Bribery is a criminal offence.
Bribery Act 2010 - Who is liable? Result of conviction? Levels of seniority accountable
- Bribing, being bribed, failure to prevent bribery
- 10 year prison, unlimited fine, director disqualification.
- All levels of seniority are liable for prosecution under the act
Arcadis Bribery Policy –
- As Bribery Act 2010. Not tolerated and employees should report any suspected activity
Price Fixing Monopoly (Construction) -
- Contractors collude in response to tender returns to artificially increase prices.
e.g. Actual Tender price circa £1m
Tenders 2 & 3 submit £1.3 & 1.4
Tender 1 submits £1.2
Modern Slavery
- Bonded labour; Where someone has borrowed money and is unable to pay it and is subsequently made to work to repay the money.
- Human trafficking; people exploited to work through threat, force or fraud.
PII – Why required? Covers what? Basis of indemnity cover?
- Professional Indemnity Insurance against a claim following negligence or failure of duty of care.
- Covers legal defence and compensation.
- Indemnity level based on previous years turnover.
Indemnity –
Why required?
- Assurance for client against negligence and protection/cover for RICS member
- Cover member against loss
RICS PI Insurance requirements:
- Each and every basis (i.e. claimants aren’t subject to an annual claim limit)
- Minimum levels of cover
- Run off cover (cover should the company be wound down)
Min. Indemnity
- £0- £100k = £250k
- £100-200k = £500k
- £200k+ = £1m Limit of indemnity
- Circa 2.5-5x Turnover
Run Off Cover
– Insurance against member retirement or firm ceasing to trade.
- Claims usually in line with limitations period of contract i.e. 6 (hand) or 12 (deed) years post completion
Babb vs Merett;
- Babb (surveyor & employee) undertook valuation for Merrett
- Survey later found to be negligent.
- Company no longer existed with no run off cover in place.
- Court ruled Babb could be pursued for losses personally given the lack if run off cover to protect the client (Marett)
Aggregate -
- £1m over a year.
- If a claim has been agreed at £1m another party can’t pursue any loss until the following year
Each & every -
- £1m can be sought by every claim made.
- e.g. 3x £1m claims could be brought in one year
How best to avoid claims:
- Advise within specialism (e.g. Structural aspects, planning, etc)
- Use RICS guidelines / follow best practice
- Keep records
Cost Plan Error - Example not QS fault vs lack of care / skill
- Must be proven to have acted with a lack of reasonable skill and care
- Market conditions changing would not constitute an error as this is somethings outside of their control
- Not checking a scale resulting in gross mismeasurement could constitute a claim
Friend asks you to complete a cost plan
- Still liable for claims so approach should be the same as in a professional context
General Insurance requirements of a firm
- Professional Indemnity cover (current and sufficient)
- Public liability - Covers injury or death to public, also covers loss or damage to 3rd parties
- Employer liability - Required by all firms employing staff, Pays out if employee is injured or ill
- Locum cover
- Run off cover
Client Account –
- Clearly denoted as a client account with name.
- Clear records e.g £10k received by X Client on 1 Jan 23 for z services
- Locum access - Third party access should director become incapacitated
What are the Principles of better regulation?
PACTT:
- Proportionality
- Accountability
- Consistency
- Targeting
- Transparency
Proportionality –
- Regulators should only intervene when necessary.
- e.g. Negotiation is the first ADR approach whereby parties should seek to resolve the issue prior to incurring time and costs by involving 3rd parties
Accountability –
- Regulators must justify their decisions and be subject to public scrutiny.
Consistency –
- Common fair approach to regulation.
Targeting (Principles of better regulation)
- Focus on the problem and minimise side effects.
Transparency – Principles of better regulation
- Openly communicate regulations clearly
Disciplinary Procedures
- Receipt of info
- Investigate
- Head of Regulation; Realistic prospect
- HoR concludes if no prospect
- Commence
- Decision
- Appeal
Issues that warrant RICS Disciplinary action
- Failure to use complaints procedure
- Conflict of interest e.g. Acting in interests of opposing party
- Misuse of clients money
- Allegation of a criminal offence
- Failure to comply with rules of conduct
- CHECK APPLICABLE AS SHOULD BE PROVEN IN COURT- Negligence e.g inaccurate measurement, not challenging inflated/illegitimate contractor variation/claim
Trigger of disciplinary proceeding
- Complaint / allegation to RICS
- Information received by RICS
Consequences of guilty determination
- Fixed penalty
- Expulsion from RICS (lose chartered status)
Grounds for expulsion directly by RICS
- Failure to pay membership fees
- Failure to maintain PI
- Failure to undertake CPD
Limitations of RICS (disciplinary context)
- Discipline a non member
- Pay compensation (redress scheme)
- Determine negligence (determined in court/legal system)
Continued Professional Development (CPD) –
- Ensure you are aware of latest industry developments.
- 20 hours PA (10 formal).
- Maintain professional & ethical standards.
- Formal = structured/course/technical author.
- Informal = Self-managed private study.
- Networking not classed as CPD.
- CPD recorded annually (31 Jan) via RICS website.
What sort of CPD have you done
- Inhouse training.
- RICS training.
- Personal reading.
- Examples TBC
Future/ongoing CPD selection
– Industry changes (Construction / QS) TBC
- Prevalent/hot topics e.g. Sustainability, Grenfell
- Requirements for future projects different to existing projects. e.g. Data centres (New Client)
Current RICS Structure
- Privy Council
- Governing Council
2.1 Regulatory Board - Sub Boards
3.1 Audit
3.2 Nominations
3.3 Admin
3.4 Leadership
3.5 Management Board
3.5.1 Finance
3.5.2 World Regional
3.5.3 Remuneration
Privy Council
- Grants and awards Royal Charter on behalf of the UK government
- Approve changes to the BYE LAWS
Governing Council
- Direct the RICS strategy (Increase membership, increase revenue e.g. Training, maintain standards)
- Management of royal charter obligations (Promote and regulate profession whilst protecting clients)
What is the Regulatory Board (RICS Structure)?
- Reports solely to the governing council on its activities
- Manages RICS regulation
- Chaired by non member to demonstrate independence
Management Board
- Day to day performance and delivery of the business plan set by the Governing Council
Presidential Team
- Elected by governing council.
- Provide leadership of issues facing the organisation
- Ann Gray 1 January 2023
President
President Elect ??
- Ann Gray; 1 January 2023
- ??