Professional Ethics - Must Know Flashcards
What does PII stand for?
Professional Indemnity Insurance
PII provides financial cover in the event a client suffers loss due to a breach of professional duty.
What are the sub-headings related to PII?
- Maximum uninsured excess
- Minimum levels of indemnity
- PII requirements
- Claims Made basis
- Merit vs Babb
- Limitation period for PII
What was highlighted by the Merrit vs Babb case law?
- Importance of having run-off cover
- Surveyor sued for negligence
- Surveying firm no longer existed, individual surveyor pursued
- Caused industry-level shock regarding run-off cover
What level of run-off cover is required for PII?
- Fully retroactive
- For all former and present employees
- £1,000,000
- 6 years
- Access to the Run-off Pool if unattainable
What is the purpose of PII?
To provide financial cover in the event a client suffers loss as a result of a breach of professional duty
What are the minimum levels of indemnity related to turnover?
- £100K or less = £250K cover
- £100K-£200K = £500K
- £200K+ = £1M
What is the maximum uninsured excess for PII?
£10,000.00 or the greater of 2.5% or £10K
What does Claims Made Basis refer to?
The policy in place at the time of claim is responsible, not the policy at the time of the breach
What are the limitation periods for PII?
- 6 years when executed under hand
- 12 years when executed as a deed
What must a regulated firm’s complaints handling procedure include?
- Model form from RICS
- Redress mechanism
- Policy details issued to client
- Clear, quick, transparent, impartial process
- Name and contact details of investigator
- Investigation within 28 days
- Record all complaints and outcomes
- Notify PII insurers immediately
- Minimum of two stages
What are the procedures for setting up a practice?
- Contact RICS for guidance
- Inform RICS and register for regulation
- Appoint a contact officer
- Prepare a complaints handling procedure
- Obtain Professional Indemnity Insurance
- Abide by the Rules of Conduct for Firms
- Use ‘Regulated by RICS’ on all material
What insurances are required for a practice?
- Professional Indemnity Insurance
- Employers Liability
- Public Liability
- Buildings insurance of office premises
What annual returns are required by firms?
- Carried out online
- Failure leads to a fixed penalty
- Includes type of business, staffing, nature of clients, training provision, complaints handling procedure details, PII details, and whether the firm holds clients’ money
What procedures must RICS regulated firms follow regarding client accounts?
- Clear segregation of duties
- Principal oversees client money functions
- Competent staff to process client money
- Secure accounting systems
- Separate identifiable client bank accounts
- Clients must have access to funds
- Maintain client ledgers
What is a client money protection scheme?
A scheme operated by RICS to reimburse public members for direct loss of funds when using an RICS regulated firm
What is the RICS motto?
Est Modus in Rebus - There is meaning in all things
When was RICS founded?
1868
Who granted the charter to RICS and when?
Privy Council, 1881
How is RICS structured?
- Self-regulated and internally monitored
- Governed by By-Laws
- Governing Council manages strategy
- Regulatory Board, Audit Committee, Management Board execute strategy
What is the mission statement of RICS?
- Qualify and equip members for high standards of professional advice
- Promote and enforce standards
- Lead solutions to major challenges in the built environment
What are the CPD requirements for RICS members?
- Undertake and record lifelong learning
- Minimum of 20 hours of CPD per year, 10 of which must be formal
- Learning on ethics every 3 years
- All CPD recorded via RICS online management system
What are the professional obligations of MRICS members?
- Comply with CPD requirements
- Cooperate with the RICS
- Provide requested information to the Standards and Regulation Board
What are the professional obligations of RICS regulated firms?
- Publish complaints handling procedure
- Ensure adequate professional indemnity cover
- Make arrangements for professional work continuity
- Cooperate with RICS
- Provide requested information to the Standards and Regulation Board
- Display RICS designation on business literature
- Report required matters to RICS
What are the RICS’s 5 principles of better regulation?
- Proportionality
- Accountability
- Consistency
- Targeting
- Transparency
Why were the previous Global Professional & Ethical Standards replaced in 2022?
- Existing rules since 2007
- Majority voted for clearer standards
- Aim for clarity for members and firms
- Greater focus on example behaviors, evolving technology, and climate change
