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APC 2021 > M05 - Conduct Rules, Ethics and Professional Practice > Flashcards

M05 - Conduct Rules, Ethics and Professional Practice Flashcards

1
Q

When was the RICS formed?

A

1868

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2
Q

What is the role of the RICS?

A
  • Regulate and promote the profession
  • Protect clients and consumers through a strict code of ethics and professional standards
  • Provide impartial, advice, analysis and guidance
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3
Q

Who is the RICS President?

A

Kath Fontana (as of November 2020)

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4
Q

What is the RICS motto?

A

Est modus in rebus; (“There is measure in all things”)

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5
Q

What are the 5 ethical standards?

A

I - T - HSS - R - R

  • Integrity
  • Trust
  • High Standard of Service
  • Respect
  • Responsibility
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6
Q

What are the 5 ethical standards?

A
  1. Act with Integrity – being honest & straightforward in all that you do. Trustworthy, respecting confidential information, ensuring that Duty of care upheld, not allowing bias, conflict of interest override your professional / business judgement. Acting in the public interest when making decisions, compliance with Bribery Act. Eg. Do not take bribes.
  2. Provide a high level of service – transparent about fees, act within your professional capacity, communication, informed decisions, fair treatment, e.g. is work done to the best of my ability (template for submissions, professionalism)
  3. Act in a way which promotes trust – in personal and professional life. Fulfil your obligations. E.g. being open, honest and transparent in meetings.
  4. Respect – act with courtesy, politeness, consideration. Cultural sensitiveness & business practice, zero tolerance to discrimination. E.g. remaining calm and recognising different view points / characters exist.
  5. Take Responsibility – Be accountable for your actions, skill, care, diligence, compliant, question something you didn’t think is right & be prepared to raise a matter within a firm / to the RICS. E.g if something is my fault admit it.
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7
Q

Why is it important to act with integrity?

A

It is important to act with integrity as I am representing both myself and the profession, and want others to view me in the best possible light

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8
Q

Tell me how you have adhered to one of the ethical standards?

A

I always provide a High Standard of Service to my Clients, performing to be the best of my ability, which will show myself and my company in a favourable light and potentially lead to further work in the future

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9
Q

Tell me how you have adhered to one of the Rules of Conduct?

A

Rules of Conduct - For Members

  • Communication
  • Ethical Behaviour
  • Competence
  • Service
  • CPD - APC = 48 hours / RICS = 20 hours (50% formal - 50% informal)
  • Solvency
  • Information to RICS
  • Co-operation
  • CPD - I ensure I fulfil my CPD requirements by completing further reading and attending events that will enhance my knowledge, through formal and informal means
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10
Q

What are the penalties for failing to adhere to the RICS ethical practices?

A

Investigation and possible disciplinary procedure by RICS

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11
Q

How would you contribute to the RICS?

A
  • CPD
  • Annual General Meeting
  • Mentor/counselling
  • Networking events
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12
Q

Have you been to any RICS events?

A
  • Regional award ceremonies

- Summer BBQ’s

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13
Q

What are the RICS 2020 UK fees? (Check these if outside of the UK)

A
  • APC Candiadate = £161

- MRICS = £354 (Newly qualified)

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14
Q

What is Lionheart?

A

RICS charity to help members and families when required

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15
Q

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

A

Imprisonment or fine

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16
Q

Tell me about the Bribery Act?

A
  • Introduced in 2010
  • Has extra-territorial reach both for UK companies operating abroad and for overseas companies with a presence in the UK
  • Breach comes with imprisonment or fine
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17
Q

If a tendering Contractor stood over his tender following a pricing error, what would you make the Client aware of in regards risks from this? What are the risks?

A
  • Possible financial strain
  • Potential programme delays
  • May cut corners in the project to recoup the shortfall
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18
Q

What are some of the rules of conduct for members?

A

The rules of conduct for members focus on communication, ethical behaviour, competence and CPD

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19
Q

What regulations are you aware of in relation to bribery?

A

The Bribery Act

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20
Q

You noted in your ethics level 3 about prelims not being included. This is very likely going to lead them to ask you a Procurement and Tendering question - what is the difference between Alternative 1 and 2 (JCT Tendering Practice Note 2012). I would also note in your example that it is tendered under Alternative 1, just to be clear. As under Alt 2 they can correct the price if it’s an error

A

Alternative 1 - The tenderer after being made aware of his error, can only stand over or withdraw his offer

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21
Q

Name some of the Rules of Conduct For Firms?

A
  • Requirement for Professional Indemnity Insurance
  • CHP (Complaints Handling Procedure)
  • Training and CPD procedures
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22
Q

A Client asks if he is insured for a scaffold collapse at his site - how would you advise him?

A

The appropriate insurances are in place to cover any accidents

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23
Q

A Sub-contractor contacts you to say he has not been paid for 3 months by the Main Contractor - how do you respond?

A

A Sub-contractor contacts you to say he has not been paid for 3 months by the Main Contractor - how do you respond?

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24
Q

What are the levels of PI insurance required in the RICS Code of Conduct and the given turnover levels they relate to?

A
  • £100,000 or less = £250,000
  • £100,001 to £200,000 = £500,000
  • £200,001 and above = £1,000,000
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25
Q

What is the aim of Professional Liability Insurance?

A
  • That, if a firm faces a claim, it is protected from financial loss that it cannot meet from its own resources
  • To protect the insured (member or firm) against the consequences of its liability to pay damages to third parties in respect of breaches of professional duty that it commits in the course of its professional activities
  • That the firm’s clients do not suffer financial loss which the firm cannot meet
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26
Q

It is Christmas time and a Contractor sends you a gift - what should you do?

A

I would give it back (Always give the most politically correct answer in these instances)

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27
Q

Can you receive gifts at any time of the year?

A

No

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28
Q

If a Contractor invites you to a sports game with the Client and Design Team on a project - what would you say?

A

I would politely decline

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29
Q

In what situation would you accept a gift or invitation?

A

If a Client was to host a celebration at the end of a project with the whole team

30
Q

If a sole principal/director was about to retire - what would they have to do? How long would that last?

A

Provide run off Professional Indemnity Insurance - covering 12 years

31
Q

If a Client was upset at the service he was receiving - what recourse would they have?

A

They could use the company Complaints Handling Procedure

32
Q

What are the insurances involved in the Construction Industry?

A
  • CONSULTANTS = Professional Indemnity Insurance
  • CONTRACTOR = All Risks Insurance
  • CONTRACTOR = Public Liability Insurance
  • CLIENT = Employers Liability Insurance
33
Q

What is the difference between Contractor’s All Risks and Public Liability Insurance, Employers Liability?

A
  • All Risks = Provides cover to damage to property, such as damage to the existing building in which the construction is being carried out
  • Public Liability = Provides cover for your legal liability in the event of damage to third party property or bodily injury to a member of the public whilst carrying out your activities. Normally £5 Million. But is unlimited if criminal negligence proven
  • Employers Liability = Provides cover in the event of bodily injury to your employees or labour only sub-contractors whilst carrying out work on your behalf. Typically £10 Million
34
Q

Why is PI Insurance required?

A
  • If you provide advice, design or a service to Clients, you should have PI Insurance
  • Covers claims made against the practice as a result of the conduct of the business
35
Q

What is a Net Contribution Clause?

A

Where two or more parties involved in a construction project are each jointly liable for the same loss or damage, the liability of each party will be limited to the amount which would be apportioned to that party by a court

36
Q

What is a Limitation of Liability?

A
  • Provides a cap on liability in a contract
  • Many Client’s ask for an Unlimited Liability when appointing services, which can be a very high exposure to risk
  • Typically 5-10 times the agreed fee
37
Q

If a Client asked you to quote for a project, what would you take into account?

A
  • Overall budget
  • Programme
  • Procurement route
  • Pre and post contract services required?
38
Q

What is a ‘Duty of Care’ and can you give an example?

A

A moral or legal obligation to ensure the safety or well-being of others. If I seen an unprotected excavation on site, I would inform the Site Supervisor

39
Q

What is a Conflict of Interest and can you give an example of how one might arise?

A
  • A situation in which the concerns or aims of two different parties are incompatible
  • If I am working for a QS firm and we are bidding for a public contract and a relative of mine works for the potential Client
40
Q

Why do you want to join the RICS?

A
  • Be recognised in my professional institution
  • It would be a proud achievement as its one of the most challenging chartership processes
  • Demonstrate my capability in my chosen profession
41
Q

A relative is tendering for a project you are the QS on, what should you do?

A
  • Ask the Client if you can continue with the bid?

- Remove yourself from the process

42
Q

What is an indemnity?

A

Security or protection against a loss

43
Q

What is D&O Insurance?

A
  • Directors and Officers Insurance
  • Cover is provided for past, present and future Director and Officers
  • Taken out in company name
44
Q

What additional insurance is taken out on a Design & Build project?

A

PI Insurance for the Contractor’s design

45
Q

What are the JCT insurance Options A-C on a Standard Building Contract?

A
  • Option A = New Build = Requires the Contractor to take out and maintain all risks insurance of the works
  • Option B = New Build = Requires the Employer to take out and maintain all risks insurance of the works
  • Option C = Existing Structures = Requires the Employer to take out and maintain a joint names policy, to cover both the employer and the Contractor for (a) insurance of the existing structure and their contents caused by ‘specified perils’ and (b) all risks insurance of the works
46
Q

Your project completes and is over budget and your Client does not want to pay your fees, what do you do?

A
  • Investigate
  • Consult Line Manager, Senior Colleague
  • Use CHP
  • Use ADR (Alternative Dispute Resolution) - Mediation etc
47
Q

Your Client demands that you lower your fee bid to beat that of a competitor. What do you do?

A
  • Public or private sector Client?
  • Ask myself is it ethically or morally correct?
  • Has the scope of service or specification been reduced?
  • Would be inappropriate as the original price quoted is the final cost + profit to carry out the service
48
Q

What are the principles of better regulation? (noted in the foreword of the RICS rules for members and firms)

A
  • Proportionality – regulators should only intervene when necessary. Remedy should be proportionate to risk posed / costs identified.
  • Accountability – justify their decisions.
  • Consistency – adopt a common sense approach – implemented fairly
  • Targeting – focused on the problem
  • Transparency – open and keep regulation simple and user-friendly.
49
Q

You mentioned that you always act within you capabilities – why is this important?

A

To ensure that I don’t advise incorrectly – negligence or error could lead to a claim being made

50
Q

Why were the Global Professional & Ethical Standards changed?

A
  • They changed in March 2012 to reflect RICS’ global expansions plans after considerable discussions with global & ethical bodies
  • They were reduced in order to be clearer and more applicable globally
  • The new standards still cover everything the previous 12 values covered
51
Q

How would you react when faced with a conflict of interest?

A
  • The best way of dealing with conflicts of interest is openness and transparency
  • Declare the conflicts to all appropriate parties as soon as possible
  • Offer to stand down from acting for any party
  • If any party objects, I would step away from the instruction
  • With written permission from the other parties, I would need to make the final decision on whether I felt comfortable to go ahead with the instruction
52
Q

How would you deal with a situation that you felt was unethical?

A

I would use the RICS professional & ethical standards decision tree to inform my course of action

  1. Do I have sufficient facts on the issue?
  2. Is it legal?
  3. Is it in line with RICS Professional and Ethical Standards?
  4. Have I consulted with appropriate people to make an informed decision?
  5. Do I have clear reasoning in reaching my decision? Is the decision informed?
  6. Would I be content for my actions to be made public?
53
Q

What is CSR?

A
  • Corporate Social Responsibility
  • Shows a firm’s compliance to laws / ethical standards / international norms
  • Encourages activities which impost positive impact regarding triple bottom line
54
Q

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

A
  • New procedures were put into place in June 2007
  • Not every shortcoming will necessarily give rise to proceedings
  • A formal investigation by the Head of Regulation of the RICS is th 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
55
Q

How can a disciplinary proceeding be triggered?

A
  • Someone complaining to the RICS
  • An allegation by a client or third party
  • Information received or established by the RICS
56
Q

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

A

a) Fixed penalty
b) Consent order
c) Disciplinary panel

57
Q

Give an example of when you had to remain objective in your work?

A
  • Whilst I owe a duty to my Clients to look after their interests, I need to remain objective at all times in my work
  • I always act openly and transparently both internally and externally
  • When administering a either a Professional or Construction Contract I always do so impartially
  • When assessing a tender submission, I always act openly and fairly and assess only the contain submitted as part of the Tender Package
58
Q

Can you describe an example of when the contractor was reporting one thing and you reported another?

A

On [SAMPLE PROJECT], the Contractor was reporting that works were being constructed on programme however, I disagreed with this as critical activities were clearly behind programme which would have implications for the Completion Date

59
Q

Which rules apply to firms and not members?

A
  • Clients’ Money – Preserve the security of clients’ entrusted to its care
  • Indemnity – Ensure all previous and current work is covered by PII
  • Complaints Handling – Operate a CHP and maintain a log
  • Advertising – Promote its professional services only in a truthful manner
  • Arrangements to cover the incapacity or death of a sole practitioner
  • Use of Designations – Must display on business literature the designation to the RICS
60
Q

What is bribe?

A
  • A bribe is an offer or the promise of an offer of value in an attempt to induce a dishonest outcome from a particular circumstance.
  • The offer, promise, giving, demanding or acceptance of an advantage as an inducement for an action that is illegal, unethical or a breach of trust.
61
Q

What must a complaints handling procedure be?

A
  • Fit for purpose – reflecting the size and structure of the business
  • It must be available and understood by all staff
  • It must be regularly reviewed at a senior level
  • It must be agreed with PII brokers / providers – should not compromise the PII cover
62
Q

On what basis is PII underwritten in the UK?

A

Claims Made - This is how PII is written
- A claims made policy will pay out for any valid claim made during the (typically 12-month) policy period, regardless of when the incident or alleged breach of duty actually occurred.
Claims Occurring
- On the other hand, your policy could be written on a ‘claims occurring’ basis – meaning it will only pay out for claims that arise out of loss or damage that actually happens during the (typically 12-month) policy period.

63
Q

What is run-off cover and why is it important?

A
  • Run off cover is an insurance that is used to protect a business and its employees from financial loss even after the business ceases to trade. To ensure that firms, members and their clients are not exposed to financial detriment in the period following a firm ceasing to trade, RICS requires firms to obtain fully retroactive run-off cover.
64
Q

What if there was bid rigging? How would you act?

A

Anti-competitive behaviour found in tenders.

  • Similar prices within breakdown.
  • Similar mistakes
  • Similar wording
  • Get legal advice & disqualify those involved from the tender
65
Q

What are the six principles of the bribery act?

A
  • Proportionality - The action taken should be proportionate to the risk and the size of the organisation.
  • Top level commitment - Those in senior positions are best placed to ensure the organisation conducts business without bribery.
  • 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 - This is about having a risk based approach to business relationships - with those you deal with or who provide services for you.
  • Communication - Employers will need to communicate their policies and procedures to staff and others who perform services, additional training may help raise awareness, and this would be proportionate to the size and type of organisation.
  • Monitoring and Review - Risks to your organisation may change, over time you may want to carry out regular reviews and re-assessments.
66
Q

How can a firm prevent money laundering?

A
  • Follow the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2018
  • Appoint a Money Laundering Reporting Officer
  • Do CPD
  • Do you due diligence
  • Seek advice from legal/financial teams
67
Q

What is PII?

A
  • A type of insurance policy that protects a firm and its employees from financial loss, should they be found to be negligent.
68
Q

What are the minimum uninsured excess levels?

A
  • Up to £500,000 indemnity level - The greater of 2.5% of the sum insured, or £10,000
  • Over £500,000, 2.5% of the sum insured
69
Q

What are the minimum levels of indemnity for PII?

A
  • Turnover 100k or less is - £250k minimum
  • 100-200k - £500k minimum
  • £200k & above is £1million of PII.
70
Q

What happens if you fail to keep your CPD records

A
  • 1st Breach: Caution (called a Fixed Penalty caution) will remain on your disciplinary record for 10 years.
  • 2nd Breach: Further caution and a fixed penalty of £150 or local equivalent.
  • 3rd Breach: Referral to a disciplinary panel which may result in expulsion from membership and likelihood of costs being awarded against you.
71
Q

What are the is considered bribery?

A
  • Offer a bribe
  • Accept a bribe
  • Bribing a foreign public official
  • Failure of a commercial organisation to prevent bribery

APC 2021 (14 decks)

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