Ethics Flashcards
(66 cards)
A contractor invites you to lunch to a restaurant and advises
they’ve got two Michelin stars and a wine list second to none.
They say they are keen to discuss the details of their tender
they are about to submit for the project you are working on.
How would you respond?
- Going to what sounds like a lavish lunch paid for by a bidder in the middle of a tender process is
against Company policy and could be an offence under the UK Bribery Act. - If this were the first time, it would be OK just to decline and explain that such an invitation is
inappropriate. - However if this supplier is persistent, there is a red flag in that he wants to discuss things that he cannot
put in writing, so we should report this infringement
You receive an invite to attend the Theatre with some
members of your Project Team but they dropped out due to
illness at the last minute, would you still attend?
- In the first instance I would declare this hospitality on my companies’ gifts and hospitality register.
- Assuming the invite was approved and I was authorised to attend, I would need to decline the invite
due to the Project Team dropping out. - Since they won’t be present, this will not be a genuine business event.
- Consequently, I would decline this hospitality at the Project Team’s expense
You are attending a Main Contractor organised business
conference where it is announced the you have been randomly
selected as the winner of this months prize draw. Its an i-pad
air. How would you act in this scenario?
I would be extremely uncomfortable accepting the prize in this scenario.
* The prize is of a significant value and could be interpreted as a bribe.
* Furthermore due to working on a project with the Main Contractor at the time of this scenario,
accepting the prize would have been highly inappropriate and could be interpreted as having an affect
on my business conduct during the project.
* I would respectfully decline the prize and suggest that this is made as a charitable donation to a charity
of the Main Contractor’s choice.
* I am aware that bribes are commonly distributed as random prizes and due to the seriousness of this
incident I would report this to my line manager
Under the Bribery Act, under what circumstance is a
facilitation payment permitted?
- The only circumstance in which it is OK to make a facilitation payment is when you are under duress.
- For example if there is a real and present risk or danger to “life, limb or liberty”.
- If you or your companions are under immediate physical threat.
- You should put safety first, make the payment and report the matter immediately.
- Or as soon as is practicable to your manager or your ethics compliance contact
What are the Main Principles of the Bribery Act?
The offences are:-
o Making a bribe.
o Receiving a bribe.
o Bribery of a foreign public official.
o Failure of a corporate entity to prevent bribery on its behalf.
- The legislation applies to all UK Entities and includes associated Persons for example sub-consultants
and external advisors. - There are six principles of prevention companies should put in place:-
o 1. Proportionate Procedures.
o 2. Top Level Commitment.
o 3. Risk Assessments.
o 4. Due Diligence.
o 5. Communication.
o 6. Monitoring & Review
If the client was insistent that you worked for them despite an
existing conflict of interest, how would you proceed?
- I would check the clients understanding around the conflict of interest.
- I would then make the client aware of the potential for reduced impartiality.
- If they were still insistent on the appointment, I would seek a letter of instruction from the client to
continue. - Following the appointment I would agree working procedures to manage the conflict of interest with
the client and the teams involved
How could the conflict of interest be managed internally if two
separate departments were working for the same client?
- I could put in place procedures to ensure exclusivity of staff.
- This would avoid any cross over of information between the departments.
- I would also ensure that there are separate communication lines into the client.
- Separate geographical locations and secure office and data storage would also need to be provided.
- Staff could also sign up to confidentiality or non-disclosure agreements.
- I would also need to monitor the potential conflict and keep the client updated on progress
Tell me what you understand about conflicts of interest?
A conflict of interest is where someone in a position of trust has competing personal or professional
interests making it difficult for them to fulfil their duties impartially.
* An existing relationship will result in reduced impartiality and Chartered Surveyors have an obligation
to make clients aware of this and if necessary, decline work opportunities where a conflict of interest
occurs
If the client gives you a lump sum fee before going on holiday,
what would you do?
I would place the funds in a separately identified client account and agree a drawdown of monies
against the services being provided with the client
Once you and your client agreed the services that are to be
provided verbally what would you do next?
Follow up with a formal letter which includes the terms and conditions, fees and scope of services that
are to be provided
If you put together a fee proposal, but a couple of months into
the job you realise that you have under forecasted your
resources, would you go back to the client and ask for more
money?
If project requirements such as the services, scope or value of the project has increased then I would go
back to client and request a fee increase.
* If the scope of works had remained the same, this highlights a mistake within our fee bid and the
additional work would need to be carried out without reducing the level of service being offered and
without requesting additional fees from the client
What are the main elements included within a fee proposal?
Terms and conditions.
* Scope of services.
* Exclusions.
* Assumptions
How can you limit your liability when agreeing terms of
appointment with a client?
Base the appointment on reasonable care and skill rather than fitness for purpose which is more
onerous.
* If the client’s requirements are performance based, this may imply fitness for purpose. It is advisable to
request a clause limiting the appointment to reasonable skill and care only.
* Run off cover must be in place.
* Execution of the appointment under hand will result in a reduced liability period of 6 years instead of
12
If an estimate prepared by a QS is incorrect can the client
claim damages?
- An estimate that is incorrect in itself will not provide the client with a right of redress.
- The client must demonstrate that the QS warranted the accuracy of the estimate or that it was incorrect
due to a lack of reasonable skill and care. - It could have been incorrect due to reasons outside their control for example market conditions or an
item referred to in their exclusions.
If you made a mistake in your cost plan what would your
insurance company expect?
For you to notify them and comply with any conditions & procedures set out in the insurance policy
What measures should be taken to try and avoid PI claims?
- Keep full and detailed records of meetings and conversations.
- Record recommendations and advice given.
- Use proper letters of engagement, scope of services and terms of engagement.
- Don’t advise on a specialism outside your field of experience.
- Use RICS guidelines.
- Avoid poor management and excessive workloads.
What are the new RICS minimum levels of indemnity and
Maximum levels of uninsured excess?
£100,000 or less = min £250,000
£100,001 - £200,000 = min £500,000
£200,001 or above = min £1 million
£10 mill or less = The greater of 2.5% of the sum insured or £10,000
£10,000,001 or above = No limit set
What are the requirements regarding Professional Indemnity
Insurance set by the RICS?
- The policy cover must be made on an ‘each and every’ claim basis.
- The RICS sets out the minimum levels of indemnity.
- The RICS sets out the maximum levels of uninsured excess.
- Run off cover must be in place for at least 6 years.
- The policy should include cover for past and present employees, directors and partners
What does PII stand for?
Professional Indemnity Insurance.
What is the purpose of Professional Indemnity Insurance?
To provide financial cover in the event a client suffers financial loss as a result of a breach of
professional duty e.g. neglect, errors or omissions
What benefits does it provide for the professional?
- The professional is protected from financial losses.
- The firm does not have to meet the claim from their own assets and resources
What benefits does it provide for the client?
They are able to recover their financial losses
On what basis is it underwritten in the UK?
On a claims made basis
What does this mean?
The insurance policy that is in place at the time the breach is discovered is responsible for providing the
indemnity, not the insurance policy in place when the breach was made
