04 Ethics

Question 1

How would you define ethical behaviour for a chartered surveyor?

Answer 1

Acting in accordance with the 5 RICS professional and ethical standards

Question 2

Why are the ethical standards important?

Answer 2

Create a clear and streamlined guide to members to ensure that clients and anyone else who deals with the RICS has confidence in the profession

Question 3

Name the RICS professional and ethical standards.

Answer 3

1. Act with integrity
2. Always provide a high standard of service
3. Act in a way that promotes trust in the profession
4. Treat others with respect
5. Take responsibility

Question 4

What is meant by ‘act with integrity’?

Answer 4

• Being honest and trustworthy in all that I do
• Transparent, respecting confidential information, not taking advantage of anyone, not allowing bias or pressures affect my judgement or obligations, not accepting gifts or hospitality that might suggest an improper obligation, acting in the interest of the public

Question 5

What is meant by ‘provide a high level of service’?

Answer 5

• Ensuring the best possible advice, support or performance is given to my clients
• Be clear about the service being provided, act within my scope of competence, transparent about fees and any other costs or payments, communicate with clients in a way that allows them to make informed decisions

Question 6

What is meant by ‘promote trust within the profession’?

Answer 6

• Act in a manner, both in professional and private life, that promotes me and my firm in a positive way
• Promote the highest standards globally, amending behaviour to suit others, fulfil obligations

Question 7

What is meant by ‘treat others with respect’?

Answer 7

• Be courteous, polite and consider cultural sensitivities and business practices
• Never discriminate, encourage the fair and respectful treatment of clients

Question 8

What is meant by ‘take responsibility’?

Answer 8

• Be accountable for my actions and don’t blame others if things go wrong
• Always act with skill, care and diligence, respond to complaints in the appropriate professional manner, prepare to question things that don’t seem right

Question 9

Give some examples of how you reflect the RICS ethical standards in your work.

Answer 9

1. Integrity - turning down an invitation from a contractor whilst settling the final account
2. High standard of service - referring clients to specialists when scope is outside competence
3. Trust - rejecting the early certification of work
4. Respect - working with people from different backgrounds equally
5. Responsibility - questioning unsafe working on site

Question 10

What is the RICS Decision Tree?

Answer 10

Flowchart to help members decide how to act in difficult situations where their professional ethics may be at stake

Question 11

What factors does the RICS Decision Tree consider?

Answer 11

1. Sufficient facts
2. Legality
3. Ethical standards
4. Consultation of appropriate people
5. Clear reasoning
6. Impact if actions made public

Question 12

What is a conflict of interest?

Answer 12

Anything that impedes or might be perceived to impede an individual’s or firm’s ability to act impartially and in the best interest of a client

Question 13

Give some examples of where conflicts of interest may arise.

Answer 13

1. Acting for two different parties with competing interests at the same time
2. Financial interests (e.g. gaining over and above your normal fee)
3. Personal relationship
4. Commercial relationship
5. Interests of your firm conflict with that of your client

Question 14

What should a surveyor do if a conflict of interest arises?

Answer 14

1. Should be dealt with by implementing openness and transparency
2. Declare any conflicts of interest clearly to all parties ASAP and offer to stand down from acting for any party
3. All parties can then decide how they wish to proceed and if there are any objections you must stand down

Question 15

Describe a conflict of interest you have experienced and how it was resolved.

Answer 15

• Refused to accept certain gifts/hospitality from a contractor whilst settling the final account due to timing and how this may be seen as affecting impartiality
• Resolved by referring to the RICS Professional and Ethical Standards Decision Tree to aid my decision to refuse

Question 16

What is a ‘Chinese Wall’?

Answer 16

An information barrier within an organisation used in order to prevent exchanges or communication that could lead to a conflict of interest

Question 17

Can one part of a chartered surveying practice work for a client, whilst another part of the practice is working for a different client who has conflicting interests to the first?

Answer 17

• Yes, providing a Chinese wall is effectively implemented
• Teams should be physically separated in different parts of the building (or in different buildings)
• Requires a compliance officer to monitor the ‘wall’ - education and training must be made available to those managing the wall

Question 18

You’re acting on behalf of a client in a dilapidations claim and realise you know the other party personally - what should you do?

Answer 18

• Declare any conflicts of interest clearly to all parties ASAP and offer to stand down from acting for any party
• All parties can then decide how they wish to proceed and if there are any objections you must stand down

Question 19

Your neighbour asks you for help in designing a loft conversion - what would you do?

Answer 19

1. No terms and conditions
2. No PII
3. Potential conflict of interest
4. Follow the RICS Decision Tree
5. Say no and offer to set up a formal meeting with a director of my firm
6. Alternatively, refer them to the RICS ‘Find a Surveyor’ service

Question 20

What is a bribe?

Answer 20

• The exchange of something of value in return for someone doing or agreeing to do something improper in a business context
• Bribery also covers the offer or request for a bribe, even if it is not completed

Question 21

What legislation exists in relation to bribery in the UK?

Answer 21

Bribery Act 2010

Question 22

What is the purpose of the current UK legislation on bribery?

Answer 22

Criminalises bribery in the UK, making it a criminal offence to directly or indirectly:

• Offer, promise or give a bribe
• Request, agree to receive or accept a bribe

Question 23

What legislation has the current bribery legislation repealed?

Answer 23

1. Public Bodies Corrupt Practices Act 1889
2. Prevention of Corruption Act 1906
3. Prevention of Corruption Act 1916

Question 24

What are the penalties under the current bribery legislation?

Answer 24

A maximum 10 years’ imprisonment and/or an unlimited fine

Question 25

Who does the current bribery legislation affect?

Answer 25

Near-universal jurisdiction, allowing for prosecution of UK individuals or companies doing business overseas, as well as overseas individuals or companies doing business in the UK

Question 26

What standard are judgements under the current bribery legislation based upon?

Answer 26

Judgments are decided based on the 'reasonable person' test

Question 27

What are facilitation payments and what is their legal status?

Answer 27

* Also known as 'grease' or 'speed' payments * Unofficial payments made to public officials in order to secure or expedite the performance of a routine government action * Illegal under the Bribery Act 2010

Question 28

How can bribes affect surveyors?

Answer 28

Can be vulnerable to bribes because of the role they play in facilitating transactions, checking owners/contractors are complying with legislation and awarding construction contracts

Question 29

Would the offer or acceptance of gifts or hospitality amount to a bribe?

Answer 29

* Could amount to a bribe if they are intended to induce someone to behave in a manner that breaches an expectation that they will act in good faith and impartially * However, bona fide hospitality and promotion intended to improve the image of an organisation, better present products and services or establish cordial relations is seen as an established and important part of doing business and is not criminalised under the Act

Question 30

What considerations should RICS members have in relation to offering or accepting gifts and hospitality?

Answer 30

RICS members should follow these rules: 1. Only offer or accept gifts and hospitality that are customary, proportionate and reasonable in terms of value and frequency 2. Never offer or accept any gift or hospitality if it may improperly influence your decisions/judgement or give the appearance of doing so (e.g. consider the timing of the gift) 3. Only offer or accept gifts and hospitality that you would be happy for others to know about 4. Follow the policies and procedures of your employer in relation to gifts, hospitality and promotional expenditure - e.g. record in company's gifts and hospitality register 5. Report any concerns about bribery to your employer or to RICS Regulation

Question 31

What procedures should RICS corporate members follow in relation to preventing bribery?

Answer 31

RICS corporate members should follow the 6 principles in preventing bribery practices: 1. Proportionate procedures - procedures should be proportionate to the bribery risks the company faces 2. Top level commitment - zero tolerance to bribery 3. Risk assessment - the company should periodically assess the internal and external risks of bribery 4. Due diligence - systematically investigate employees and business partners (the level of which should be informed by the risk assessment) 5. Communication (including training) - communicate policies, operate confidential whistle-blowing service, provide training 6. Monitor and review - periodically review procedures and make improvements where necessary

Question 32

What would you do if a contractor offers you a gift such as a scale rule with the contractor's name on it?

Answer 32

Accept it, as it is a bona fide promotion intended to improve the image of an organisation

Question 33

If a contractor wants to buy you lunch on the day of an interim valuation, how would you respond?

Answer 33

Reject the offer, as it may improperly influence your decisions/judgement or give the appearance of doing so

Question 34

A contractor gives you a bottle of champagne at Christmas. Would you accept it?

Answer 34

1. Maybe, however only offer or accept gifts and hospitality that you would be happy for others to know about 2. Question whether the gift is proportionate and reasonable in terms of value and frequency 3. Reject if it may improperly influence your decisions/judgement or give the appearance of doing so

Question 35

A contractor invites you to their Christmas dinner dance - would you go?

Answer 35

1. Maybe, however only offer or accept gifts and hospitality that you would be happy for others to know about 2. Question whether the gift is proportionate and reasonable in terms of value and frequency 3. Reject if it may improperly influence your decisions/judgement or give the appearance of doing so

Question 36

A client invites you to their Christmas dinner dance - would you go?

Answer 36

1. Maybe, however only offer or accept gifts and hospitality that you would be happy for others to know about 2. Question whether the gift is proportionate and reasonable in terms of value and frequency 3. Reject if it may improperly influence your decisions/judgement or give the appearance of doing so

Question 37

If you saw a colleague at the races with a contractor in the VIP area, what would you do?

Answer 37

1. Remind them of the RICS' rules and procedures on accepting gifts/hospitality 2. Report any concerns about bribery to your employer or to RICS Regulation

Question 38

If you saw one of your team send out an interim valuation that over values the works, what do you do?

Answer 38

1. Talk to them initially and point out the error 2. Suggest the error is corrected before issuing 3. Escalate to a director if the error was purposeful 4. Consider reporting through firm's whistleblowing procedure if necessary

Question 39

You have put in a fee bid to a client. They contact you and say that another practice has quoted a lower fee, but they would like you to do the work. They ask you to reduce your fee to match the other practice. What should you do?

Answer 39

1. Avoid price fixing, aggressive fee cutting or collusion with competitors 2. Original fee quote should have been a reasonable reflection of the works required 3. Reducing costs may mean corners are cut and quality is reduced in order to make a profit 4. Client may be expecting the same next time as well and this will not be sustainable

Question 40

If you were self-employed, would you consider adjusting your PII to carry out a piece of work or decline to do the work?

Answer 40

1. Commercial decision based on the opportunity and risk 2. Never proceed without the sufficient level of PII

Question 41

Would you go against the recommendations of a chartered surveyor?

Answer 41

Yes providing there is reason for it (e.g. not acting within the RICS rules of conduct or ethical standards)

Question 42

What would you do if a client says they are not paying for your service?

Answer 42

1. Talk to client to understand why 2. Try and find a resolution 3. Refer back to the contract terms 4. Pursue dispute resolution procedures if necessary

Question 43

Can chartered surveying practices work for a client, but not charge a fee?

Answer 43

1. Commercial decision based on the opportunity and risk (i.e. may be charitable work) 2. Need to question quality of work and incentive if no fee is in place 3. Legal advice required regarding the formation of a contract (i.e. no consideration)