Matt - Ethics - Level 1 Flashcards
What are the RICS Rules of Conduct?
Rules that members and firms must follow to achieve the highest level of ethical standards within surveying.
What is Rule 1?
Members and firms must be honest and act with integrity, comply with their professional obligations, including obligations to the RICS.
What is Rule 2?
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?
Members and firms must provide good quality and diligent service.
What is Rule 4?
Members and firms must treat others with respect and encourage diversity and inclusion.
What is 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.
Can you give me an example of how you’ve followed one of the rules?
When is a time when you’re fallen short of one of the rules of conduct?
I fell short on Rule 3 with a DWP case. I was new to my rotation and for my first case for this type of work, I underestimated the complexity of the case and I missed the deadline as a result.
Whilst not a huge issue and I completed it shortly after, going forward I have always been on top of this work and timely in my manner.
Would you accept a dinner offer from your client?
No I wouldn’t.
Why wouldn’t you accept a dinner offer from your client?
My current employer rules don’t allow me to do this, but even if working for another firm or for myself, accepting the offer of dinner could be misconstrued and offer doubt about my impartiality.
To avoid this scenario, I would politely decline.
What is the RICS’s guidance in relation to gifts and hospitality?
RICS state to never accept gifts or hospitality from a 3rd party supplier or contractor, and that certain types of lavish corporate entertainment could be classified as bribery.
Offering or being offered reasonable and proportionate hospitality such as a meal or sporting tickets will not constitute an offence in RICS eyes as long as this is accurately recorded in a gifts and hospitality register.
What is the VOA’s guidance in relation to gifts and hospitality?
Polite but firm refusal.
VOA employees are only permitted to accept gifts/hospitality of a trivial nature such as food/drink at a public setting where it’s available to other attendees, likewise with certain gifts such as pens or calendars, but these items have to be declared within our internal gifts and hospitality register.
What is bribery?
It is an offer or acceptance of an advantage as an inducement for an action that is illegal, unethical or a breach of trust.
What is the principal legislation for bribery?
Bribery Act 2010
What are the four offences found within the Bribery Act 2010?
1) Offering, promising or giving a bribe to another person.
2) Requesting, agreeing to receive or accepting a bribe from another person.
3) Bribing a foreign public official.
4) Failing to prevent bribery.
What is not prohibited by the bribery act?
Gifts and Hospitality
What is the RICS Decision Tree?
This is a diagram for members and firms to follow when in a difficult situation and unsure on what steps to take.
The diagram will help advise on what steps to take.
What do you do in the event of being offered gifts and hospitality?
I would have regard to my employers policy as well as relevant RICS guidance.
What do you do in the event of being offered a bribe?
Report this immediately to my line manager.
What must members ensure they know about bribery and corruption?
- They must not directly or indirectly offer or accept a bribe.
- Have adequate knowledge of bribery and corruption.
- Must immediately report activity of any bribery and corruption.
Is there any RICS guidance in relation to bribery?
Yes, a Professional Statement called “Countering bribery, corruption, money laundering and terrorist financing.” 1st edition February 2019
What are the 6 principles under the Bribery Act 2010?
- Proportionality
- Top level commitment
- Risk assessment
- Due diligence
- Communication
- Monitoring and review
Can you name any other legislation related to the bribery act?
Money Laundering Regulations 2019
Proceeds of Crime Act 2000
Terrorism Act 2000
What are some steps you could take to identify money laundering?
- Stringent ID checks
- Don’t accept large cash payments over €10,000
- Appoint a money laundering officer
- Keep up to date records
- Perform AML checks on clients
- Provide training for employees on money laundering
What are some of the penalties for money laundering?
- If found to have assisted in money laundering then unlimited fines or up to 14 years in prison
- If found to have tipped off about an investigation then 5 years in prison
What is customer due diligence?
This involves collecting evidence to verify the identity of different types of clients when assessing risks to your business
There is both simplified and enhanced due diligence.
What is client money?
Any money held and received by a firm which doesn’t solely belong to it
Can you give some examples of when you would be required to handle clients money?
- Tenants deposits
- Fee money taken in advance
- Clients money held but due to be paid to contractors
- Service charges
Are you aware of any RICS guidance for handling client money?
Yes, the RICS professional standard: Client money handling (1st edition, October 2019)
How should you handle clients money?
- Hold it in a separate named account
- Must be able to identify the client
- Don’t go overdrawn
- Client can request the money at anytime and it must be returned in a reasonable timeframe
What is a conflict of interest?
A situation where the duty of an RICS member or firm is potentially compromised by the fact you have a material interest at stake in the matter.
Why are you required to check whether you have conflict of interests?
As per the RICS professional standard “Conflicts of interest” 1st edition.
Members are required to not have conflicts of interest so that we can carry out our duties to clients objectively and independently, without interference.
What are the different types of conflict of interest identified by the RICS?
- Own interest (Personal)
- Party (professional)
- Confidential information
What is party conflict?
A situation where the duty of an RICS member or an RICS regulated firm appointed to act in the interests of a client or other party has a conflict with a duty owed to another client or party in relation to the same or related assignment.
What is own interest conflict?
A situation in which the duty of an RICS member or RICS regulated firm appointed to act for a client, conflicts with the interests of that same RICS Member/Regulated firm.
What is confidential information conflict?
A conflict between the duty of an RICS member to provide material information to one client, and the duty of that same RICS member to another client to keep that same information confidential.
How do you manage conflict of interests?
I would have regard to:
- Whether my organisation is currently acting or has acted previously for a property for another client
- Continuous communication between people involved to identify conflicts
- Notify if unsure
- Seek advice available from senior staff
What is the three step process for managing conflicts of interest?
- Conflict identification
Then either:
- Conflict avoidance (irresolvable conflict, cannot be managed e.g. no one can else can take the case or my organisation can’t pick up the work)
OR
- Conflict management (Informed consent route, information barrier/Chinese wall put in place or a different person works on the case)
What is informed consent in relation to conflicts of interest?
This is where consent is sought between parties where a conflict of interest has been identified and is:
- In the interests of all those who are or may be affected
- Not prohibited by law
- The conflict won’t prevent the provision of competent and diligent advice to those that may be affected
How must an information barrier or Chinese wall be enacted for it to be successful?
Must be an established part of a firms culture and:
- Must be robust enough so that no information passes through
- Individuals acting for conflicting clients must be different
- Physical separation (different part of building or different building)
- Barrier must be actively monitored by a third staff member not involved with cases
What is professional indemnity insurance (PII)?
Insurance that allows an RICS member or firm to have financial liability protection from a negligence claim, whilst also protecting the firms clients from financial loss that the firm can’t meet.
Is there any RICS publications about professional indemnity insurance (PII)?
Yes - Professional indemnity insurance requirements, 2022
What are the minimum levels of indemnity linked to?
A firms turnover
Can you tell me about the minimum levels of indemnity insurance?
If a firms turnover is £100,000 or less, then the minimum level of indemnity insurance is £250,000.
If a firms turnover is between £100,001 and £200,000, then the minimum level of indemnity insurance is £500,000.
If a firms turnover is £200,001 or more then the minimum level of indemnity insurance is £1,000,000.
Can you tell me what the RICS assigned risk pool is?
This is an RICS scheme where a new firm which is unable to get PII cover elsewhere can enter this scheme to get PII cover.
How long can a firm stay in the RICS assigned risk pool for?
3 years
How long should run off cover last for?
A minimum period of 6 years, but RICS recommend up to 15 years
How long can a negligence claim be brought after the event?
Up to 15 years after the event.
What is CPD and what is the RICS policy for it?
Continuous Professional Development
APC candidates are required to complete 48 hours every year for their structured training of which 50% must be formal.
MRICS or FRICS are required to complete 20 hours every year of which 50% must be formal.
Why do the RICS require members to carry out CPD?
It allows members to continuously update their skills and knowledge in order to remain professionally competent.
What is the difference between formal and informal CPD?
Formal CPD is learning which has clear learning objectives and outcomes like in training or seminars.
Informal CPD is self managed learning that is relevant to a members professional role.
What are some of the steps you would take when setting up your own firm?
- Notify the RICS and ensure that the RICS logo is present
- Ensure I’ve got adequate PII cover
- Suitable complaints handling procedure
- Client money handling procedures in place
- Comply with statutory requirements (health and safety, employment legislation, data management)
- Provide training for colleagues for CPD requirements.
What are some steps you would take when closing down a firm?
- Inform the RICS
- Inform clients, employees and other relevant stakeholders
- Have suitable client money handling procedures in place to return this money
When are firms required to register for regulation by the RICS?
- If the firm provides surveying services to the public
- The firm is operating in regulated area A
- At least 50% of the firms principals are RICS members
When are firms eligible to register for regulation by RICS?
- The firm provides surveying services to the public
- At least 25% of the firm’s principals are RICS members
What are some of the benefits of RICS regulation?
- Globally recognised standards
- Ethical and acting with honesty and integrity
- Required skills and competencies to do the job
- Safeguard client money
- Transparency with conflicts of interest
- Handle complaints and disputes fairly
Is there any RICS guidance for the registration of firms?
Rules for the Registration of Firms V6 effective 01 April 2020
What is the RICS motto?
Modus est rebus - there is a measure in all things
Is the RICS an institution or an institute?
Institution
Who is the current RICS President?
Tina Paillett
Who is the current RICS chief executive?
Justin Young
What is the RICS’s Royal Charter?
It means that RICS have a seat on the privy council that advise HM Government.
What does the Royal Charter entail that members must do?
Promote the surveying profession for the public benefit.
Are the RICS regulated or self regulatory?
Self regulatory as per the Royal Charter
What is the structure of the RICS?
At the top is the Privy Council, then immediately below is the Governing Council.
To the side of the Governing council is the Regulatory Tribunal which acts as in independent chair.
Below the Governing council is the standards and regulations board, management board and audit committee.
How many member professional obligations are there?
3
What are the 3 member professional obligations?
- Members must comply with the CPD requirements set by RICS.
- Members must cooperate with RICS.
- Members must promptly provide all information reasonably requested by the Standards and Regulations Board or those exercising delegated authority on its behalf.
How many obligations are there for RICS regulated firms?
7
What are the 7 obligations for RICS regulated firms?
- Firms must publish a complaints handling procedure, including an ADR provider approved by RICS and maintain a complaints log.
- Firms must ensure all previous and current professional work is covered by adequate PII cover that meets RICS standards.
- Firms with a sole principal must make appropriate arrangements for their professional work to continue in the event of their inability to continue working e.g. death or illness
- Firms must cooperate with RICS.
- Firms must provide all relevant information to Standards and Regulations Board or those exercising delegated authority for it when required.
- Firms must display on their business literature, in accordance with RICS published policy on designations to show 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 bye laws?
The enabling principles underpinning rules and regulations.
There are 10 of them.
What are regulations?
These build on the bye laws with details about things like fees and membership.
There are 10 regulations.
What is a locum agreement?
These are arrangements that take place when a sole practitioner is incapacitated. Can be an RICS member or another suitably qualified professional such as a solicitor.
It covers aspects such as death, long term illness, long term holidays and unseen or unavoidable events.
Is there any guidance from RICS for complaints handling
There is a guidance note on complaints handling published in July 2016
What is the RICS complaints handling procedure?
Procedure must be captured in Terms of Engagement
Stage 1 is in house. Complaints handling procedure must be disclosed, complaints handling officer appointed who must investigates
7 days for acknowledgement and substantive reply within further 21 days, and completed investigation at 28 days.
If unhappy with resolution of Stage 1 then it moves to Stage 2.
Stage 2 is ADR - third party resolution such as RICS dispute resolution service or Ombudsman services.
What is Alternative Dispute Resolution (ADR)?
This refers to methods used to resolving a dispute without going to court.
What are some types of alternative dispute resolution?
- Arbitration
- Adjudication
- Mediation
- Expert determination
- Ombudsman
What happens if alternative dispute resolution is unsuccessful?
Then the dispute will go to Court (also known as litigation.)
What is the difference between a liability cap and a professional indemnity insurance cap?
Liability cap is the maximum amount you can be liable for in the event of negligence.
Professional indemnity insurance cap is the maximum amount an insurer will pay out.
What are the 5 principles for better RICS regulation?
- Proportionality
- Accountability
- Consistency
- Targeting
- Transparency
If you set up your own firm, how would you know what fees to charge?
I would have regard to market figures currently being charged
What is the VOA complaints handling procedure?
- Business stream - dealt with by me or line manager
- Dedicated complaints handling team - if unhappy with the first stage.
If unhappy with the second stage then they can appeal to the Property Ombudsman
Who is the President elect of the RICS?
Justin Sullivan
Who is the senior vice president of the RICS?
Nicholas MacLean
When did the RICS receive royal assent?
1881
What are the penalties for bribery?
Maximum 10 years in prison and/or unlimited fine
What amendments have been made to the money laundering regulations?
Cryptocurrency and art could be used to money launder
What three things should you do before accepting an instruction?
- Am I competent?
- Terms of Engagement
- Conflict of Interest
What is the Proceeds of Crime Act 2000?
Legislation introduced to combat money laundering:
It makes it illegal to:
Conceal laundered money
Acquire laundered money
Arrange/facilitate for laundered money
When would you decline an instruction?
- Not competent
- PII not in place
- Illegal or unethical request
- Conflict of interest
- Suspicious activity e.g. money laundering
What are the maximum levels of uninsured excess for PII in the UK?
If a firms turnover was £10,000,000 or less then the maximum uninsured excess is the greater of 2.5% of the sum insured or £10,000
If a firms turnover was above £10,000,000 then the maximum uninsured excess has no limit.
