Ethics, rules of conduct and professionalism Flashcards
What are the 5 rules of conduct?
Be honest and act with integrity
Maintain professional competence
Provide a good quality, diligent service
Treat others with respect
Act in the public interest and take responsibility
Feb 2022
What is the format of the annual 20 hours of CPD once qualified?
10 hours must be formal, other 10 can be informal or formal
What is rule 1 of the rules of conduct?
Members and firms must be honest, act with integrity and comply with their
professional obligations, including obligations to RICS.
What is rule 2 of the rules of conduct?
Members and firms must maintain their professional competence and ensure
that services are provided by competent individuals who have the necessary
expertise.
What is rule 3 of the rules of conduct?
Members and firms must provide good-quality and diligent service.
What is rule 4 of the rules of conduct?
Members and firms must treat others with respect and encourage diversity and
inclusion.
What is rule 5 of the rules of conduct?
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.
Where can you find guidance on conflicts of interest?
RICS Professional Standard - conflicts of interest 2018
How does the VOA check conflicts of interest?
DVS - Checks are undertaken prior to any work and recorded on case control document including competence to complete work. If conflicts are identified then the matter is escalated with line manager.
Other work streams still check for COIs but do not document where there isn’t one only where there is and line manager informed.
What are the three types of conflict and what do they involve?
Party conflict- relating to work on the same or related instruction for two different parties
Own interest conflict- relating to a personal interest
Confidential Information conflict- relating to work between two parties which is confidential
What are some ways to ensure a conflict of interest doesn’t happen?
Get informed consent
Information barrier
Do not accept instruction
What is an information barrier?
Physical and or electronic separation of individuals within the same firm that prevents confidential information passing between them.
What is a bribe?
An offer to induce an action which is illegal, unethical or a breach of trust
A client offers you wine after an instruction what do you do?
In VOA refuse the offer as in line with VOA procedures but inform my manager of the offer.
Private practice it needs to be proportionate to the work undertaken in this case I could accept the offer and then also note it under the gifts register of the company.
What are the 6 principles of the bribery act 2010?
Proportionate procedures
Top level commitment
Risk assessment
Due diligence
Communication
Monitoring and review
What is a Calderbank offer?
without prejudice settlement offer, save as to costs
What are the types of bribery under the bribery act 2010?
Direct bribery - bribing someone
passive bribery - accepting a bribe
Bribing a foreign public official
A corporate offence of failing to prevent bribery
Penalty of breaching the bribery act?
up to 10 years imprisonment or unlimited fine or both
What RICS document covers bribery and money laundering?
RICS Professional Standard Countering Bribery and Corruption, Money Laundering and Terrorist Financing 1st Edition 2019
What must firms do in regard to bribery and corruption?
Not accept or offer a bribe
Have plans to comply with local laws
Report any activity which breaches laws
Use due diligence to discover what threats the business might face
Record information of how they have complied with the professional standard
What must firms do regarding Money laundering and terrorist financing?
Not facilitate or be complicit in it
Have systems and training in place
Report any suspicions to relevant authorities
Undertake risk assessments to identify potential threats
Carry out appropriate checks on clients, including identity checks
Record information of how they have complied with the professional standard
What must members do regarding Money laundering and terrorist financing?
Not facilitate or be complicit in it
Report any suspicions to relevant authorities
What should members and firms adopt to ensure they do not breach bribery and money laundering?
Written policy
Appropriate systems
Gifts register
Training
Contactable compliance officer
What is the ethics decision tree?
a decision-making framework to deal with even the most testing of ethical dilemmas.
How often do members need to undertake the ethics module?
Every 3 years
What are members professional obligations to RICS?
Comply with CPD requirements
Cooperate with RICS
Provide information requested by standards and regulation board
What are firms professional obligations to RICS?
publish CHP
PII cover
Appropriate arrangements for work in event of death or inability to do work
Cooperate with RICS
Provide information requested by standards and regulation board
Display RICS designation to show regulation
report any matter under the Rules for the registration of firms.
When are firms required to register with RICS?
When 50% or more are RICS members
Operate in UK
Provide surveying services to public
How do you register a firm with RICS?
Contact RICS and obtain company start up pack
Inform RICS and register for regulation
Appoint contact officer
Prepare CHP
Obtain PII
Abide by rules of conduct
Use RICS designation
Who is the current president of the RICS
Justin Sullivan
Who is the CEO of the RICS?
Justin Young
Who is the current president elect of the RICS
Nicholas Maclean
Who is the current vice-president of RICS?
Maureen Ehrenberg
What is the RICS?
Royal Institution of Chartered Surveyors
It is a the global governing body for chartered surveyors
When was it founded?
Initially formed as the Surveyors Club in 1792
The surveyors institution was founded in 1868
Incorporated by Royal Charter on 26th August 1881
Became what we know today as RICS on 3rd July 1947
What is the RICS motto?
Est modus in rebus
There is measure in all things
How is the RICS regulated?
Having Royal Charter mean that the Chartered Surveying profession operates under a model of self -regulation
No government regulation
Internally regulated by RICS through bye-laws and RICS regualtion
What is the RICS structure?
Presidential team who work with the CEO and executive team
How long is each presidential position held for?
1 year
What was the Levitt review?
Alison Levitt carried out a review into RICS governance in 2021.
Review was required following concerns over a financial audit in 2018 and the unfair treatment of 4 non-executive member who raised the issues.
She recommended on governance, Executive remuneration, whistle blowing and legal advice
RICS adopted all the recommendations
Bad time for the RICS but the process has started to build a brighter future
can you tell me more about the recommendations suggested by Alison Levitt?
Greater oversight for Governing Council, which should be provided with the Minutes of all Boards and committees.
Updates should be provided by the Chair of the Board or committee, not by the Chief Executive or another senior member of staff.
More frequent meetings of the Management Board, and they should receive Minutes and documents it requests from all other Boards.
Members should be able to raise issues with Governing Council directly.
Financial bonuses at senior executive level should be reviewed to determine if they are appropriate for a professional membership organisation.
The whistle-blowing procedures should be overhauled to allow any complaint against a senior member of the senior leadership team to be referred to an independent third party.
External legal advice should always be given on the basis that RICS is the client, not its senior management. The provision of legal advice to RICS should be determined by competitive tender every three years.h
What is the Bichard review?
Commissioned by the RICS Governing Council to review the Institution’s purpose, governance and strategy.
The intentions of his six-month review include returning control of the RICS to its members, re-affirming that it is first and foremost a professional organisation and not a commercial enterprise, and creating a governance structure which is clearer, simpler and more accountable.
How many recomendations were there?
36
Senior roles shake-up
A new committee dedicated to improving member services
increase levels of devolution
Fees will be reviewed
Governing council to better reflect geographical location of members
What sort of information do registered firms have to send to the RICS annually?
Annual return – completed online failure results in a fixed penalty
Type of business and staff
Nature of clients
Training provision
Complaints handling procure
PI insurance details
Whether the firm holds any client money
What must a complaints handling procedure include?
The RICS provides a model form
Must include a redress mechanism
Detail should be issured to the client with the terms of business
Must be clear quick transparent and inpartial and free
Names and contact details of the nominated investigating person must be stated.
Complaint must be investigated within 28 days
All complaints, progress and outcomes must be recorded
Note the need to advise PI insurers of a complaint
2 stages as a minimum
Consideration of the complaint by a senior member of the firm
If not resolved, referred to an independent third party with the authority to award redress
What does PII stand for?
Professional indemnity insurance
What is the purpose of PII?
To provide financial cover in the event a client suffers financial loss as a result of a breach of professional duty e.g neglect, error or omission.
What benefits does PII provide?
the Professional is protected from financial loss.
- Does not have to meet the claim from their own assets and resources allowing smooth continuity of business
What basis should PII be underwritten?
On a claims made basis
What does on a claims made basis mean?
This is the insurance policy that is in place at the time the breach is discovered that is claimed.
Not the insurance policy in place when the breach was made
Tell me about Merrett v Babb?
Court case in 2001
Babb had done a valuation as an employee of a company for a house purchased by Merrett
Valuation later found to be negligent
Original company no longer existed.
Court ruled Merrett could pursue the individual Babb for the losses
Big shock in the industry
What is the significance of the Merrett v Babb case?
Considered if a professional employee was vulnerable to claims brought directly against them for advice given on behalf of their employers
Highlights importance of run off cover
Professional individuals and firms must ensure that run off cover is in place after they leave or their firm’s employment or a firm ceases trading.
Individuals should ensure that their ex company keeps up this cover on their behalf.
How long should run off cover be in place for?
Dependant on type of contracts the professional is involved in.
Usually 6 years if contract executed under hand – 12 years if executed as a deed
What are the requirements regarding PI by the RICS
Must be made on an ‘each and every’ claim basis
Gives min wording
Sets out minimum levels of indemnity
Sets out minimum level of uninsured excess
Run off cover must be in place for 6 years
Should include cover for past and present employees, directors and partners
What are the minimum levels of indemnity? / how do you determine the level of PI cover?
Depends on turnover
If turnover is 100k or less – 250K
If turnover is 100k-200k – 500k
If turnover is above 200k – 1mil
What are the maximum level of uninsured excess
Depends on the level of indemnity
Up to 500k = greater of 2.5% of insured sum or 10k
Over 500k = 2.5% of insured sum
What measure should be taken to avoid PI claims, name at least 3
Keep full and detailed records of meetings and conversations
Record recommendations and advice given
Use proper letter of engagement, scope of services and terms of engagement
Don’t advise on specialism outside of experience
Use rics guardance
Avoid poor organisation and high workloads.
how many professional obligations to RICS are there for RICS members?
3
Members must comply with the CPD requirements set by RICS
Members must cooperate with the RICS
Member must promptly provide all information reasonably requested by the standards and regulations board, or those exercising delegated authority on its behalf.
how many professional obligations to RICS are there for RICS-regulated firms?
7
Firms must publish a complaints-handling procudure which includes an alternative dipute resolution provider approved by RICS and maintain a complaints log.
Firms must ensure that all previous and current professional work is covered by adequate and appropriate professional indemnity insurance 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 ability to work.
Firms must cooperate with RICS
Firms must promptly provide all information reasonably requested by the standards and regulations board, or those exercising delegated authority on its behalf.
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.
Firms must report to RICS any matter that they are required to report under the Rules for the Registration of Firms.
What are the main Rules for the Registration of Firms?
Firms must have at least 25% principles (RICS Qualified members senior manager, partner or owner)
Regulated firms must designate a ‘Responsible Principal’ who will provide oversight, accountability and engagement with RICS standards and regulation.
Who makes the rules for registration of firms?
Standards and regulation board
what is the hierarchy of RICS documents?
International standards
Global professional standards
UK professional statements
Guidance notes
Codes of practice
what is a whistle blower?
A worker who reports wrongdoing in the public interest such as fraud or the company breaking the law.
Can you lose your job for blowing the whistle?
You are protected by law if you unfairly lose your job.
You can take a case to employment tribunal if your treated unfairly because you’ve blown the whistle.
What is a tribunal?
A court that settles certain types of disputes.
What are RICS bye-laws?
Principles underpinned by the rules and regulations
what are RICS regulations
Regs that Build on the by-laws with further detail on areas such as fees and membership.
Define RICS
The Royal Institution of Chartered Surveyors incorporated by Royal Charter
Define Surveyor
A person who provides a service related to the profession of a surveyor as set out in the Charter.
what does RICS having royal charter mean?
RICS has a seat on the privy council to advise the crown (his majesties government).
what does the royal charter require members to do?
Promote the profession for public benefit.
Tell me about the RICS professional standard 2 in the red book.
Ethics, competency, objectivity and disclosures
In keeping with the integrity of the valuation process, all members practicing as valuers must have the appropriate experience, skill and judgement for the task at hand.
Members must always act in a professional and ethical manner free from undue influence (bribe), bias or conflict of interest.
What would you do to set up your own firm in terms of RICS compliance?
RICS firm details form
Appoint contact office for RICS comms
Register for RICS REGULATION
Register for RICS valuer scheme
Send PII details to RICS
Get RICS approval for complaints handling procedure
Make arrangements for succession (if sole practitioner)
Set up procedures for clients’ money
RICS logo kit
Complete RICS annual return at end of each year
What would you do to set up your own firm in terms of Statutory compliance?
Equality act 2010 compliance (disability discrimination compliance)
Bribery act 2010 compliance
Register for data protection (GDPR and DPA)
Appoint a money laundering reporting officer (Money laundering regulations 2017)
Inform HMRC for VAT and Tax registration.
Ensure compliance with current employment law (living wage, hours, pension etc)
BEM DIE
Bribery
Equality
Money laundering officer
Data protection registration
Inform HMRC
Employment law
What do you know about RICS registered valuer scheme?
Valuer Registration scheme is a risk monitoring and quality assurance programme which checks compliance with the RICS Red Book.
Ensures that members always meet the highest valuation standards.
Becoming a Registered Valuer therefore offers protection and confidence both to you and your clients.
When you sign up for Valuer Registration, you agree to be audited by our team of Regulatory Surveyors. They will check that you are complying with all stated mandatory professional standards and following best practice guidelines
As a Registered Valuer, you can use the RICS Registered Valuer designation. You can also use the accreditation logo.
firms are required to register with RICS if what?
Firm provides surveying services to the public
Firm operates in Regulated Area A
At least 50% of the firms principles are RICS Members
what is regulated area A?
UK
why is regulation required of the RICS?
To inspire confidence in the professional leadership of the RICS.
tell me about the structure of the RICS
3 Levels under the Privy Council
Led by the governing Council
Then standards and regulation board, management board etc
Then finance committee and advisory panels.
why would you close down a firm?
Insolvency
Retirement
Merger
Or closure part of strategic decision
why does a firm need to be closed down properly?
Avoid issues of non-compliance with the RICS rules of conduct
To reduce risk of future legal or professional negligence claim.
steps to closing a firm (name at least 5 things you would do)
1 – agree closure date and seek advice on insolvency
2 – inform staff and deal with redundancies
3 – inform clients – could another firm take on the work?
4 – deal with outstanding client money – in line with RICS professional statement Client money handling
5 – Tell PII to arrange run off cover
6 – arrangements for hard copy and electronic files – keep for 15 years (as long as required)
7 – Get hard copy original documents being held by clients
8 – inform RICS and complete firm de-registration form
9 – set up contact notices to notify no longer practice
10 – inform legals (insurances, bank, HMRC, accountant, solicitor, information commissioner for data protection purposes)
What is a Phoenix firm?
Where an RICS registered firm closes in a disorderly way and then reregisters quickly as a new entity.
Relates to firms who want to form partners
Where a firm is insolvent or closes without sufficient run off cover in place
How can Phoenix firms be dealt with at RICS?
Refusing registration of new firm
Holding registration until outcome of pending disciplinary
Risk mitigation measures
License measures
Monitored closely on an ongoing basis
Additional staff training imposed on issues concerned
what would you do if you became suspicious a client was involved in money laundering?
Complete an enhanced due diligence check
Inform senior person responsible for money laundering at my firm
Document all stages and events
Report any suspicions of money laundering to the relevant authorities
what is a locum?
Arrangements to cover the incapacity or death of a sole practitioner.
Another professional who is appointed to stand in for the surveyor if they are unable to work i.e illness, prolonged absence or death.
who can be a locum?
Typically another chartered surveyor
Could also be a solicitor or accountant by trade (trusted professional)
why does the RICS have rules of conduct?
Provide a frmanwork to work to and so clients know they are getting a set level of service
Useful professional guide for the RICS and its members
What are the RICS 5 principles of better regulation?
Proportionality
Accountability
Consistency
Targeting
Transparency
What is the role of the RICS
To promote and shape the development of suryerors in the professional sharing rules, guidance and practices to best self-regulate the profession for the benefit of its members, clients and wider public.
Key functions of the RICS?
Regulate
Apply legislation
Training / educate
Guidance
Rules / governance
Royal charter
who can use the designation “Chartered Surveyor”?
Sole practitioner who is a chartered surveyor.
Partnership if 50% or more of partners are chartered members (provided no Partner has been expelled and not re-admitted)
Company carrying out surveying services if 50% of principles are chartered.
This is defined in the bye-laws
What is the VOA Complaints Handling Procedure?
VOA has its own Complaints investigation team, we publish details of it and report it so clients are aware of it.
2 stages
VOA has Tier 1 (Business Stream); Tier 2 (Agency CIT); then as a govt body certain matters can be referred to an Ombudsman
where do you get indemnity insurance from?
List of approved insurers on RICS website
what is the clients money protection scheme?
Run buy the RICS
Provides for any member of the public to be reimbursed for their direct loss of funds
Provided through RICS insurance policy
What is the RICS professional statement that refers to client money?
RICS Professional Statement Client Money Handling
What is client money?
Any cash, cheque, draft or electronic transfer which an RICS regulated firm holds for or receives on behalf of another person.
What must firms do with holding client money?
Hold it in account which it has exclusive control.
Only hold client money
Account must include the word client with name of client.
Money is immediately available.
What are the requirements for run off cover?
£1,000,000 for 6 years.
What steps you must take when handling client’s money?
Clients must always have access to funds.
Client money must be kept separate and clearly identifiable.
Include ‘Client’ in account name
Interest on the account must be agreed with the client.
Maintain client ledger or running balance of any transactions.
Agree the terms and advise client on bank details.
Must not be overdrawn
