RICS revised Rules of Conduct – coming soon
The RICS's new Rules of Conduct are due to come into force on 2 February 2022. The rules combine the previously separate codes for individuals and firms in force since 2007 with the Global Professional and Ethical Principles from 2009, with the intention of providing a single, concise summary of all relevant principles, in order to allow RICS member firms and clients to understand what good professional practice looks like.
The publication of Standards and Guidance in specific areas is set to continue where more detail is needed, but these will flow from the Rules of Conduct. Already accompanying the new Code is a comprehensive suite of case study examples and an "Ethics Decision Tree", with CPD and implementation support available for members via the RICS Online Academy.
While the example behaviours set out under each rule are not mandatory requirements, they are likely to inform assessments of non-compliance with the rules. Firms and members will need to show that they did met the outcome envisioned by the rule. This may include an explanation of the reasonableness of an action, where a firm has departed from the example behaviours.
The new Rules are as follows:
Rule 1 – Members and firms must be honest, act with integrity and comply with their professional obligations, including obligations to RICS
This includes not misleading others by a firm/member's own actions or omissions and not being complicit in the acts or omissions of others. This specifically includes acting to prevent others being misled about the firm/member's professional opinion. Transparency regarding fees, money laundering, fraud and conflicts of interests are also dealt with here, including the requirement to have processes in place to identify and manage these risks.
Rule 2 – Members and firms must maintain their professional competence and ensure that services are provided by competent individuals who have the necessary expertise
In addition to ensuring they only undertake work for which they have the skills, knowledge and resources and that they supervise employees appropriately, members and firms are also required to check that subcontractors meet this standard. There is also an active obligation to reflect on work undertaken and how this might impact upon or apply to future work, alongside continuing CPD.
Rule 3 – Members and firms must provide good-quality and diligent service
This is arguably a higher standard that the common law duty to provide services with "reasonable skill and care". Included within this duty are clear communication with clients, understanding their needs and objectives as well as advising clearly on the scope and cost of the firm/member's involvement, both at the outset of any instruction and on an ongoing basis. Keeping accurate and secure records of work done as well as relevant data, together with providing material information to clients, are also highlighted.
Rule 4 – Members and firms must treat others with respect and encourage diversity and inclusion
Although intended to apply globally, the anti-discrimination provisions broadly mirror the Equality Act 2010, including the list of protected characteristics. RICS's position is that this is an illustrative rather than exhaustive list and firms and members must do what is reasonably possible to achieve the relevant outcome, within the applicable legal obligations in their jurisdiction. Going beyond this are obligations to ensure modern slavery or other workplaces abuses are not present in supply chains, and reporting these if they are suspected.
Moving diversity and inclusion to its own standalone rule underlines its importance in addressing the risk of the profession getting left behind if it does not address a lack of diversity and its causes at an individual, firm and sector level.
Rule 5 – Members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.
As well as responding to complaints promptly, openly and professionally, not dissuading complainants from approaching regulatory bodies and self-reporting suspected serious breaches of the Rules of Conduct, it is also expected that members and firms will actively question and report practices and decisions they do not consider to be right, provided this is done in good faith. This includes ensuring there are internal processes for individuals to raise concerns with senior management.
Public statements which could be attributed to members of RICS are explicitly referenced, which would include statements made on social media. This is far less private than many may expect, although the mere fact of posting from a personal account is usually insufficient to prevent scrutiny by the RICS. Indeed, the introduction to the rules states that "personal conduct may be relevant to the rules where it may damage public confidence in the profession".
There is also an obligation for members to consider the effect that any health conditions may have on their competence or ability to undertake work and to raise this with management or clients to seek reasonable adjustments, or, in some cases, to cease working. This puts the onus on firms and members actively to deal with this and is likely to impact on any applicable sanction where health conditions are raised as an explanation or mitigating factor to a charge of misconduct.
Only serious breaches of the rules are likely to result in disciplinary action, with firms and members expected to resolve minor issues without recourse to the regulator. The updated rules make it easier for firms to be aware of the standards expected of them and at the same time easier for clients to identify where the RICS member or form with whom they have been dealing may have fallen short.
RPC continues to act on behalf of many RICS firm/member in relation to regulatory actions and frequently witnesses an overlap between regulatory and civil and/or criminal proceedings. While the introduction to the new Rules stresses that the disciplinary process is not designed to replace other processes for resolving fee disputes or compensating for poor service, only time will tell what impact they will have on the number of regulatory actions that are pursued. It is almost certain that a prospective claimant's lawyers will review the Rules carefully to see whether they can assert that the member or firm has not followed them, as evidence of their negligent; and member and firms therefore need to ensure they are fully familiar with the Rules, to avoid giving a claimant ammunition for a claim.