Ethics, Rules of Conduct and Professionalism Flashcards
Why do you want to join the RICS?
- To be respected as RICS chartered. I’d be very proud of being part of such an esteemed organisation.
- It also presents CPD support and career and networking opportunities.
- Would also give clients more trust in my ability as a professional.
What is the meaning of the RICS Motto?
The motto is ‘Est Modus in Rebus’ which in Latin translates to ‘There is measure in all things’.
What is the Mission Statement of the RICS?
- To qualify and equip their members to offer the highest standards of professional service.
- To promote and enforce standards
When was the RICS founded?
It was founded in 1868.
How is the RICS Structured?
- The RICS is self-regulated and internally monitored meaning that it is not regulated by the Government or external parties.
- The Bye-Laws determine how the RICS is regulated.
What are the RICS’ 5 principles of better regulation?
PACTT
- Proportionality.
- Accountability.
- Consistency.
- Targeting.
- Transparency.
What is the difference between RICS ethics and rules?
- Ethics are a set of moral values.
- Rules of conduct are a framework that we work to.
When were the current RICS rules of conduct effective from?
- The New Rules of Conduct are effective from the 2nd February 2022.
What are the New Rules of Conduct?
- Rule 1. Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
- Rule 2. Members and firms must maintain their professional competence and ensure that services are provided by competent 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 others 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.
HICSRR - Honesty, Integrity, Competence, Service, Respect, and Responsibility.
What are the New Rules of Conduct?
- Rule 1. Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
- Rule 2. Members and firms must maintain their professional competence and ensure that services are provided by competent 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 others 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.
HICSRR - Honesty, Integrity, Competence, Service, Respect, and Responsibility.
Why did the previous Rules of Conduct change?
- The previous rules had been in place since 2007.
- Brought various standards into one simple structure.
- I also understand there is now a greater focus on clearer example behaviours, understanding evolving technology and tackling climate change.
What are the professional obligations of members?
- Members must comply with the CPD requirements set by the RICS which requires 20 hours of CPD for each calendar year.
- Members must cooperate with RICS.
- Members must promptly provide all information reasonably requested by the Standards and Regulation Board, or those exercising delegated authority on its behalf.
What are the professional obligations of firms?
- Firms must publish a complaints-handling procedure.
- Firms must ensure professional work is covered by adequate and appropriate professional indemnity cover that meets the standards approved by RICS.
- 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.
- Firms must cooperate with RICS.
Please explain the steps of the updated RICS Ethics
Decision Tree for 2022?
- provides a decision-making framework to deal with even the most testing of ethical dilemmas.
- Responses include Act, record and do not proceed.
Why does the RICS have Rules of Conduct?
- To provide a framework to work to and ensure clients are receiving a set level of service.
- Provide professional guide for individual members.
In the case of a breach of a rule of conduct what is the procedure?
- Not every shortcoming will necessarily give rise to proceedings.
- A formal investigation by the Head of Regulation of the RICS is the first step in the process.
- The RICS can request information and/or visit and inspect to investigate compliance.
- Members must cooperate fully with all enquiries.
How can a disciplinary proceeding be triggered?
- Someone complaining to the RICS.
- An allegation by a client or third party.
- Information received or established by the RICS.
What three actions can be imposed after the end of the
investigation stage?
- Fixed penalty.
- Consent order
- Disciplinary panel.
What are fixed penalties?
A fine by the RICS.
What are consent orders?
- It is a written agreement between the RICS and a member or firm concerning a disciplinary issue on a breach of the RICS rules.
- It can restrain the member or firm from taking certain actions for a specified period of time.
When is a disciplinary panel applicable?
- They are used for more serious breaches of conduct.
- The panel will usually be held in public.
- The burden of proof is on the RICS.
What sort of breaches would expulsion be suitable for?
- Gross, persistent or wilful failure to comply with an RICS rule of conduct.
- Fraud, dishonesty, conviction of a serious criminal offence, gross incompetence, deliberate discrimination, misappropriation of a client’s money.
What procedures must you follow if you are starting up a new practice?
- Obtain a company start up pack.
- Inform the RICS and register for regulation.
- Prepare a complaints handling procedure.
- Obtain Professional indemnity insurance cover.
- Abide by the Rules of Conduct for Firms.
- Use the designation ‘Regulated by RICS’ on all practice material.
What insurances would you need if you were starting up
your own firm?
Professional Indemnity Insurance.
Employer’s Liability.
Public Liability.
Building’s insurance of an office premises.
What sort of information do registered firms have to
send to the RICS annually?
It is called annual return and carried out on-line. Failure to do so leads to a fixed penalty.
- Nature of clients.
- Training provision.
- Complaints handling procedures details and records.
- PI insurance details.
- Whether the firm holds clients’ money.
What processes do regulated firms need to put in place when handling Clients’ Money?
- A Principal oversees the client money accounting functions.
- All information and accounts must be secure
- Client money must be kept separate and clearly identifiable with the word ‘client’ included in the bank account name.
- Clients must always have access to funds.
- The account must not be overdrawn.
What are the different types of client money accounts?
- General accounts hold money for more than one client.
- Discrete accounts reference a single named client.
What is meant by the term Negligence?
- Negligence is a failure to provide the duty of care that is owed to the client.
- If it is breached due to Negligence a claim may arise resulting in damages being paid or a Professional Indemnity Insurance claim.
Tell us about the Merrit V Babb case law?
This case dates back to 2001 and highlights the importance of having run-off cover in place.
- A surveyor was sued for negligence by a former client.
- Because the surveying firm was no longer in existence therefore the individual surveyor was pursued for damages successfully.
- This caused a big shock in the industry and highlighted the need to ensure that run-off cover is in place for all previous employees.
What limitation periods are associated with underhand
and deed forms of contract?
- 6 years when executed under hand.
- 12 years when executed as a deed.
What must a complaints handling procedure entail?
RICS model form
- Details of the policy should be issued to the client
- PI insurers must be notified of a complaint immediately.
- All complaints must be recorded.
- The complaint must be investigated within 28 days.
- Include a redress mechanism.
What is an independent redress scheme?
- Gives a clear route for making a complaint in the knowledge that if it cannot be resolved with the firm an independent third party will look at the facts and arbitrate.
What do you do if you receive a letter of complaint?
- I would acknowledge receipt and I would forward it to my firms designated complaint handler, as per our complaint handling procedure, providing additional information as required.
- I would also highlight the importance of informing our Professional Indemnity insurance providers immediately.
What is the ‘Clients’ Money Protection Scheme’?
- This is a money protection scheme operated by the RICS.
- It contains provision for any member of the public to be reimbursed their direct loss of funds when using an RICS regulated firm.
- This is provided through an RICS insurance policy.
What is the purpose of the joint names on a client
account?
- For the purpose of dual authorisation.
What are the continuous professional development
(CPD) requirements?
- Members must undertake and record appropriate lifelong learning.
- On request by the RICS they must provide evidence that they have carried out the CPD to maintain and improve their levels of professional competence.
What does PII stand for?
Professional Indemnity Insurance.
What is the purpose of Professional Indemnity
Insurance?
To provide financial cover in the event a client suffers financial loss as a result of a breach of professional duty e.g. neglect, errors or omissions
What benefits does it (PII) provide for the professional?
- The professional is protected from financial losses.
- The firm does not have to meet the claim from their own assets and resources.
What benefits does it (PII) provide for the client?
- They are able to recover their financial losses.
On what basis is it (PII) underwritten in the UK?
- On a claims made basis.
What does on a claims made basis mean?
- When a claim is received, it is the insurer in place at that time that will respond rather than the insurer in place when the negligent act occurred.
- This is why policies must cover past and present employees.
What are the requirements regarding Professional Indemnity Insurance set by the RICS?
The policy cover must be made on an ‘each and every’ claim basis.
The RICS sets out the minimum levels of indemnity.
The RICS sets out the maximum levels of uninsured excess.
Run off cover must be in place for at least 6 years
What are the minimum levels of indemnity and
Maximum levels of uninsured excess?
What measures should be taken to try and avoid PI claims?
- Keep full and detailed records of meetings and conversations.
- Use proper letters of engagement, scope of services and terms of engagement.
- Don’t advise on a specialism outside your field of experience.
If you made a mistake in your cost plan what would
your insurance company expect?
- For you to notify them and comply with any conditions & procedures set out in the insurance policy.
If an estimate prepared by a QS is incorrect can the
client claim damages?
- An estimate that is incorrect in itself will not provide the client with a right of redress.
- The client must demonstrate that the QS warranted the accuracy of the estimate or that it was incorrect due to a lack of reasonable skill and care.
- It could have been incorrect due to reasons outside their control for example market conditions or an item referred to in their exclusions.
How can you limit your liability when agreeing terms of
appointment with a client?
- If the client’s requirements are performance based, this may imply fitness for purpose. It is advisable to request a clause limiting the appointment to reasonable skill and care only.
- Run off cover must be in place.
- Execution of the appointment under hand will result in a reduced liability period of 6 years instead of 12.
What are the main elements included within a fee
proposal?
Terms and conditions.
Scope of services.
Exclusions & assumptions.
If you put together a fee proposal, but a couple of
months into the job you realise that you have under
forecasted your resources, would you go back to the
client and ask for more money?
-If project requirements such as the services, scope or value of the project has increased then I would go back to client and request a fee increase.
- If the scope of works had remained the same, this highlights a mistake within our fee bid and the additional work would need to be carried out without reducing the level of service being offered and without requesting additional fees from the client.
