Tell me what you understand about conflicts of interest?
- 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
How could the conflict of interest be managed internally if two separate departments were working for the same client?
- Information barriers
- Barrier must be robust so no chance of information passing between two parties
- Must take ‘reasonable steps’ to operate an effective barrier
- The surveyors acting on two sides must be different and must be physically separated
- All information regarding the instruction stored securely
- Keep a clear audit trail of the conflict check process and all written and oral communication and the firms compliance officer must oversee all actions
If the client was insistent that you worked for them despite an existing conflict of interest, how would you proceed?
- Check the clients understanding around the conflict of interest
- Make them aware of the potential for reduced impartiality
- Seek a letter of instruction from the client to continue
- Talk through working procedures to manage the conflict of interest
- Agree this formally in writing with the client
What are the minimum levels of indemnity? / How do you determine the level of PI cover?
turnover
less than £100 k - 250k
between £100-200k - 500k
over £200k - 1m
What are the maximum levels of uninsured excess?
depends on cover
under 500k - 2.5% of cover or £10k minimum
over 500k - no limit
What sort of Insurances do Chartered Surveyors need to have?
- Professional Indemnity Cover
- Buildings insurance
- Contents Insurance
- Employers Liability Insurance
- Run Off Cover
What must a complaints handling procedure include?
STAGE ONE (IN HOUSE)
* Details of the CHP issued whenever the firm receives a complaint from a valid complainant to whom the firm owes a duty of care
* The procedure must be quick, clear, transparent and impartially implemented
* Details of the nominated person who will investigate the complaint must be stated as the person to be contacted in the first instance
* The complaint must be made in writing
* A complaint should be acknowledged within 7 days and investigated within 28 days
STAGE TWO (ADR – THIRD PARTY RESOLUTION)
* If the complainant is not happy with the review, the second stage of the CHP involves using an independent redress scheme which the firm has chosen to use
* The name of the relevant appropriate redress mechanism must be provided to the claimant
What are the Main Principles
of the Bribery Act?
Offences:
1. Bribing
2. Receiving a bribe
3. Bribing a foreign public official; and
4. Failing to prevent bribery
Six Principles of Prevention:
1. Proportionate Procedures
2. Top Level Commitment.
3. Risk Assessments.
4. Due Diligence.
5. Communication.
6. Monitoring & Review.
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:
* ie 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/Legal contact.
You are offered a prize by a contractor/client at a conference what do you do?
- 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 the business relationship it 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
- 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
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.
- Since they won’t be present, this will not be a genuine business event
- Consequently I would decline this hospitality
You are bidding for a project and the client advises that if you reduce your fee bid by £3,000 you will be first place and win the tender, how would you advise the client?
- Unfair competition
- Not treating others with respect
- Not acting with integrity
- Unsustainable to undertake business in this manner
- You would need to reduce scope to achieve same margin, would this provide high standard of service
- This could be interpreted as a bribe
A client takes you out for lunch after a business meeting, where they continue to discuss business. The bill for the lunch comes to £200. What should you do now?
- This lunch had a legitimate business purpose, so it’s fine to accept the hospitality
- But the client should have considered how a £200 bill for a lunch could be perceived and have chosen a more modest restaurant
- Given the size of the bill, it must be declared on the Hospitality Register and I would make my line manager aware immediately afterwards
- I would offer to reciprocate but ensure this is carried out in a more modest manner as the lavishness of the restaurant could be interpreted as inappropriate and disproportionate
How long should run off cover be in place?
Minimum of 6 years run-off cover, but more recommended. ‘Each and every claim’ basis for £1,000,000 aggregate limit
Can you tell me which two of the five Global Professional & Ethical Standards resonate with you the most?
Act with integrity
Treat others with respect
What are the requirements regarding PI by the RICS?
- Must be made on an ‘each and every’ claim basis
- Gives min wording
- fully retroactive
- Sets out minimum levels of indemnity
- Sets out maximum levels of uninsured excess
- Run off cover must be in place for at least 6 years
- Should include cover for past and present employees, directors and partners
What if the loss exceeds the cover provided by the PI insurance?
The professional / firm is liable for the difference – in assets etc
What measures should be taken to try and avoid PI claims?
- Keep full and detailed records of meetings, conversations etc
- 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
A newly appointed project manager working for your Client’s organisation advises that they are concerned about the terms their predecessors agreed with you. They state not to expect the same terms and advise that if you give a 20% discount they won’t renew your contract. How would you respond?
- Although this client manager is asking for a steep discount, it’s more a matter of him trying to renegotiate contract terms with us. So this can’t be classed as a bribe.
- I would advise that we would consider offering the saving but the level of service and resource would need to be reviewed inline with the reduction.
- Were the original fees considered as good value and a fair and reasonable sum / is this devaluing the profession
- It may not be sustainable and in the clients interests if I cannot provide a high standard of service
- A fee profile and resource schedule would need to be prepared to determine if the saving and adequate
level of service can be offered - May need to decline if unable to offer required service
Are you familiar with the term limit of liability and where would it be used?
There are three types of clauses that surveyors should consider and, if possible, include in all their retainers.
The first is a clause excluding personal liability of the individual surveyor and requiring the client to bring any claim only against the business. This is important because the courts have held that individual surveyors can be liable to clients where the retainer does not include a clause excluding personal liability.
The second clause which surveyors should include in their contracts is a proportionate liability clause. The purpose of this type of clause is to limit the amount the surveyor has to pay where both the surveyor and another party or parties (including the claimant) cause the loss which that claimant then seeks to recover.
The third clause which surveyors should look to include is a simple liability cap. This is a binding contractual arrangement under which the client agrees that it can only recover damages up to a specified amount, irrespective of what its actual loss is.
Assuming you were successful in getting chartered, how would you deal with a situation such as a friend who asks you to provide them with advice?
- I could not offer advice on my own without PI insurance.
- If I did have my own PI insurance I would ensure that the information given was subject to the thorough checking process given to all information prior to issue regardless of who it was to.
- Inform them they can contact you during working hours to discuss T&Cs of appointment.
- If you are not comfortable acting for them, advise them to use the RICS “find a surveyor scheme”
- Adhere to rules of conduct
Tell me how you have demonstrated two of the 5 Global
Professional & Ethical Standards on your case study project?
- On my project I aimed to exceed the clients expectations by providing the report ahead of the agreed deadline – High Standard of Service
- I also regularly caught up with my supervisor to discuss my progress and query anything I was unsure about - working within my competence
A tender is in progress for which you have submitted a bid. You get a call from the client who advises that they are involved as a parent in a junior theatre group. The client says they have read about your firm’s community initiatives and ask you to sponsor their annual performance.
They say are desperately short of funds and that they have donated money themselves. How would you advise the client in this scenario.
- The client may not be soliciting a bribe here
- Nevertheless a tender is in progress, any sponsorship made could be perceived as an undue influence and a bribe
- In the first instance you would explain this to the client and decline to make a donation
- To ensure transparency, you would also report the request to your line manager.
- Depending on advise from Senior Management it may be appropriate to escalate this to our firms whistleblowing policy
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, this supplier is persistent, and there is a red flag in that he wants to discuss things that he cannot put in writing, so we should report this infringement.
- Unfair competition
- Not acting with integrity or respectful to fellow contractors
