Ethics, Rules of Conduct & Professionalism

Question 1

What is the RICS motto?

Answer 1

‘Est Modus in Rebus’ - there is measure in all things.

Question 2

What is the RICS mission statement?

Answer 2

• To qualify and equip their members to offer the highest standards of professional service.
• To promote and enforce standards.
• To lead solutions to the major challenges facing the built environment through professional expertise.

Question 3

When was the RICS founded?

Answer 3

1868.

Question 4

What is the RICS history?

Answer 4

• Established in 1868 as Institution of Surveyors.
• Received Royal Charter in 1881.
• Added titles to become RICS in 1947.
• RICS HQ - Parliament Square, 12 Great George Street, London, SW1P 3AD.

Question 5

How is the RICS structured?

Answer 5

• The RICS is self-regulated and internally monitored meaning it is not regulated by the Government.
• The Bye-Laws determine how the RICS is regulated.
• The Privy Council Grants and awards Royal Charter.
• The Governing Council manage and agree strategy for the RICS.
• The Regulatory Board, Audit Committee and Management Board sit below the Governing Council and execute the strategy set by them.

Question 6

What is the Privy Council?

Answer 6

The Privy Council is an independent body/arm that is part of the UK government that ratifies the Bye-Laws and awards and grants Royal Charter to an institution.

Question 7

What is the difference between RICS ethics and rules?

Answer 7

• Ethics are a set of moral values.
• Rules are a framework that individuals within RICS work to.

Question 8

How many global professional ethical standards are there?

Answer 8

• Up until 1st February 2022 there were 5 GP&ES.
• From the 2nd February 2022 onwards the GP&ES have been consolidated within the New Rules of Conduct 2022.

Question 9

What are the Global Professional & Ethical Standards before 2nd February 2022?

Answer 9

• Act with integrity.
• Always provide a high standard of service.
• Act in a way that promotes trust in the profession.
• Treat others with respect.
• Take responsibility.

Question 10

When did the rules of conduct change and why?

Answer 10

• Changed on the 2nd February 2022.
• The previous rules had been in place since 2007.
• Following research and consultation with RICS members, firms and members of the public, they voted in favour of replacing the existing rules of conduct and GP&ES.
• To provide a single document to enable greater clarity for RICS members and firms.
• To enable greater focus on clearer example behaviours, understanding evolving technology and climate change.
• As the industry is constantly changing with evolving technology, the rules of conduct were changed to reflect current best practices and expectations.
• Changes in law and regulations also necessitate updates to ensure compliance with current legal and regulatory standards.
• Simpler structure to make it easier to understand and providing more confidence to clients and the public.
• Clearer examples of how members and firms can behave to comply with the rule.
• Focus on respect, diversity and inclusion.
• Tackling global challenges such as sustainable development and climate change.

Question 11

What are the 5 new Rules of Conduct?

Answer 11

1. Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS.
2. Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise.
3. Members and firms must provide good quality and diligent service. - Kick-off meeting with client to understand the scope of works required and follow up with writing for agreement.
4. Members and firms must treat others with respect and encourage diversity and inclusion.
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.

Question 12

What are the professional obligations of members?

Answer 12

• Members must comply with the CPD requirements of acquiring at least 20 hours each calendar year, of which 50% must be formal CPD.
• 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.

Question 13

What are the professional obligations of firms?

Answer 13

• Firms must publish a complaints-handling procedure (CHP), and alternative means of redress approved by the RICS and maintain a complaints log.
• Firms must ensure all previous and current professional work is covered by adequate and appropriate professional indemnity insurance that meets standards approved by the RICS.
• Firms with a sole practitioner must have a means of business continuity/locum agreement for professional work to continue in their incapacity, death or sabbatical.
• Firms must cooperate with the RICS.
• Firms must provide all necessary information as requested by the Standards and Regulation Board.
• Firms must display on their business literature that they are regulated by the RICS.
• Firms must report any matter they are required to report under the rules for the Registration of Firms.

Question 14

Why does the RICS have Rules of Conduct?

Answer 14

• To provide a framework that all can work towards and the client is aware they’ll be getting the set level of service.
• It is a useful professional guide for members that determine how members should behave in any given scenario.

Question 15

Your family member is a chartered surveyor and you find out he is working outside of the RICS Rules of Conduct. What do you do?

Answer 15

• I would verify the facts and confront them reminding them of their duties as a member of RICS.
• Inform the RICS specifying my relationship to the member and any corrective action which I believe my family member is committed to put in place.

Question 16

In the case of a breach of rule of conduct, what is the procedure?

Answer 16

• Not all shortcomings 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 compliance.
• Members must fully cooperate with all enquiries.

Question 17

How can a disciplinary proceeding be triggered?

Answer 17

• Someone complaining to the RICS.
• An allegation by a client or third party.
• Information received or established by the RICS.

Question 18

What actions can be imposed after the end of the investigation?

Answer 18

• Fixed penalty - fine by the RICS.
• Consent order - written agreement concerning a disciplinary issue on a breach. Can require the member or firm to take corrective actions, or restrain them from taking certain actions for a period of time and possibly pay a fine or cost.
• Disciplinary panel:
  
  • Used for more serious breaches.
  • Panel will usually be held in public.
  • Burden of proof is on the RICS.
  • Balance of probabilities approach will be adopted.

Question 19

What sort of breaches would result in expulsion?

Answer 19

• Gross, persistent and willful failure to comply with RICS Rules of Conduct.
• Fraud.
• Dishonesty.
• Conviction of a serious criminal offence.
• Gross incompetence.
• Deliberate discrimination.
• Misappropriation of a client’s money.

Question 20

What procedures must you follow if starting up a new practice?

Answer 20

• Contact the RICS for guidance and obtain a company start up pack.
• Inform the RICS and register for regulation.
• Appoint a contact officer for all RICS communication.
• Prepare a CHP.
• Obtain Professional Indemnity Insurance cover.
• Abide by the RICS rules of conduct for firms.
• Use the designation ‘Regulated by RICS’ on all practice materials.
• Register company with companies house.
• If sole trader then ensure there is business continuity or locum agreement in place.

Question 21

Would you advertise your new company in the press?

Answer 21

Yes as long as it is in a trustful and responsible manner in line with Rules of Conduct for firms.

Question 22

What insurances are needed if starting up one’s own firm?

Answer 22

• Professional Indemnity Insurance.
• Employer’s Liability Insurance.
• Public Liability Insurance.
• Building’s insurance of an office premises.

Question 23

What is meant by the term negligence?

Answer 23

• A duty of care is owed to all clients and 3rd parties using reasonable skill and care.
• Negligence is when there is a failure to provide reasonable skill and care that is owed to a client.
• In doing so, claims may arise resulting in damages being paid or a PII claim.

Question 24

What should one do in the event of a claim of negligence?

Answer 24

• Acknowledge the claim.
• Communicate with the client to understand the nature of the claim, gather relevant information and discuss potential resolutions.
• Seek advice from either a supervisor or legal advisors to determine the correct course of action to take.
• Inform insurers and ensure there is sufficient PII cover to handle the claim.
• Document the claim including all communication and actions taken in resolving the claim.
• Discuss resolution or mitigation strategies such as negotiation, mediation or formal dispute resolution procedures.
• Finally, reflect and learn from the experience to aid in professional development. Implement training and practices to ensure such events do not happen again.

Question 25

What is Merrit V Babb case law?

Answer 25

• This case highlights the importance of having run-off cover.
• A surveyor was sued for negligence by a former client.
• As the firm was no longer practising, the individual surveyor was pursued for damages successfully.
• As a result, this made the industry realise the need for run-off cover for all previous employees.

Question 26

What limitation periods are associated with under hand and deed contracts?

Answer 26

• 6 years when executed under hand.
• 12 years when executed as a deed.

Question 27

What do you do if you receive a letter of complaint?

Answer 27

• Acknowledge receipt of the letter and forward it to my firms designated complaint handler as per our complaint handling procedure and provide additional information as necessary.
• Highlight the importance of informing our PII providers immediately to ensure there is sufficient cover to deal with the complaint.

Question 28

What are the CPD requirements?

Answer 28

• Members must undertake and record appropriate lifelong learning.
• On request by the RICS, they must provide evidence of carrying out CPD to maintain and improve their levels of professional competence.

Question 29

How many hours of CPD must one do?

Answer 29

• A minimum of 20 hours CPD per calendar year, of which, 50% must be attributed to formal development.
• Members must also undertake learning the standards expected around RICS Ethics on a rolling 3 year period.
• All CPD must be recorded via the RICS on-line management system.

Question 30

How does one differentiate the different categories of CPD?

Answer 30

Use the CPD decision tree.

Question 31

What RICS communities are you aware of?

Answer 31

• RICS Matrics - An early career community designed to support students, apprentices, trainees and those who are newly qualified (up to 10 years), as they move into the industry.
• My RICS Community - A virtual community to connect with professionals across the built environment and discuss topics and exchange views and etc.
• Lionheart - A benevolent fund set up specifically to support past and present RICS professionals and their families through any of life’s unexpected challenges, from the beginning of their career through to retirement.

Question 32

What is PII and what is it’s purpose?

Answer 32

• PII is Professional Indemnity Insurance.
• Its purpose is to protect a client from financial loss arising from a breach of professional duty.

Question 33

Does PII only provide cover for the client?

Answer 33

• No, it also protects the professional and the firm.
• It protects the professional from financial loss.
• It also protects the firm as they do not have to meet the claim through their own assets and resources.

Question 34

What benefit does PII provide the client?

Answer 34

• The client is able to recover their financial losses.

Question 35

On what basis is PII underwritten in the UK?

Answer 35

On a claims made basis.

Question 36

What is meant by on a claims made basis?

Answer 36

The insurance policy is in place at the time the breach is discovered is responsible for providing indemnity, not the insurance policy in place when the breach was made.

Question 37

What are the requirements set by the RICS regarding PII?

Answer 37

• Policy cover must be made on an ‘each and every’ claim basis.
• RICS sets out the minimum levels of indemnity.
• RICS sets out the maximum levels of uninsured excess.
• Run-off cover must be in place for at least 6 years.
• Policy should cover for past and present employees, directors and partners.

Question 38

What are the RICS minimum levels of indemnity and maximum levels of uninsured excess?

Answer 38

Minimum levels of indemnity:
- Based on turnover:
- Less £100,000 = £250,000.
- Between £100,001 - £200,000 = £500,000.
- £200,001+ = £1,000,000.
Maximum level of uninsured excess:
- Based on turnover:
- £10,000,000 or less = the greater of 2.5% of the sum insured, or £10,000.
- £10,000,001+ = No set limit.

Question 39

What is meant by fully retroactive in a PII policy?

Answer 39

• The PII policy offers protection/cover for services rendered before the date of the policy.
• In other words it provides protection for claims arising from past work and not just work completed after the policy’s start date.

Question 40

What measures can be implemented to avoid PI claims?

Answer 40

• Keep full and detailed records of meetings and conversations.
• Record recommendations and advice given.
• Use proper documents 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.

Question 41

If there was a mistake in the cost plan that you prepared, what would your insurance company expect?

Answer 41

To notify them at the earliest opportunity and comply with any conditions set out in the policy.

Question 42

If an estimate prepared by a QS is incorrect, can the client claim damages?

Answer 42

• An estimate that is incorrect in itself does not warrant the client with the right of redress.
• The client must demonstrate 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 a number of reasons outside the QS’s control such as changes in market conditions or an item referred to in their exclusions.

Question 43

How can one limit their liability when agreeing terms of appointment with a client?

Answer 43

• Base the appointment on reasonable skill and care rather than fitness for purpose which is more onerous.
• If the client’s requirements are performance based, this may imply fitness for purpose. Request a clause limiting the appointment to reasonable skill and care.
• Run off over must be in place.
• Execution of the appointment under hand will result in reduced liability period of 6 years instead of 12 years.

Question 44

What are the main elements included within a fee proposal?

Answer 44

• Terms and conditions.
• Scope of services.
• Exclusions.
• Assumptions.
• CHP.

Question 45

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?

Answer 45

• If the project requirements have changed such as services, scope or value has increased then it is possible to ask the client for more money.
• If the scope of works has not changed, this would indicate a mistake within the fee bid and the additional work would need to be carried out at no extra cost.

Question 46

What is a conflict of interest?

Answer 46

• It prejudices impartiality.
• Where the duties and obligations of a professional are hindered in acting impartially due to self-interest in a matter.
• Existing relationships would result in reduced impartiality and Chartered Surveyors have an obligation to make clients aware of this and if necessary, decline work opportunities.

Question 47

If the client was insistent that you worked for them despite an existing conflict of interest, what would you do?

Answer 47

• Check the client’s understanding around conflict of interest.
• Make the client aware of the potential for reduced impartiality.
• If still insistent, seek a letter of instruction from the client to continue (informed consent).
• Following the appointment, agree working procedures to manage the conflict of interest with the client and teams involved.

Question 48

What are the main principles of the Bribery Act?

Answer 48

• Making a bribe.
• Receiving a bribe.
• Bribery of a foreign public official.
• Failure of a corporate entity to prevent bribery on its behalf.

Question 49

Under the Bribery Act, what circumstances would it be allowed for one to accept a bribe?

Answer 49

• If under duress.
• If there is a real and present risk or danger to life, limb or liberty.
• If you or companions are under immediate physical threat.
• Put safety first, make the payment and report the matter immediately or as soon as practicable to the manager or the ethics compliance contact.

Question 50

You are attending a main contractor business conference where it is announced that you have been randomly selected as the winner of this months prize draw to win an I-pad air. What would you do?

Answer 50

• I would be extremely uncomfortable accepting the prize in the scenario as it is of significant value and could be considered a bribe.
• Also, as I am working with the main contractor on an existing scheme could affect my duties in acting impartially.
• I would therefore decline the prize and suggest this is made as a charitable donation of the main contractor’s choice.
• I am aware bribes are commonly distributed as random prizes and due to the severity of it I would report the incident to my line manager.

Question 51

On the Ashman Bank project, you attended a meal by the client, why?

Answer 51

• As the project had come to a completion, my duties and obligations had come to surpass and with that the risk of acting impartially.
• However, before attending, I checked with my companies gifts and hospitality policy to ensure it was acceptable.

Question 52

Why did you reject a cricket day out with the contractor?

Answer 52

• As we were about to go out to tender with the contractor on a project and the value of the hospitality, it could be perceived as an offence under the Bribery Act.
• As this was the first time I had been invited by them, it was OK to simply decline explaining my reasoning behind the decision.
• However, if the contractor was persistent, this could indicate a red flag in which they may want to discuss things they don’t want to put in writing, as such, this would need to be reported as infringement.

Question 53

How did you advise on setting up professional indemnity insurance?

Answer 53

• The RICS have a document for UK PII requirements.
• It must be on an ‘each and every’ claim basis or aggregate plus unlimited round the clock reinstatement basis.
• Stating the RICS minimum limit of indemnity and the maximum levels of uninsured excess.
• Must be fully retroactive.
• Must be underwritten by an RICS listed insurer.
• Cover must be for all past and present employees, including directors and partners.

Question 54

Explain your understanding of the Bichard review?

Answer 54

• An independent review commissioned by the Governing Council in December 2021.
• Commissioned following the Levitt review and aimed to develop a new sense of purpose and director of the RICS.
• The review advised on 36 recommendations that include:
  
  • Commercial activity will now be separated from other activities within the RICS and led by a suitable qualified executive who reports to the commercial committee.
  • RICS Matrics should give younger members a stronger voice through an improved governance structure.
  • A diversity and inclusion panel to provide advice to the RICS board and standards and regulation boards.
  • Improvement of technology within the RICS.
  • A public interest panel setup to advise the Governing council.

Question 55

What are the main benefits of Diversity & Inclusion?

Answer 55

• Attracts skilled professionals from diverse backgrounds.
• Establishes sense of belonging among employees.
• Encourage employees to feel more connected.
• Increases productivity.
• Reduces staff turnover.
• Allows employees to be valued and accepted.

Question 56

You have received an email from a project team member where they have belittled you, what would you do?

Answer 56

• I would first bring it to the attention of a senior.
• If a senior authority is not able to deal with it then I would approach the individually privately addressing the concern and cause of their actions.
• Following this I would then propose a solution to resolve the issue and ensure we could work collaboratively moving forward with the project.

Question 57

What is a liability cap?

Answer 57

• It sets a limit by which client’s can bring forth claims against an individual or firm.