Ethics, Rules of Conduct and Professionalism

Question 1

How does the RICS ensure standards of professional conduct and practice are upheld?

Answer 1

RICS Rules of Conduct implemented through Bye-Laws and the regulation of firms

Question 2

Please list the Rules of Conduct

Answer 2

1. Be honest, act with integrity, and comply with professional and RICS obligations
2. Maintain professional competence and ensure services are provided by competent individuals with the necessary expertise
3. Provide a high-quality and diligent service
4. Treat others with respect and encourage diversity and inclusion
5. Act in the public interest, take responsibility for your actions and act to prevent harm

Question 3

Provide 5 examples behaviours to comply with the RICS Ethics Rule 1 (Honesty & integrity)

Answer 3

• Do not mislead others by their actions or omissions, or being complicit in the actions of others
• Have an effective process to manage and keep a record of actual and potential conflicts of interest
• Be open and transparent with clients regarding fees and services
• Do not take unfair advantage of others
• Do not facilitate any financial crime including money laundering, tax evasion, bribery, or corruption

Question 4

Provide 5 examples behaviours to comply with the RICS Ethics Rule 2 (Professional competence for self and others)

Answer 4

• Only undertake work when you have the appropriate knowledge, skills, and resources
• Supervise any employees and ensure they have the appropriate knowledge, skills, and resources
• Reflect on employee’s work, what they’ve learned and how it can be improved
• Develop their knowledge through CPD
• Stay up to date with current legislation, code of practice, and other technical standards

Question 5

Provide 5 examples behaviours to comply with the RICS Ethics Rule 3 (High quality and diligent service)

Answer 5

• Understand the client’s needs and objectives before accepting work
• Agree on the scope of service with the client including limitations and timescales
• Communicate effectively
• Understand the risks and benefits of technology
• Establish effective quality assurance processes

Question 6

Provide 5 examples behaviours to comply with the RICS Ethics Rule 4 (Treat others with respect and encourage diversity)

Answer 6

• Respect the rights of others and treat others with courtesy
• Do not bully, victimise or harass anyone
• Do not involve firms engaged in modern slavery or other workforce abuse
• Work cooperatively with others
• Develop an inclusive culture and support equal opportunities

Question 7

Provide 5 examples behaviours to comply with the RICS Ethics Rule 5 (Act in the public interest, take responsibility, act to prevent harm, and maintain public confidence)

Answer 7

• Support colleagues who acted in good faith to report concerns
• Respond to complaints promptly and professionally
• Do not dissuade complaints from approaching an ADR provider
• Manage professional finances responsibly
• Take appropriate action when rules have been breached, and report suspected significant breaches of the Rules of Conduct to RICS

Question 8

Are you aware of any RICS Regulation on the use of social media accounts?

Answer 8

• Use of social media: guide for RICS members. Version 1 - effective from 30 June 2021
• Standards do not change to what is expected in face-to-face interactions

Question 9

What is the bribery act 2010? 

Answer 9

The bribery act covers criminal law relating to bribery. This contains four main bribery offences:
- bribing another person
- being bribed
- bribing a foreign public official
- failure by commercial organisation to prevent bribery

Question 10

What are the six principles of the bribery act?

Answer 10

Proportionality - The action taken should be proportionate to the risk and size of the organisation.

Top level commitment - Those in senior positions are best place to ensure the organisation conduct business without bribery.

Risk assessment - Many organisations will have little or no risk of bribery a risk assessment will show the nature or extent of exposure to bribery.

Due diligence - Due diligence procedures must be applied taking a proportionate and risk based approach with regards to individuals who perform or will perform services on behalf of the organisation.

Communication - Employers will need to communicate their policies and procedures to staff and others who perform services, additional training may help raise awareness.

Monitoring and review - as an overarching principle organisation should monitor and review procedures designed to prevent bribery by persons associated with it and make improvements where necessary.

Question 11

List the core professional obligations for members and firms in the Rules of Conduct

Answer 11

Members:
- Comply with CPD requirements
- Cooperate with RICS
- Provide all information requested by the Standards and Regulation Board

Firms:
- Cooperate with RICS
- Provide all information requested by the Standards and Regulation Board
- Publish a complaints handling procedure, which includes an RICS-approved alternative dispute resolution provider, and maintain a complaints handling log
- Cover all past and current work using the appropriate professional Indemnity cover that meets the RICS standards
- Sole principles must make arrangements for their professional work to continue in the event of their incapacity, death, or absence from work
- Business literature must include a designation note that RICS regulates them
- Report any matters required under the RICS Rules for the Registration of Firms

Question 12

Are you aware of the RICS Regulation on the use of social media accounts?

Answer 12

Use of social media: guidance for RICS members. Version 1 - 30 June 2023
- Standards expected of members do not change because they are communicating online rather than face-to-face

Question 13

Why does RICS publish guidance notes and do Chartered Surveyors have to follow them?

Answer 13

• 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 competence. If there is ever a negligence claim and a member has not followed a guidance note, the courts or the adjudicator may review these to determine whether the member has acted competently

Question 14

What is the ‘Black Book’?

Answer 14

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

Question 15

Are you aware of any regulation in association with the use of the RICS logo by regulated firms and Chartered Professionals?

Answer 15

• Rules for the use of the RICS logo and designation by firms
• Guidelines for the personal use of the RICS logo and designation by professionals

Question 16

Can you clarify what an individual should do to maintain a high ethical standard in their profession?

Answer 16

• Keep their own actions under review, inside and outside of work
• Maintain CPD appropriate in their area of work (e.g. applicable law and regulations)
• Follow advice given by professional bodies on ethical behaviour
• Help their own organisation to develop ethical ways of working
• Noting any unethical behaviour by others and addressing with the individual where appropriate

Question 17

What can employers do to create an ethical environment?

Answer 17

• Establish confidential procedures for ‘whistle blowing’, independent of the normal chain of command
• Include ethical evaluations in formal performance appraisals
• Include ethical standards

Question 18

What is the difference between ethics and integrity?

Answer 18

• Ethics are moral principles that govern behavior or the conducting of an activity
• Integrity is the quality of being honest and having strong moral principles and values

Put simply, ethics looks at the big moral picture while integrity is focused on personal characteristics

Question 19

What tools produced by RICS are available to help members make ethical decisions?

Answer 19

RICS ethics decision tree.

Basic questions:
- Do you have sufficient facts on the issue?
- Is it legal?
- Is it in line with RICS Rules of Conduct?
- Have you consulted the appropriate people to make an informed decision?
- Do you have clear reasoning in reaching your decision?

Question 20

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

Answer 20

Rules for the registration of firms - Version 8 2 February 2022

Question 21

When is a firm required to register for regulation?

Answer 21

A firm is required to register for regulation by RICS if:
a) The firm provides surveying services to the public
b) The firm is operating in Regulated Area A (UK)
c) At least 50% of the Firm’s Principals are RICS Members

Question 22

In which circumstances are Firms eligible to register for regulation?

Answer 22

Rule 4.1 - A firm is eligible to register for regulation by RICS if:
a) The firm provides surveying services to the public and
b) At least 25% of the Firm’s Principals are RICS Members

Rule 4.2 - A firm is also eligible to register for regulation by RICS if it meets the requirements of Rules 4.1 (a); and either:
a) The Head of Regulation is satisfied that the Firm is implementing an appropriate plan to secure compliance with Rule 4.1 (b) within a reasonable period of time or;
b) The Head of Regulation is satisfied that the Firm is appropriately supported and supervised by another RICS-registered Firm or Firms that fulfil the requirements

Question 23

What is a locum?

Answer 23

• A firm that has a sole principal (sole practitioner or a sole director) must have in place appropriate arrangements in the event of that sole principal’s death or incapacity, or extended absences
• A locum is effectively another professional who is appointed to ‘stand in’ for the surveyor if they are unable to work, e.g. in the event of an accident/illness, unforeseen circumstances, prolonged absence or death

Question 24

Who can be a locum?

Answer 24

A trustworthy professional e.g. Chartered Surveyor, solicitor or accountant

Question 25

How does PII relate to locums?

Answer 25

Locums need to be covered for any work undertaken while a sole practitioner is unavailable. This either could be under their own cover, if appropriate, or under the Firm’s PII policy.

Question 26

What are the CPD requirements for Chartered Surveyors?

Answer 26

• 20 hours of CPD each calendar year
• 50% CPD must be formal
• CPD must be recorded online before 31 January
• Members must maintain a relevant understanding of RICS professional and ethical standards during a rolling three-year period

Question 27

How do you define between formal and informal CPD?

Answer 27

Formal - Structured learning with clear learning objectives and outcomes
- Professional training course
- Structured online training
- Learning that includes an assessment measure
- Self-managed learning as long as it has a clear learning outcome which is linked to development

Informal - Self-managed learning that is relevant or related to your professional role
- Private study
- On-the-job training
- Attend to informal seminars or events where the focus is on knowledge-sharing

Question 28

Can you accept a gift from your client or contractor?

Answer 28

• I would not accept anything that might suggest an improper obligation
• Gifts and hospitality can be accepted in certain circumstances, but the key is to consult the ethics decision tree, key points to note are:
• Timing
• Proportionality

Question 29

What things would you consider when assessing if a gift or hospitality is appropriate to accept?

Answer 29

• What is the value of the gift or hospitality?
- Is the gift or hospitality offered at an appropriate time? (Is the offer presented just before tender award for example).
- Is it proportionate to the working relationship?
- Will the gift effect my ability to act impartially?
- Is it proportionate to gifts being offered to others?
- Who is the gift or hospitality being given to? (Is it just one person or a range of people from different organisations).
- Is it in line with RICS Rules of Conduct and professional standards?

Question 30

Can you explain what a conflict of interest is?

Answer 30

• A Conflict of Interest arises in a situation where there may be an actual, perceived or potential risk that the professional judgement of an RICS-regulated firm or member will be compromised when undertaking an assignment.

Question 31

Has RICS published any information on Conflicts of Interest?

Answer 31

Conflicts of Interest, 1st edition, March 2017.

Question 32

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

Answer 32

Party Conflict:
A situation in which the duty of an RICS member or regulated firm, acts in the interests of a client or other party in a professional assignment which conflicts with a duty owed to another client or party in relation to the same or a related professional assignment.

Own Interest Conflict:
A situation in which the duty of an RICS member or regulated firm, acts in the interests of a client in professional assignment which conflicts with the interests of the same RICS member/firm.

Confidential Information Conflict:
A conflict between the duty of an RICS member or regulated 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 33

What is Informed Consent?

Answer 33

Informed Consent occurs when a party who might be adversely affected by a Conflict of Interest acknowledges the existence of that risk but still agrees to instruct an RICS-regulated firm or RICs member to proceed with the assignment.

Question 34

What action should you take if a Conflict of Interest situation (or potential situation) arises?

Answer 34

As soon as you become aware, disclose to the client in writing and detail the nature of the conflict.

Question 35

What is a bribe?

Answer 35

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

Question 36

What is the Bribery Act 2010?

Answer 36

The Bribery Act 2010 covers criminal law relating to bribery. The Act contains four main bribery offences:
Bribing another person;
Being bribed;
Bribing a foreign public official; and
Failure by a commercial organisation to prevent bribery.

Question 37

What are the 6 principles of the Bribery Act?

Answer 37

• Proportionality - The action taken should be proportionate to the risk and size of the organisation.
  business without bribery.
• Top level commitment - Those in senior positions are best placed to ensure the organisation conducts
  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.
• Due diligence - Due diligence procedures must be applied, taking a proportionate and risk-based approach, with regard to individuals who perform or will perform services on behalf of the organisation.
• Communication - employers will need to communicate their policies and procedures to staff and others who perform services, additional training may help to raise awareness
• Monitoring and review - as an overarching principle, organisations should monitor and review procedures designed to prevent prevent bribery by persons associated with it and make improvements were necessary

Question 38

Who does the Bribery Act 2010 apply to?

Answer 38

The Bribery Act will apply to an individual if:
- A British citizen has committed a bribery offence anywhere in the world.
- A British associate with a connection to the UK, such as through business, conducts a bribery offence in or outside of the UK.

The Bribery Act will apply to an organisation if:
- The organisation is incorporated in the UK and has committed a bribery offence anywhere in the world.
- An organisation or partnership that has carried out business in the UK.

Question 39

What is your position for compliance with the Bribery Act?

Answer 39

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

Question 40

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

Answer 40

• There is a maximum penalty of 10 years imprisonment and/or an unlimited fine for individuals.
• Corporates face an unlimited fine

Question 41

What is money laundering?

Answer 41

Money laundering is the generic term used to describe the process by which criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source.

Question 42

How do you report suspicious money laundering behavior?

Answer 42

If you suspect that money laundering may be taking place, you are legally obligated under the Money Laundering Regulations to submit a SAR (Suspicious Activity Report) to the National Crime Agency.

Question 43

What is corruption?

Answer 43

The abuse of power for private gain.

Question 44

What is a price fixing cartel?

Answer 44

A cartel is a collection of otherwise independent businesses or countries that act together as if they Were a single producer and thus can fix prices for the goods they produce and the services they render, without (or reduced) competition.

Question 45

What is terrorist financing?

Answer 45

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

Question 46

What is a facilitation payment?

Answer 46

A payment made to a public or goverment offcial that adts as an incentive for the official to complete some action or process expeditiously, to the benefit of the party making the payment.

Question 47

What is modern slavery?

Answer 47

Modern slavery is the illegal exploitation of people for personal or commercial gain.
It covers a wide range of abuse and exploitation including sexual exploitation, domestic servitude, forced labour, criminal exploitation and organ harvesting.

Question 48

What is the relevant modern slavery legislation?

Answer 48

Modern Slavery Act 2015.

Question 49

Can you give examples of modern slavery?

Answer 49

• Forced labour - any work or services which people are forced to do against their will under the threat of some form of punishment.
• 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.
• Human trafficking - involves transporting, recruiting, or harbouring people for the purpose of exploitation, using violence, threats, or coercion.
• Child slavery - Child slavery occurs 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.
• Forced and early marriage - when someone is married against their will and cannot leave the marriage. Most child marriages can be considered slavery.

Question 50

How do you report modern slavery?

Answer 50

Call the modern slavery hotline or police

Question 51

What is professional indemnity insurance?

Answer 51

Professional indemnity insurance covers the policyholder for the costs of legal action made against them in respect of financial loss which occurs due to the negligence, error, or omission in professional
advice or services provided

Question 52

Has RICS published any information on PII requirements?

Answer 52

UK professional indemnity insurance requirements - Version 9, 1 April 2022.

Question 53

What is the purpose of having professional indemnity insurance?

Answer 53

• Ensures that if the firm faces a claim, it is protected from financial loss that it cannot meet from its own resources.
• Protects 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; and
• Ensures that the firm’s clients do not suffer financial loss, which the firm cannot meet.

Question 54

Tell me about Merrett v Babb 2001

Answer 54

• Babb completed a valuation as an employee of a company for a house purchased by Merrett.
• The valuation was later found to be negligent.
• The original company no longer existed and the professional indemnity policy had been cancelled.
• The Court ruled Merrett could pursue the individual (Babb) for losses.

Question 55

What are the minimum limits of indemnity (for regulated firms)?

Answer 55

Firm’s turnover - Min. Indemnity limit
£100k or less - £250k
£101k to £250k - £500k
£201k + - £1million

Question 56

What is the maximum level of uninsured excess (for regulated firms)?

Answer 56

Firm turnover - Max Uninsured excess
£10million or less - the greater of 2.5% of the insured sum, or £10,000
£10,000,001 or more - no limit set

Question 57

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

Answer 57

• My firm’s professional indemnity insurance would not cover me for private advice; therefore, I would politely decline to provide.
• I would also need to consider a potential Conflict of Interest situation (working for a friend).
• I would suggest my friend contacts the firm I work for, in business hours, to discuss the commission.

Question 58

What is professional indemnity insurance run-off cover?

Answer 58

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 (the policy covers legacy issues).

Question 59

How long should run-off cover be in place?

Answer 59

RICS expect run-off cover to be maintained for a minimum period of six-years from the cessation of the practice.