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Case Study 11

ROC Case Study - 11

These case studies are examples to help you to apply the Rules of Conduct in situations that may arise in your professional practice.

When making ethical professional decisions, you need to:

  • consider the facts
  • identify the relevant RICS standards in the Rules of Conduct and other guidance
  • use your professional judgement, which may require you to balance different interests and principles.

What matters is that you can show that you have done your best to follow the professional standards set by RICS.

Read the case study below

Scenario 11

I am a member of RICS and the director of a property development company that does not provide surveying services to the public. We have just discovered that one of my co-directors has been misappropriating money that should have been paid to contractors. We have realised that our controls and record keeping were not good enough because this went unnoticed for so long. We are now going to have to go into liquidation. There are a lot of angry people owed money by the company. What happens if they complain to RICS?

Summary

  • The Rules of Conduct apply to members outside their professional practice where their conduct could damage public confidence in the profession.
  • RICS would consider whether personal or other business conduct was connected to professional practice or professional standing, and whether allegations were serious.

Rules and behaviours

Rules 1 and 5 are relevant here.

In this example, mismanaging a business so that people are defrauded and the company has to go into liquidation could potentially be a failure to act with integrity under Rule 1, or a failure to maintain public confidence in the profession under Rule 5. Many surveyors run surveying businesses that hold or manage client money and so a failure of this type could be relevant to professional practice. However, how serious the breach is will depend on the particular facts of the case and the member’s knowledge and culpability for the failures. For example, RICS would consider whether the member was responsible for the part of the business that money was missing from, or had any personal responsibility for keeping records and implementing financial controls. 

Commentary

The Rules of Conduct apply to all members, whether they work in regulated firms or not. They are intended to ensure that professional surveying work is carried out to the standard that RICS expects, and so do not apply in the same way to work a member does in other types of business or to personal conduct. However, a member’s conduct outside of surveying services could damage public confidence in the profession and this could require RICS to consider their conduct. Regulation should only extend into a member’s personal or other business activities where that is necessary in the public interest.

In deciding whether there could be a breach of the Rules of Conduct, RICS would consider two important elements:

  1. Is the conduct complained about relevant to professional practice or could it have an impact on the standing of the profession?
  2. Is the conduct serious enough to justify regulatory action in the public interest?

Of itself, a business becoming insolvent, whether a surveying practice or not, is not evidence of misconduct by its directors. Companies fail for many reasons and while the individuals who lose money because of the failure may feel that action should be taken, RICS will consider whether there has been any improper behaviour by an individual.