Ethics, Rules of Conduct and Professionalism Flashcards
What is Rule 1, from the RICS Rules of Conduct?
Rule 1: Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to the RICS.
What is Rule 2, from the RICS Rules of Conduct?
Rule 2: Members and firms must maintain their professional competence and ensure that their services are provided by competent individuals who have the necessary expertise.
What is Rule 3, from the RICS Rules of Conduct?
Rule 3: Members and firms must provide a good quality and diligent service.
What is Rule 4, from the RICS Rules of Conduct?
Rule 4: Members and firms must treat others with respect and encourage diversity and inclusion.
What is Rule 5, from the RICS Rules of Conduct?
Rule 5: Members and firms must act in the public interest, take responsibility for their actions, and act to prevent harm and maintain the public confidence in the profession.
What are the professional obligations of members?
- Comply with CPD requirements as set by RICS.
- Cooperate with RICS
- Promptly provide all information reasonably requested to the Standards and Regulation Board, or those exercising delegated responsbility on its behalf.
What are the professional obligations of firms?
- Publish a complaints handling procedure, which includes an alternative dispute resolution provider and maintain a complaints log.
- Ensure all previous and current professional work is covered by adequate and appropriate professional indemnity cover that meets standards approved by the 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.
- Must cooperate with RICS.
- Promptly provide all reaonably requested information to the Standards and Regulation Board, or those exercising delegated responsbility on its behalf.
- Must display a designation to denote they are regulated by RICS on their business literature, in accordance with RICS’ policy.
- Must report to RICS, any matter they are required to report under the Rules for the Registration of Firms.
Where are the professional obligations found?
In Appendix A of the Rules of Conduct.
What is a conflict of interest?
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.
What types of conflict are there?
Party conflict -
A situation in which acting in the interests of a client or other party 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 acting in the interests of a client conflicts with the interests of that same RICS member/firm.
Confidential information conflict –
A conflict where one client requires a RICS member to provide information, but where another client requires the same member to keep that same information confidential.
Why would you identify a conflict of interest?
The most important reason for avoiding conflicts of interest is to prevent anything getting in the way of your duty to advise and represent each client objectively and independently.
Not identifying a conflict, could affect your professional judgement.
Maintain public confidence.
What is an information barrier or ‘Chinese wall’?
The physical and/or electronic separation of individuals (or groups of individuals) within the same firm to prevent confidential information being passed between them.
You have identified a conflict of interest; what are your next steps?
You should always consider whether your proposed course of action might:
Be reasonably perceived as a lack of integrity.
Cause embarrassment the profession.
Prevent you from being able to advise and represent each client objectively and independently.
If there is a risk of your proposed course of action having an effect, you must not proceed.
Is there an instance when you might proceed even though a conflict of interest has been identified?
The Conflict of Interest professional statement does not allow you to choose whether you can proceed despite a Conflict of Interest or a significant risk of one: it prohibits you from proceeding, unless you obtain prior Informed Consent from all affected parties.
What is informed consent?
Consent is given willingly by a party who may be affected by a conflict of interest to proceed, in the understanding that:
- there is a conflict of interest or a significant risk of one.
- all the facts are known by the RICS member/firms advising the party.
- what the conflict of interest is or may be.
- the conflict of interest may affect the ability of the RICS member/firm to advise or act fully in the interests of the client.
What is your firm’s gifts and hospitality policy?
Brittain Hadley operate a Gifts and Hospitality policy in line with RICS guidance and Anti-Bribery Guidance.
Be appropriate: The gift should be given for a valid reason, at an appropriate time, and be of a nominal or one-off value.
Be transparent: Record all gifts and hospitality in a register.
Be open: The gift should not be given in secret or undocumented.
Be proportionate: The value of the gift should be appropriate for the occasion.
Be infrequent: Avoid giving or receiving gifts or hospitality too often.
Avoid undue influence: The gift should not be intended to influence a business transaction or public policy engagement.
Any gift, hospitality or benefit which might reasonably be seen to compromise the Company’s position or your personal judgment and integrity, is to be refused.
What is your firm’s Anti-Bribery and Corruption policy?
In line with the RICS professional standard on Countering Bribery and Corruption, Money Laundering and Terrorist Financing, Brittain Hadley operates in compliance with the laws relevant to countering bribery and corruption in the UK. This includes the Bribery Act 2010.
It is our policy to conduct all of our business in an honest and ethical manner.
Wherever possible, the Company will use procedures to minimise the opportunity for corruption by subcontractors and suppliers against the company.
The Company is open and transparent about the process by which contracts have been notified, tendered and awarded.
How do you manage conflicts of interest in your professional work?
I would initially exercise my professional judgement to see if a conflict exists and which type.
I would exercise my professional judgement to determine if I can represent the client objectively and without bias.
If I can, I would inform them I would be willing to act only if informed consent can be provided by parties involved before proceeding.
Alterntively I would consider recommending another colleague or organisation.
What are the three types of conflicts of interest?
Party conflict - A conflict between two parties on the same job.
Own interest conflict - when representing the client conflicts your own interests.
Confidential information conflict - A conflict when you are asked to share/withold information.
How do you keep up to date with current affairs and topic issues ?
On mailing list, office discussion, CPD email group, magazines and publications etc
What information is required by the RICS for registration and in the annual return?
Type of business and staffing details.
Statutory regulated activities.
Nature of clients.
Complaints handling procedure and log.
Professional indemnity insurance certificate.
Whether the firm hold clients’ money.
How does your behavior differ professionally and personally ?
My approach and behaviour does not change.
What would you do if you considered your directors advice to be incorrect ?
I would consider :
The implications of the advice
Is it legal ?
I would discuss with managers and other colleagues.
Refer to the Ethics decision tree.
What is the status of a RICS professional statement ? who does it apply to ?
A RICS professional statement is Mandatory. It applies to -
RICS trainees, members, regulated firms.
You set up your own business but you decide to go off on a skiing holiday for 2 weeks, you break your leg and the doctors say you must have complete bed rest and no access to emails or work phone, what do you need in place to cover this situation?
A Locum agreement
You see that a colleague is having some unwanted attention from a male colleague and it has happened a few times, what action if any would you take and what is this?
Consider this as a potential form of workplace harassment.
I would go and speak to the male colleague and tell him its not acceptable behavior, I would also report it to my senior.
Why do you want to become chartered ?
A globally recognised standard.
Designation will help my career.
Once a member, RICS offer guidance and support.
I am committed to lifelong learning
What is the RICS ethical decision tree?
The RICS decision tree is a framework to help make informed decisions that are in line with ethics and laws.
What are ethics?
Moral principles that govern an individuals behaviour.
Why are ethics important?
Ethics encourage appropriate behaviour and ensure consistency and clarity in the market.
They allow us to provide the best service for the client and recognise the wider public.
What does it mean to act ethically as a Chartered Surveyor?
Acting ethically means complying with rules or conduct and standards.
It ensures that you are acting on behalf of your clients best interests.
What are the three types of due diligence?
Simplified Due Diligence – Where you determine the business relationship is low risk of money laundering/terrorism
Enhanced Due Diligence – for high risk customers and transactions with greater threat to financial sector
New Customer Due Diligence – doing the checks to ensure your client is who they say they are.
What are the three benefits of RICS regulations for firms?
CPS:
Confidence - for client as regulated firms are monitored by RICS regulation.
Professionalism - firms have to provide clear, impartial and expert advice.
Security - firms have to have recognised CHP, access to ADR and PII cover.
Why does your firm have Terms of Engagement? What should be included in Terms of Engagement?
Creates a contract with the client and a clear definition of what is expected and on what terms etc.
Sets out the proposed fee basis, payment of expenses and that a copy of the firm’s complaints handling procedure is available upon request.
How would you close down a practice?
Inform the RICS
Inform clients and arrange for them to be handed over to a new firm.
Return any clients’ money
Set-up professional indemnity run-off cover for a minimum of 6 years
Retain a copy of client files and record for a minimum of 6 years
How long should files be kept for?
A minimum of 6 years before disposing and destroying them securely (although can be sued for negligence for up to 15 years)
What do the new rules state about the use of the RICS logo and designation?
Use of the RICS logo has been restricted to members and regulated firms only.
The ‘regulated by RICS’ designation must be displayed clearly to ensure visibility.
Companies are only allowed to use ‘chartered surveyor(s)’ designation in trading name and not company name
How would you limit the risk of working with a client or contractor who may be financially unstable ?
Dun & Bradstreet credit check.
Company search (Account information from Companies House)
Internet search (Client website for additional information judgement on reliability)
References.
If your client asked you to lower your fees because of their limited funding, what would you do?
I would explain that the client would have to pay the required price for the level of service required. I cannot just lower my fees.
Alternatively I could offer to reduce the scope of works.
How do you know you are competent ?
Having the appropriate knowledge, skills, training or experience to undertake an instruction.
Can you advise somebody as an individual ?
Not unless you have the correct insurances in place.
I would advise them to contact me during normal working hours, I will then be able to dicuss a formal appointment, as long as it does not become a conflict of interest and TOE can be defined.
How do ethics link with conduct rules?
Rules of conduct are a detailed description of how we are expected to carry ourselves and how to set the highest possible level of standard.
Ethics hold a similar value.
If faced with a situation that you felt was unethical, how would you proceed?
I would use the Ethics decision tree to consider if:
I have sufficient facts?
The matter legal?
It is in line with RICS Professional and Ethical Standards?
I have consulted with appropriate people?
I have clear reasoning in reaching my decision?
I would be content for my actions to be made public?
If I answered no to any of the above, I would not proceed with the situation alone and would consult senior staff with direction on how to proceed.
Why are ethics important?
Sets a standard of expertise and professionalism.
Promotes trust in the company and industry
What are the CPD requirements?
Qualified/MRICS member – 20 hrs per year, min 10 hours formal. Ethics every 3 years.
What is the difference between formal and informal training ?
Formal has a learning objectives and a defined learning outcome.
Such as an online course or seminar.
What is your CPD strategy ?
My CPD plan is dictated by my skills and knowledge gap.
I consider future requirements.
I review my CPD strategy twice a year with my Director to confirm I am getting suitable and appropriate CPD for my role.
Where would you find the RICS requirements for professional indemnity cover?
The RICS requirements for professional indemnity (PII) cover are outlined in the RICS Rules of Conduct, Appendix A: Professional obligations to RICS.
In relation to professional indemnity insurance, what is the minimum limit of indemnity for turnover under £100,000 (in the preceding year )?
- £250,000. This is dependent on predicted turnover based on the previous year’s turnover
- The RICS defines 3 levels of cover:
o up to £100,000 = £250,000
o £100,001 - £200,000 = £500,000
o £200,001 + = £1,000,000 of cover
How many years after an instruction has been completed can a Professional Indemnity claim be made ?
A professional indemnity claim can be made up to six years after an alleged negligent act occurred. However, there are some circumstances where the time limit can be extended:
Deed agreements
If the agreement is drafted as a deed, the deadline for a contract claim can be extended to 12 years after completion.
Hidden damages
If the claimant can prove that there was hidden damage that was unknown to them, the time limit for a tort claim can be extended by up to 15 years.
What type of cover would you need to cover a claim brought after a firm or member ceases to trade ?
Run off cover.
Run off cover must also be held for a minimum of 6 years for a limit of £1million.
What cover do you need?
PII insurance - Professional indemnity insurance covers financial loss, personal injury and property damage resulting from negligence or errors while working for a client.
PLI insurance - Public liability insurance is there to protect you if a member of the public is injured (or their property is damaged) and your business is faced with a compensation claim as a result. It can cover you when you’re working at client sites or in public.
Employers Liability Insurance - Employers’ liability insurance covers you and your business for compensation costs if an employee becomes ill or injured as a result of the work they do for you. It’s legally required of all businesses with one or more employees.
Building Insurance (if you own your own premises)
Why do you need PII insurance?
Consultants provide expert advice and therefore face risks associated with making mistakes or errors in judgement that could cost a business in profits.
Professional Indemnity Insurance (PII) is important because it protects against legal costs and damages that may result from claims of negligence or inadequate services.
What would you do if you dropped your camera on someone’s car bonnet during a survey?
Make numerous attempts to contact the owner to detail what has happened along with an sincere apology.
If not available I would leave a note, take pictures etc.
I would escalate this to the management team.
This may prompt a claim under professional or public indemnity insurance.
What status is the RICS Professional Indemnity Insurance Requirements document?
A regulation document
Who does PII protect ?
Clients from financial loss, the firms form loss resulting in being able to continue trading and the surveyor.
What is meant by each and every claim ?
Each and every claim, is cover for each claim that is raised.
The value of each claim is not added up.
The opposite is ‘aggregate claims’, where the claims are added up to a certain agreed value.
You could have each and very claim up to £100,000 per claim or you could have £100,00 aggregate(which is a lot lower cover).
What measures should be taken to try and avoid PI claims?
Keep full and detailed records of meetings, conversations etc
Record recommendations and advice given
Use proper letters of engagement, scope of services and terms of engagement
Don’t advise on a specialism outside your field of experience
Use RICS guidelines
Avoid poor management and excessive workloads
In the RICS Professional Statement - Countering bribery, corruption, money laundering and terrorist financing February 2019 - RICS Members and Firms must do what in relation to bribery and corruption ?
Not offer or accept, directly or indirectly, anything that could constitute a bribe
Ensure that they have adequate knowledge of bribery and corruption to be able to comply with the requirements of this professional statement.
Report any activity they are aware of that breaches applicable anti-bribery and corruption laws to the relevant authorities or a senior manager.
Can you name any Money Laundering Red Flags?
Cash-only buyers
An unusual sale price (too low or too high)
Payments from multiple/different source to counterparty
Funds provided by unknown third parties
What is money laundering?
Concealing the source of proceeds of criminal activity to disguise their illegal origin.
This may take place through hiding, transferring and or recycling illicit money or other currency through one or more transactions, or converting criminal proceeds into seeming legitimate property.
Give me some examples of how your firm might comply with the Money Laundering Regulations.
We report cash payments over £10K.
Carry out risk assessments to make sure that we take the necessary procedures when working with clients from high risk countries or high risk sectors.
What are the aims of the Money Laundering Regulations and what are the duties of surveyors?
Aims to stop criminals using professional services to launder money and to investigate large or regular cash transactions.
I have a duty to report cash payments over £10K.
Sets additional obligations for private sector firms working in areas of high money launder risk.
Requires surveyors to carry out risk assessments to make sure that you take the necessary procedures when working with clients from high risk countries or high risk sectors.
If you were given a gift what would you do ?
Consider if the gift is appropriate - ie, when was it given,
Consider if it is proportionte and in line with my firms G&H policy.
Log it within the gift log.
I may decline the gift taking into account timings and proportionality and my companies gift handling policy.
Would you accept a gift from a contractor ?
I would take into account the proportionality and timings. If I did It would be logged in our gifts handling register.
If you were offered a bottle of wine at xmas what would you do ?
Consider the proportion and circumstances of the gift, including the timings.
When would accepting or providing hospitality be acceptable ?
Once all the works are complete on site and the final account agreed and there is no conflict of interest. also consider the scale, time and suitability of the hospitality and or gift.
What’s the difference between a gift and a bribe ?
A gift is a small gesture, a bribe is under the impression that some gain will result.
Would you accept a gift or hospitality?
Consider the timing and proportionality. Could always check this against the guide in the Bribery Act 2010. Ensuring it does not influence decisions, should not be regular, should be openly received, keep a log of the items received.
What would you do if a contractor took you out for a coffee?
I would question the intentions firstly. If I felt like it was a genuine business reason, I would accept but offer to pay for myself and log the meeting in the companies gift register if they end up paying.
Can you please expand on your knowledge of Merritt Vs Babb ?
The case dates back to 2001, and highlights the importance of run-off cover.
A surveyor (Babb) provided valuation advice and was negligent. They were then sued by the former client (Merritt).
Because the firm was no longer in existence, the individual survyeor was pursued for damages, successfully.
This highlighted the need to ensure run-off cover is in place for all previous employees.
