Ethics Flashcards
(196 cards)
1
Q
When was the RICS founded?
A
1868
2
Q
What does RICS stand for?
A
Royal Institution of Chartered Surveyors
3
Q
What is the role / purpose / mission statement of the RICS?
A
- Advancing ethical and technical standards for land, property and built environment professionals
- Protecting and providing benefits to users by enforcing standards and codes of best practice
- Providing expert impartial advice to governments, businesses etc. to lead solutions to major challenges
- Equipping members with leading edge advice, market insight and professional training
- Promote RICS status in worldwide markets
4
Q
What is the Royal Charter?
A
- Initially awarded in 1881 by Queen Victoria
- Advised by Privy Council, gives RICS legal responsibilities
- Requires RICS to promote usefulness of profession for advantage of UK public
- Grants RICS power to govern its own affairs
5
Q
Where are the RICS international headquarters located?
A
12 Great George Street, Parliament Square, London
6
Q
What is the motto of the RICS?
A
“Est modus in rebus” - there is measure in all things
7
Q
What are the goals of the RICS?
A
RICS Business Plan 2021-2022 incorporates Levitt Report Recommendations:
- More transparency about institutional operation, decision making, finances
- More effective whistleblowing arrangements
- Review senior executive reward arrangements
- Minimise increased costs to subscription levels
- Continued support to profession in recovery from COVID-19
- Use surplus cash to pay back furlough monies
- Reduce need to access external financial support
8
Q
White is Lionheart?
A
- Independent charity run by RICS professionals for RICS professionals and their families
- Provides services including financial support, health and wellbeing packages, free professional counselling, work-related support, legal advice
9
Q
What is RICS Matrics?
A
- RICS body that supports new members entering into profession
- Aims to shape future of surveying, grow size and respect of profession globally
- Provides CPD sessions and networking events
10
Q
Why do you want to become a chartered surveyor?
A
RICS is the largest international property institution in the world - global recognition, become part of international professional community, promote best practice
11
Q
What are the RICS’ 5 principles of better regulation?
A
Proportionality
Accountability
Consistency
Targeting
Transparency
12
Q
Why are the RICS’ principles of better regulation relevant?
A
Proportionality - penalties and actions have to reflect scope and level of work involved
Accountability - take responsibility for our actions
Consistency - promote confidence in profession
Targeting - regulation must reach targeted audience to have an affect
Transparency - ensure regulations are interpretable for fairness and accountability
13
Q
How have you used one of the RICS 5 principles of better regulation in your private life?
A
Transparency - I let people know my commitments and availability before committing to plans
14
Q
How does RICS communicate with its members?
A
- News and insights (website / MODUS magazine)
- Issuing professional statements and guidance notes
- Training and networking events
- Products and services (i.e. isurv)
15
Q
Can you describe the RICS logo?
A
- White lion
- Crown
- Tongue sticking out
- Purple background
16
Q
Can you give me an overview of the RICS governance structure?
A
Dated March 2023 on website
[- Privy Council]; issue and maintain Royal Charter Status
- Governing Council; Approve and set RICS strategy, standards and regulation. Has President, President-Elect, Senior Vice-President etc.
- Standards and Regulation Board; RICS members and independent non-members exercising regulatory functions. They oversee entry and admission to profession, monitor professional and educational standards.
[- Regulatory Tribunal]; independent judicial body
- RICS Board; delegated authority from Governing Council, oversees day-to-day operation, agree and manage delivery of RICS business plan. Has executive team (CEO, CFO etc)
- Audit, Risk Assurance and Finance Committee; monitors RICS financial reporting, internal control and risk-management systems
- Nominations and Remuneration Committee; Ensure suitable recruitment and review remuneration strategy
- World Regional Boards and Market Advisory Panels; deliver agreed RICS strategy, advise optimum approach for implementing research and activities
17
Q
Where are the 5 World Regional Boards?
A
- Americas
- Middle East and North Africa (MENA)
- Asia Pacific
- Europe
- UK and Ireland
18
Q
Where are the Market Advisory Panels?
A
- Middle East and North Africa (MENA)
- Sub-Saharan Africa
19
Q
Who is the RICS president?
A
Ann Gray (since January 2023)
20
Q
What is the RICS president promoting?
A
Note from April 2023:
- Transformation
- Recruiting Diversity, Equity and Inclusion Chair (Dr Louise Brooke-Smith OBE FRICS - first female RICS president)
- Recruiting Sustainability Panel Chair (Frank Hovorka MRICS)
21
Q
Who is the RICS president elect?
A
Tina Paillet (since January 2023)
22
Q
Who is the RICS senior vice president?
A
[will be elected May 2023]
23
Q
How are the RICS president, president elect and senior vice president elected?
A
By the Governing Council - Vice President becomes President Elect, then onto President
24
Q
What are professional groups within the RICS?
A
- How RICS segments technical specialisms
- Comprises 18 groups
- Undertake research to support professionals, providing practical guidance and training
25
How can you get involved with professional group?
Join sector insight community, participate in Leaders Forum or join Working Group
> Express interest on website via email
> Pass professional assessment / demonstrate area of expertise
> Join max 3
26
Can you name some of the professional groups?
- Quantity Surveying and Construction
- Project Management
- Building Surveying
- Building Control
- Dispute Resolution
- Valuation
- Planning and Development
- Rural
27
How many levels of RICS membership are there?
- Training
- AssocRICS
- MRICS
- FRICS
28
Why was the Levitt Review commissioned?
Conduct independent review onto historic treasury management matters and subsequent actions at RICS
29
Key objectives of the Levitt Review?
- Consider how internal reporting commissioned and dealt with
- Consider any shortcomings
- Make recommendations for the future
30
Key conclusions of the Levitt Review?
- RICS didn't follow sound governance principles
- Lack of clarity around roles and responsibilities of various boards, senior leadership and management
31
What is the Bichard RICS review and why was it commissioned?
- Commissioned by Governing Council in Dec 2021, following recommendation in Levitt Levitt Review that 'wide-ranging examination of purpose, governance and strategy' should be conducted by external reviewer
32
What was Lord Bichard's remit?
- Aim to clarify RICS purpose
- Make proposals on governing structure and incoming leadership
- Make proposals on strategy
33
Key recommendations of the Bichard review?
36, including:
- Renewed and increased focus on public interest
- Maintain self-regulation
- Increased focus on D&I
- Empower and enable members through greater support for regional boards
- Simplified, clear, accountable governance structure
- Independent review of RICS governance effectiveness every 5 years
- Greater leadership on key societal issues (sustainability)
34
How does RICS ensure standards of professional conduct and practice are upheld?
- Rules of Conduct (effective 2/2/22)
- Applies to all members and firms regulated by RICS
- Based on ethical principles of honesty, integrity, competence, service, respect and responsibility
35
Why does RICS have Rules of Conduct?
- Framework for members to work to
- Client knows they are getting a minimum standard of service
- Useful professional guide for individual members
36
List the Rules of Conduct
Members and firms shall:
1. Be honest, act with integrity and comply with their professional obligations, including obligations to the RICS
2. Maintain professional competence, ensuring services are provided with competent individuals with necessary expertise
3. Provide good quality and diligent service
4. Treat others with respect and encourage diversity and inclusion
5. Act in the public interest, take responsibility, act to prevent harm and maintain public confidence in the profession
37
Which 2 of the Rules of Conduct means the most to you and why?
i.e.
- Honesty and integrity - my role often puts me in a position of responsibility so I have to act with integrity and impartiality
- Treat others with respect - aligns with President Ann Gray's rolling out of DEI and Sustainability chairs- inspiring seeing progress and drive to encourage younger generations into profession
38
Name 5 example behaviours to comply with Rule 1.
- Do not mislead others through my actions or omissions
- Do not be improperly influenced, i.e. by gifts and hospitality
- Be open and transparent about fees
- Identify potential conflicts of interest before accepting work
- Don't take unfair advantage of others
(- Don't commit financial crimes
- Don't misuse client money)
39
Name 5 example behaviours to comply with Rule 2.
- Ensure adequate knowledge, resource and ability before accepting tasks
- Comply with CPD requirements
- Keep up to date with relevant legislation
- Check subcontractors have necessary skills, knowledge, resources
- Reflect on work undertaken and practice these lessons learnt
40
Name 5 example behaviours to comply with Rule 3.
- Fully understand client's requirements before accepting work
- Appropriate internal QA processes
- Encourage sustainability
- Consider benefits and considerations of relevant technologies
- Clear communication
41
Name 5 example behaviours to comply with Rule 4.
- Don't discriminate
- Don't victimise / bully / harass anyone
- Ensure supply chains don't utilise modern slavery
- Report abusive labour practice to recognised authority
- Work cooperatively
(treat others with courtesy)
42
Name 5 example behaviours to comply with Rule 5.
- Support clients / colleagues reporting concerts in good faith
- Don't dissuade potential claimants
- Cooperate with complaints investigations
- Manage professional finances responsibly
- Ensure public statements don't undermine profession
43
Can you list the core professional obligations for members and firms detailed in Appendix A of the Rules of Conduct?
Members:
1. Comply with CPD
2. Cooperate with the RICS
3. Provide info reasonably requested by SRB (or delegated authority)
Firms:
1. Cooperate with RICs
2. Provide info reasonably requested by SRB (or delegated authority)
3. Have a complaints handling procedure
4. Adequate Professional Indemnity Insurance for work
5. Put RICS designation on professional publications in accordance with professional statement
6. For firms with sole principal, ensure there is cover in the event of an employee's inability to work
7. Report matters required under Rules for Registration of firms
44
Can you explain how you act with integrity?
- Being trustworthy
- Being open and transparent in the way I work
- Respect confidential information
- Don't take advantage of others
- Not being improperly influenced in my decisions
45
How do you take responsibility?
- Being accountable for my actions
- Ensure appropriate complaints handling procedure in place
- Act with skill, care and diligence
- If I think something isn't right, respectfully challenge and raise matter with colleagues
46
How do you treat others with respect?
- Treat everyone with courtesy, politeness, consideration
- Never discriminate against anyone
47
How do you provide a high standard of service?
- Ensuring I have professional responsibility, resources and experience to give best possible advice and support
- Acting within my scope of competence
- Transparency with fees
- Clear communication to allow informed decisions
48
How do you promote trust in the profession?
- Considering how my actions affect others and the environment
- Fulfilling professional obligations
- Acting in trustworthy manner in both professional and private life
49
Can you clarify what an individual should do to maintain a high ethical standard in their profession?
- Keep own actions recorded and under review
- Maintain CPD appropriate to their area of work
- Follow advice by professional bodies on ethical behaviour
- Note any unethical behaviour by others and address where appropriate
50
What can employers do to create an ethical environment?
- Establish confidential procedures for whistleblowing
- Include ethical evaluations in appraisals, employee hiring, contracts and training
- Adequate planning, training and performance monitoring
- Encourage staff to progress APC and become chartered with RICS
- Promote relevant CPD
51
Difference between ethics and integrity?
Ethics = overall moral picture - moral principles governing person's behaviour
Integrity = more focus on personal characteristics - having honest, strong moral principles and values
52
Difference between ethics and RICS Rules of conduct?
Ethics = set of moral values
Rules of conduct = framework we work to as professionals
53
What tools produced by the RICS are available to help members make ethical decisions?
Ethics decision tree
54
What sort of decision would you consult the tree about?
Any ethical issue, provides step-by-step practical guidance
55
When did the Rules of Conduct change?
2nd February 2022
56
How many Global Professional and Ethical Standards are there?
- Until 1/2/22 - 5
- From 2/2/22 - Global Professional and Ethical Standards now consolidated within the New Rules of Conduct 2022
57
Can you explain the steps of the RICS Ethics decision tree?
- Sufficient facts?
- Legal?
- In line with the RICS Rules of Conduct?
- Consulted with appropriate people to make informed decision?
- Clear reasoning?
- Content with actions being made public?
If yes, decide action, act and record decision and reasoning. If no to any, do not proceed.
58
What are the Global Professional and Ethical Standards? [now archived]
- Act with integrity
- Provide a high standard of service
- Act in a way that promotes trust in the profession
- Treat others with respect
- Take responsibility
59
Why did the previous Rules of Conduct change?
- Following research and consultation with RICS members, firms, members of the public - the majority voted in favour of replacing existing documents
- Single document enabled greater clarity
- Now greater focus on clearer example behaviours, understanding evolving technology and tackling climate change
60
What are the changes to the Rules of Conduct?
- New Rules of conduct overhaul rules of conduct for members, rules of conduct for firms, global professional and ethical standards
- Appendix A now contains the professional obligations of Members and Firms
61
Are you aware of any RICS regulation on the use of social media accounts?
- Use of Social Media Guidance for RICS members, V1 (effective 30/06/2021)
Overarching principles:
- Standards expected of members don't change because they are communicating via social media instead of face to face / other traditional media
62
You attend a work event and witness 2 junior colleagues acting in a way which could bring your firm into disgrace. What would you do in this situation?
- Speak with them
- Take steps to prevent reputational damage / embarrassment
- Address actions formally in working hours
63
RICS professional standards - what are they and what is their status
- International standards (IPMS); developed with other bodies for global use
- Professional statements (conflicts of interest); mandatory requirements
- Guidance notes (cost reporting); Non-mandatory recommendations of best practice
- Codes of practice (code of measuring practice); either mandatory or professional
- Jurisdiction guides (RICS Valuation - Global Standards 2017); supports adoption and implementation of professional statement / guidance note
64
Why does RICS publish guidance notes and do Chartered Surveyors have to follow them?
- Give advice to surveyors on best practice for completing certain activities in profession
- Not mandatory, but more difficult to backup in court or with professional negligence claim
65
What is the 'Black Book'?
Suite of guidance notes defining good technical standards for QS' and construction professionals
66
What are some professional statements issued by the RICS?
- Countering Money Laundering, Bribery, Corruption and Terrorist Financing
- Conflicts of Interest
- Client Money
- RICS Property Measurement
67
Are you familiar with any regulation with the use of the RICS logo by regulated firms and chartered professionals?
- Rules for use of RICS logos and designations
- Guidelines for personal use of RICS logo and designations by RICS professionals
68
Why must you act within your professional competence?
- Ensure I don't advise my clients incorrectly, or this could lead to a complaint / negligence claim
69
Your sibling / close friend is a chartered surveyor. You find out they're working outside the RICS Rules of Conduct. What do you do?
- Verify facts with them
- Remind them of duties as member of RICS
- Inform RICS, specify my relation and any corrective action they are committed to put in place
70
In the case of a breach of a rule of conduct what is the procedure?
Depends on the shortcoming as to whether there will be a proceeding
Step 1 - Formal Investigation by Head of Regulation of the RICS
Step 2 - RICS requests information, investigates compliance
Members must cooperate fully with all enquiries
71
How can a disciplinary proceeding be triggered?
- Complaint to the RICS
- Allegation by client or third party
- Information received or established by RICS
72
What actions can be imposed after the end of the investigation stage?
- Fixed penalty
- Regulatory compliance order
- Regulatory tribunal (inc disciplinary panel)
73
What sort of breaches would expulsion be suitable for?
- Gross, persistent or willful failure to comply with RICS Rules of Conduct
i.e. fraud, dishonesty, conviction of serious criminal offence, gross incompetence, deliberate discrimination, misappropriation of a client's money
74
What is meant by the term negligence?
- Failure to provide duty of care owed to a client (this is owed to all clients and third parties using reasonable skill and care)
- If breach due to negligence, PI claim may arise / damages required to be paid
75
What are the potential consequences of accepting a late tender?
- Could affect client reputation
- Can be difficult to disprove collusion
- Undermines tender process - could give other tenderers cause to challenge
76
Can you give an example of an RICS guidance note you have used recently?
- i.e. Management of Risk, managed throughout project and varies on various factors from the client
77
What did you see when you opened up the guidance note (you used recently)?
- Title
- Acknowledgements
- Contents
- General Principles
- Practical Application
- Practical Considerations
78
What do you know about the RICS document status section?
Outlines type of document, whether it's mandatory, recommended best practice or if the purpose is to inform
79
What does CPD stand for?
Continuing professional development
80
What are the CPD requirements for Chartered Surveyors?
- Must undertake lifelong learning
- 20+ hours each year, 10nr min formal hours
- Must maintain relevant and current understanding of current RICS ethical standards in 3-year rolling period (counts as formal CPD)
- Record CPD activity online by 31st January
81
How is CPD recorded once a surveyor is qualified?
- RICS website
- App
82
How do you define between formal and informal CPD?
- Refer to CPD decision tree
- Formal = structured learning with clear learning objectives and outcomes
- Informal = self-managed learning relevant to professional role
83
What sort of professional development have you undertaken during your training period?
- Training courses
- Seminars
- Private study
- In-house training
- Lectures
- Mock final assessment interviews
84
How will you go about selecting CPD subjects over the next 12 months?
Consider:
- Weak and limited areas of my knowledge
- Future projects and/or project requirements
- Relevant hot topics
Target my CPD to develop in these areas
85
How do you keep up to date with topical issues?
- Regularly review RICS website and journals
- Register to mailing lists with CPD providers
- Discussions with colleagues
- Read construction-related news
- RICS podcast
86
What tools are available to determine whether CPD is formal or informal?
- CPD decision tree
- Annex A on the website (checklist)
87
What types of articles do you read?
- RICS journals (Modus, Construction Journal)
- RICS website
- Building Magazine
- Construction News
88
What recent article have you read from the RICS?
89
What is your CPD strategy?
- Discuss CPD with managers (i.e. at appraisals)
- Check in with them throughout the year if there is potential to go on training courses for upcoming projects where refresher / preparation on expertise required
90
What happens if you do not complete your CPD hours?
- Get given opportunity to log them
- Warning / caution of failure to complete (2nd time)
- If unemployed, may not be able to attend formal CPD but would still be expected to complete informal and confirm reasoning
- Failure to meet obligations a 3rd time can result in referral to Disciplinary Panel
- Potential warning, name on website, fine, de-register
91
What are the regulations set by the RICS?
1. Definitions
2. Memberships and registration
3. Designations
4. Contribution to funds
5. Conduct
6. Governing council, officers and staff
7. Subordinate boards, committees and groups
8. Procedure for general meetings and voting
9. Accounts and audit
10. General
(same sections in bye-laws)
92
What are RICS bye-laws?
- Last updated February 2020
- Laws set by governing council, forming basis for regulations and Rules of Conduct
- Changes must be approved by governing council
93
What procedures must you follow to start up a new RICS-regulated practice?
- Contact RICS for guidance
- Obtain company start up pack
- Inform RICS and register for regulation
- Appoint contact officer for all RICS communication
- Prepare complaints handling procedure
- Obtain PII cover
- Abide by Rules of Conduct for Firms
- Use designation 'Regulated by RICS' on all practice material
94
What do you mean by use of designation?
RICS has a document for the logo format that can be used
95
Would you advertise your new company in the press?
Yes, as long as it's in a trustful, responsible manner in line with the Rules of Conduct for Firms
96
What insurances would you need if you were starting up your own firm?
- Professional Indemnity
- Employer's Liability
- Public Liability
- Building insurance of office premises
97
What sort of information do registered firms have to send to the RICS annually?
Annual return carried out online (otherwise fixed penalty) and log book
- Includes type of business and staffing, nature of clients, training provision, complaints handling procedure and records, PII, whether the firm handles clients' money
98
What are the benefits of your firm being regulated by the RICS?
- Client assurance of minimum standard of service
- Protects firm and clients
- Can encourage repeat business
- Access to professional standards and guidance
- Demonstrate operation with gold standard
- Access to global network of surveyors
99
Are you aware of any rules associated with registering a Firm with the RICS?
Rules for registration of firms (ver. 8 effective 2/2/22)
100
When is a firm required for regulation?
a) Firm provides surveying services to public
b) Firm operating in Regulated Area A (UK)
c) 50%+ of firm's principles are RICS members
101
In which circumstances are firms eligible to register for regulation?
Rule 4.1, eligible if:
a) Firm provides surveying services to public
b) 25%+ of firm's principals RICS members
Rule 4.2 - eligible if meeting 4.1(a) and either:
a) Head of Regulation satisfied the Firm is implementing appropriate plan to secure compliance with 4.1(b) within a reasonable period
b) Head of Regulation satisfied firm is appropriately supported and supervised by another RICS-registered firm(s) that fulfil requirements
102
Do the directors of your firm need to be chartered for it to be a regulated firm?
- 25% must be chartered to be eligible
- 50%+ means compulsory to be regulated
103
What is a locum?
- Firm with a sole principal must have arrangements if they are unable to work
- Another professional appointed to stand in for surveyor if they are unable to work
104
Who can be a locum?
- Another Chartered Surveyor
- A 'trustworthy professional' i.e. solicitor / accountant
105
How does PII cover relate to locums?
- Need to be covered for any work undertaken whilst sole practitioner unavailable
- Could be in their own cover / appropriate under Firm's PII policy
106
What is professional indemnity insurance?
- Covers against claims of negligence, error or omission in professional advice / services
- Protects client should any advice given lead to loss / damage
107
Why is PII important to the profession and who does it protect?
Covers against damages and loss suffered by a client due to negligent actions
108
What benefits does PII provide for the professional?
- Protection from financial losses
- No need to meet claim from own assets and resources
109
What benefit does PII provide for the client?
Recover financial losses
110
What is the difference between 'any one claim' and 'aggregate policies'?
- Any one claim - cover up to the full limit for each claim made
- Aggregate - cover up to the full limit for all claims
111
On what basis is PII underwritten in the UK?
Claims-made basis - Insurance policy in place at time of discovering breach is responsible for providing indemnity, not insurance policy when breach was made
112
What is a fully retroactive PII policy?
- Covers claim made in insurance period, regardless of when negligent act occurred
- If retroactive date of policy dated as 'none', policy is fully retroactive and all former work is covered
113
What measures do you take to avoid professional insurance claims?
- Full and detailed records of meetings, conversations
- Record recommendations and advice given
- Use proper letters of engagement and appointment contracts
- Avoid advising outside my field of expertise / knowledge
- Follow RICS guidance and professional statements
- Avoid excessive workloads and poor management
- Follow RICS Rules of Conduct
- Follow company procedures and policy
114
Do you know any case law on PII?
Merrett vs Babb (2001)
- Merrett purchasing house, Babb completed valuation as an employee of a company
- Valuation later found to be negligent
- Original company no longer existed, PI policy cancelled
- Court ruled Merrett could pursue individual (Babb) for losses
115
What are the minimum limits of indemnity for regulated firms?
- Turnover <£100k -> min limit £250k
- Turnover £100k-£200k -> min limit £500k
- Turnover £200,001+ -> min limit £1m
116
What is uninsured excess?
Amount of excess of claim to be paid before indemnity granted
117
What is the maximum level of uninsured excess for regulated firms?
- Turnover greater of 2.5% insured sum or £10k
- Turnover +£10m -> no limit set
118
What happens if you're starting a new company and you don't have records of turnover?
- Cover based on anticipated turnover and cashflow
- If exceeding anticipated turnover, must notify policy holders
119
If you make a mistake, what would your insurance company expect you to do next?
- Notify at earliest opportunity
- Comply with conditions and procedures set out in policy
- Advise client of error
- Assess level of mistake, take steps for correcting
120
Assuming you are MRICS, a friend asks for your help on a private house extension. What would you do if they asked for free technical advice outside business hours?
- My firm's PII doesn't cover private advice
- I would politely decline
- Need to consider potential Conflict of Interest
- Suggest friend contacts my firm in business hours and sets up formal appointment or refer to RICS find a surveyor
121
What cover do you need if you retire / cease to trade?
Run off cover
122
What is professional indemnity insurance run-off cover?
Form of PII covering historic liabilities of business after it ceases to trade (covers legacy issues)
123
How long should run-off cover be in place?
Min 6 years from cessation of practice
124
What would happen if you couldn't obtain run-off cover?
- Refer to assigned risk pool - entries considered if all other options considered.
- Firms can stay in pool for 3 years and are audited
125
What limitation periods are associated with underhand and deed forms of contract?
Underhand - 6 years
Deed - 12 years
126
How long do you need to maintain PII for?
- Depends on type of contract execution
- Signed on deed - 12 years
- Signed underhand - 6 years
[RICS recommends 15 years due to Latent Damages Act, which can be brought about 3 years from claim occurring]
127
What are the requirements regarding PII set by the RICS?
- Policy on 'each and every claim' basis
- RICS sets out min levels of indemnity and max levels of uninsured excess
- Run off cover in place at least 6 years
- Policy to include cover for past and present employees, directors and partners
- Purchased/underwritten through RICS-approved broker
- Max level of liability
- Min level of indemnity
- Retroactive
128
If an estimate prepared by a QS is incorrect can the client claim damages?
- Incorrect estimate alone doesn't provide client right of redress- may be incorrect due to reasons outside their control (i.e. excluded items / market conditions)
- Client must demonstrate that QS warranted accuracy of estimate and that it was incorrect due to lack of reasonable skill and care
129
How can you limit your liability when agreeing terms of appointment with a client?
- Base appointment on reasonable skill and care rather than fitness for purpose (more onerous)
- If client's requirements are performance-based, may imply fitness for purpose. Advisable to request clause limiting appointment to reasonable skill and care only
- Run off cover must be in place
- Execution of appointment under hand (6 years) results in reduced liability period
130
What insurance do you need if you're going to be regulated by the RICS?
- PII
- Cover against 'death/incapacity' of sole practitioner
- Public liability
- Buildings insurance
- Employer liability
- Contents insurance
- Business interruption insurance
131
What is a minimum level of indemnity?
Minimum level of cover that must be provided
132
If you took out a PII policy, what would you expect to see?
- Name of business
- Type of business operations
- Level of excess
- Length of cover
- Types of claims covered
- Who it's signed by
133
What guidance does the RICS publish on PII?
- Risk liability and insurance April 2021
- Professional Indemnity Insurance (professional statement)
134
What is a limit of liability?
Insurers have limit of cover for each and every claims basis
135
What is a full civil liability basis?
If you're found liable for compensation, damages or costs in a civil court because of your advice or professional services, you're covered – even if you can't see that you are
136
What is round the clock reinstatement?
- Claim can be brought in between 6-12 years and you can change several policy holders within period
- Requires each layer of insurance to step down as its underlying policy is exhausted.
137
What is typically the premium of PII?
% of turnover, say 1-5%
138
What is PII based on?
- Business size
- Numbers of past claims
- Sectors / projects
- Client records of making claims
- Number of partners
- Experience
- Whether staff are chartered
139
What are the PII wording changes from RICS?
2023:
- No material changes to amendments - no impact on breadth of cover available to UK firms
- Approved list of insurers updated
- RICS working to get more comprehensive fire safety cover
140
What process do regulated firms need to be put in place when handling clients' money?
- Set clear segregation of duties for employees
- Principal oversees client money accounting functions
- Principals cannot override controls
- Competent and knowledgeable staff to process clients' money
- Secure accounting and data systems
- Client money separate and clearly identifiable (described with 'client' in name)
- Clients can always have access to funds
- Must engage terms and advise client bank details in writing
- Account must not be overdrawn
- Maintain client ledges, provide running balance
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What are different types of client money accounts?
- General accounts - hold money for >1 client
- Discrete accounts - for individual clients
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What RICS system is in place to protect client money?
Client money protection scheme
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What is the Client Money Protection Scheme
- Operated by RICS
- Contains provision for any member of the public to be reimbursed their direct loss of funds when using RICS-regulated firm
- Provided through RICS insurance policy
- Last resort for RICS-regulated firms
- £50k limit per claim
- Cap on scheme overall each year: £10.3m
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What is the purpose of the joint names policy on a client money account?
Dual authorisation
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What is the RICS guidance for handling client money?
- Client Money Handling Professional Statement
- Provides rules for members and firms to have appropriate controls and procedures to keep client money safe
- Provides confidence to clients and consumers that firm is operating to high professional standards
[Sections:
- Handling clients' money
- Information to clients
- Receipts of client money
- Payments from client account
- Accounting records and control
- Compliance]
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What are some considerations when handling clients' money?
Consider Rules of Conduct 1 example behaviours to ensure responsible handling of finances
- Best practice - ask for BACS / direct debit
- Onus then on bank to determine where money has come from
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Can you accept a gift from your client or contractor?
- Depends on various factors (timing, proportionality, consideration of perceived impartiality if received, who else is receiving gift, is it in line with Rules of Conduct)
- Consult Ethics Decision Tree to make informed decision
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What is the RICS guidance on accepting gifts?
- Do not accept if likely to compromise integrity / impartiality
- Hospitality / promotional / other business expenditure seeking to genuinely promote and improve image of firm is acceptable and key part of doing business
149
You are attending a Main Contractor organised business conference where it is announced you have been randomly selected as the winner of this month's prize draw (iPad air). How would you react?
- Uncomfortable accepting prize - significant value and could be seen as bribe / affecting impartiality
- If working with Main Contractor on a project, timing could be highly inappropriate
- Respectfully decline prize, suggest charitable donation of Main Contractor's choice
- Bribes often distributed as 'random' prizes - due to seriousness I would report to my line manager
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You have been invited to attend a show with members of your project team, but they dropped out last minute due to illness. Would you still attend?
- In first instance, declare hospitality on companies' gift and hospitality register and make sure the event is approved
- If approved, I would need to decline invite due to Project Team dropping out- as they're not present it's no longer a genuine business event
- Consequently, I would decline hospitality at Project Team's expense
151
A contractor invites you to lunch at a Michelin star restaurant, saying they are keen to discuss details of a tender they are about to submit for a project you are working on. How would you respond?
- Consider proportionality and timing - definitely an improper influence / bribe
- Decline and explain the invitation is inappropriate
- If they are persistent this could be a red flag they want to discuss things they can't put in writing - I may have to report infringement
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What is a conflict of interest?
Situation with potential / perceived / actual risk that professional judgement will be compromised when undertaking an assignment
i.e. existing relationship with contractor can result in reduced impartiality. I need to make clients aware and potentially decline work opportunities
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Has RICS published any information on conflicts of interest?
Conflicts of Interest, 1st edition, March 2017, professional statement
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Can you name 3 types of conflict in the Conflicts of Interest professional statement?
- Party conflict
- Own interest conflict
- Confidential information conflict
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Can you provide an example of a potential Conflict of Interest?
- Acting for both developer and contract
- Having other obligations / pressures detracting or affecting relationship with client
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What is Informed Consent?
- If a party may be adversely affected by a Conflict of Interest, this acknowledges existence of risk, but still agrees they wish to proceed with assignment of regulated member
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What action would you take if a potential conflict of interest arises?
- As soon as I'm aware, disclose to client in writing and detail nature of the conflict
- Only continue working for them if they provide Informed Consent
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You're instructed to work on a proposed development which would require the removal of a nature reserve. You have strong views on protecting the environment. What should you do?
- Ask self if I could work on project without bias / conflict of interest
- Notify client of potential conflict of interest
- May need to respectfully decline commission / offer to someone else in organisation who could work without bias
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If your client was insistent you worked for them despite an existing conflict of interest, how would you proceed?
- Ensure they fully understand the context and potential for reduced impartiality
- If they're still insistent, seek Informed Consent, and I would agree to working procedures to manage conflict with client and teams involved
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How could a conflict of interest be managed internally if 2 separate departments were working for the same client?
- Procedures to ensure exclusivity of staff, information barrier to avoid crossover of information
- Separate communication lines, offices, data storage
- Staff could sign NDAs
- Monitor potential conflict and keep client updated on conflict
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What is a bribe?
Giving / receiving some kind of advantage in connection with improper performance in a position of trust
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What is the Bribery Act 2010? (and its main principles of bribery offences)
Covers criminal law relating to bribery
4 principles of bribery offences:
1. Bribing another person
2. Being bribed
3. Bribing a foreign public official
4. Commercial organisation failing to prevent bribery
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6 principles of the Bribery Act?
- Proportionality
- Top level commitment
- Risk assessment
- Due diligence
- Communication
- Monitoring and review
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Who does the Bribery Act 2010 apply to?
- Individuals: British citizen / British associate in connection with UK
- Organisations: incorporated in UK / partnership that has carried out business in the UK
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What is your position for compliance with the Bribery Act?
- I follow my company procedures, including its anti-bribery and corruption policy
- I would report any act of bribery to the National Crime Agency / Serious Fraud Office
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What are the potential consequences for not adhering to the Bribery Act?
- Individuals - max penalty 10 years imprisonment and/or unlimited fines
- Corporations face unlimited fine
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What is money laundering?
Criminally disguising and controlling proceeds of criminal conduct by making it appear they have come from a legitimate source
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How do you report suspicious money laundering behaviour?
- Raise with a company director
- Submit Suspicious Activity Report (SAR) to the National Crime Agency
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A client asks you to take responsibility for making interim payments to the Contractor. The client gives £500,000 cash to make the payments. What would you do in this situation?
- I would not accept cash - encourage them to take cash into a bank account (then it's the bank's responsibility to check legitimacy of cash)
- If I had concerns about the source I would report it to the National Crime Agency
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What is corruption?
Abuse of entrusted power for private gain
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What is a price fixing cartel?
Collection of otherwise independent businesses / countries acting as if they were a single producer and thus fixing prices for goods without competition
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What is terrorist financing?
Solicitation of funds with intention to support terrorist acts or organisations
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What is a facilitation payment?
Payment made to a public / government official acting as incentive to complete an action / process expeditiously to the benefit of the party making the payment
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Under the Bribery Act, under what circumstance is a facilitation payment permitted?
- Only when under duress (i.e. real and present risk or danger to life, limb or liberty)
- Must put my own safety first, make the payment and report matter as soon as practicable to manager / ethics compliance contact
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What RICS guidance is relevant?
Countering bribery and corruption, money and terrorist financing professional statement (1st edition February 2019)
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What does the countering bribery, money and terrorist professional statement say about gifts and hospitality?
- Firms must have written policy on bribery and corruption
- Encourage transparency within organisation (implement register)
- Members to declare gifts and hospitality to employer
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How would you make sure your staff know their obligations around bribery?
- Request they sign agreement confirming they have read and will conform with information set in Bribery Act 2010 and company policies
- CPD / training
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Can you give me an example of a bribe under the Act?
Accepting high value / cash gifts
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What must RICS regulated firms do in relation to bribery?
- Provide training and CPD to firms
- Written policy covering bribery and corruption
- Monitor and review regulations
- Continuously update policy
- Top level commitment
- Communication
- Risk assessments
- Gift register
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What are the subjects RICS investigates against a member or regulated firm?
- Failure to use complaints handling procedure
- Incompetence
- Conflicts of interest
- Misuse of client's money
- Failure to answer correspondence
- Allegation / criminal offence
- Breaking rules of conduct
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On what grounds can a member be expelled from the RICS?
- Failure to pay fees
- Failure to have insufficient PII
- Failure to undertake CPD
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Is there anything the RICS cannot do in terms of disciplinary procedures?
- Deal with complaints / concerns of non-members or those not affiliated with the RICS
- Pay compensation / instruct a member to deal with matters not affiliated with the RICS
- Determine whether a firm has acted negligently (court decides)
- Be involved in court action against a member
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Who deals with discipline issues in the RICS?
Standards and Regulation Board and Regulatory Tribunal
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Why do the RICS take disciplinary action?
- Protect public interest
- Safeguard reputation of profession
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How do the RICS investigate?
- Only for regulated members and firms
- Concerns reported via RICS website
- Regulated members have professional duty to promptly disclose details
- Duty to speak up is an important part of the profession's moral compass
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What can't the RICS enforce?
- Legal matters
- Non-regulated members and firms
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Who can the RICS discipline?
Regulated Member (RICS professional / regulated firm)
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What disciplinary options are available?
- Fixed penalties
- CPD sanctions
- Regulatory compliance orders
- Disciplinary and regulatory decisions (cautions, expulsions, deregistration)
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What happens in less serious cases?
- Regulatory Compliance Order
- If member doesn't admit allegation, can be referred to Regulatory Tribunal to decide whether to impose disciplinary outcome
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What happens in more serious cases?
May be necessary to refer case to Disciplinary Panel, drawn from independent Regulatory Tribunal
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Who makes the rules for the discipline?
- Bye-Laws awarded by Privy Council
- Royal Charter allows Standards and Regulation Board to make rules about use of disciplinary powers (Regulatory Tribunal Rules). These set out RICS processes, decisions they can take and regulatory actions available
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What are fixed penalties?
- Admin fee, fine and/or caution
- Must be paid by specified date otherwise it may remain on Regulated Member's record for defined period (i.e. 10 years for failing to record CPD)
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What are regulatory compliance orders?
- Agreement between RICS and Regulated Member that they are liable for disciplinary action (admits shortcoming and agrees to appropriate sanction)
- Could be given conditions for their continued membership and potential fine up to £2,000 per breach
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What is modern slavery? (give some examples)
- Illegal exploitation of people for personal / commercial gain
- Includes forced labour, child slavery, sexual exploitation, forced marriage, human trafficking, debt bondage (paying monies they cannot pay back)
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What is the relevant legislation for modern slavery?
Modern Slavery Act 2015
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How would you report modern slavery?
Call the police or modern slavery helpline
