What is meant by the term “professional ethics?”
The professional code
To safeguard the interests of the surveying profession at large and particularly the interests of those seeking advice from that profession, the major professional societies, the RICS and the ISVA, have, for many years, operated their own codes of conduct. These are codes of professional ethics laid down and enforced by the societies themselves, covering matters such as the expertise to be demonstrated by members of the profession, rules regulating admission to the profession, rules securing continued competence, rules governing the method of obtaining advice as well as rules for the enforcement of the code itself. The history of these codes extends back over many years; the RICS was formed in 1868 largely as a consequence of the involvement of surveyors in the development of the railway system. The rules of both bodies, though separately administered, amount to a uniform code governing the activities of members of the surveying professions.
These rules are contained within The Chartered Surveyors Rule Book (RICS) and Rules of Professional Conduct and Disciplinary Proceedings Rules (ISVA). The RICS rules appear as a set of bye laws and regulations. The bye laws are expressions of principle, which are of fundamental importance to the profession as a whole. Changes have to be approved by the membership at an extraordinary general meeting by a minimum of two-thirds of voting members and are then subject to the approval of the Privy Council, a consequence of the royal charter. Regulations are matters of detail, and the RICS General Council can change regulations after consultation with divisional councils. The RICS maintains disciplinary powers which enables it to reprimand, severely reprimand, obtain an undertaking from a member to refrain from activities contravening the rules of conduct, suspend or ultimately expel members from the institution. The ISVA Rules are governed by procedures set out in the society’s Articles of Association, and disciplinary procedures resulting from complaints of malpractice are dealt with by a professional practice committee.
Both codes begin with a general statement as to members’ conduct. Thus under the RICS Code, Bye Law 24 requires that “No member shall conduct himself in a manner unbefitting a chartered surveyor”. ISVA Rule 101 states:
It is at all times the first duty of a member to protect and promote the legitimate and ethical interests of his clients to the utmost of his ability, consistent with a professional standard of behaviour towards the other parties in any transaction.
These general requirements are followed by a wide range of specific rules regulating the behaviour of members in relation to aspects of practice which include: determining and maintaining the competence of members, the relationship between the chartered surveyor and those seeking his advice, the responsibilities of the professional, advertising and the attraction of business, and the relationship of the chartered surveyor with the rest of the profession.
These different aspects of the professional codes will be considered in turn. However, for a full appreciation of the nature of the various rules, it is necessary to have some understanding of what it is that a professional code of ethics seeks to achieve.
Professional ethics
It would be possible to enter into a considerable philosophical discussion on the meaning of the word professional, which would be about as tangible and pragmatic as a debate on the meaning of life. We think that we know what it means, but might be hard-pressed to define it with precision. Casual usage brings to mind the contrast between professional and amateur, but this is hardly relevant to the present context, which is more concerned with the idea of a vocation or calling than whether one is paid to undertake that calling.
The Oxford English Dictionary defines “profession” as:
a vocation in which a professed knowledge of some department of learning or science is used in its application to the affairs of others or in the practice of an art founded upon it.
Of course, one of the difficulties here is that the precise meaning of “profession” has changed over time. Thus, while for many centuries the church, law and medicine were recognised as professions along with the older armed forces, modern usage of the word must now be extended much further to include the Civil Service, teaching, banking and financial services, nursing and other areas of medical practice. The list is by no means exhaustive but, whatever occupations are included, it seems evident that there is some way in which these examples can be distinguished from other occupations.
One of the earliest distinctions identified by the professions themselves was a consequence of their desire to be disassociated from mere trade or commercial activity. Traditionally, the professions saw themselves as concerned with the supply of skilled advice on a basis of trust and confidence, as distinct from the supply of goods. The professional would expect to find himself operating as a private practitioner or consultant rather than as an employee. His fundamental concern would be seen as meeting the needs of individual clients on the basis of remuneration by payment of fees. The relationship between the professional and his client would be based on a tradition of service, the provision of advice based on an objective outlook where the motive of making money is subordinated to the service of the client. Such distinctions are no longer appropriate, but the representation of different professions by institutions which exist to safeguard and develop the expertise and standards of that profession through rules and codes of practice owes its origins to these now somewhat outdated concepts of professionalism.
While the modern professional is not now unduly concerned about the distinction between professional and commercial activity, there can be no doubt that professional practice involves ever more complex knowledge and highly developed technical skills. In most cases this requires a long period of study to master difficult material, knowledge and skills which concern matters crucially important to members of society because they deal with basic human needs. Professionals receive economic rewards as a consequence of these skills, and their knowledge places them in positions of power and authority over lay members of the public, who rely on them for advice. This carries with it a high degree of moral or ethical responsibility which needs to be reflected in any code of professional conduct.
Competence
With the increasing complexity of the society in which we live and the resultant development of knowledge, so the complexities of providing a professional service increase. The role of the professional bodies is initially to ensure the necessary supply of practitioners of suitable ability and to ensure that an appropriate degree of competence is maintained. Members of the public have a right to expect competent advice. Unlike the purchaser of goods who can inspect them to ensure that he is being supplied with the standard and quality he requires, those engaging professional services have no such opportunity. The designation conferred by a professional body becomes recognisable as a hallmark by which that expectation can be judged. The professional body then will be concerned with admission to the profession, practical training, examinations and the maintenance of competence and the identification of appropriate designations which can be recognised by the general public as offering some reassurance about the standard of service that they will be offered.
The monitoring of competence does not, of course, cease with the award of the qualifications to those considered appropriate to enter the profession in the first place and the determination of how they should be trained but depends also on the maintenance of appropriate standards through continuing professional development. Thus RICS Bye Law 9(3) and ISVA Rule 111 require that all members undergo continuing appropriate training. For chartered surveyors this obligation applies to all members of the profession with effect from January 1 1991.
Relationship with the client
It should be clear that the professional is concerned with the relationship between himself and his client. He needs to be capable of dealing with his client’s affairs with tact, imagination, good manners and sympathy. In this the traditional concept of personal service remains, requiring attention to the needs of the client and a prompt dispatch of his business: anything less might be interpreted as misconduct.
Traditionally, this requirement was thought to be best supplied by the individual acting alone or through a partnership. The employee might find his professional relationships compromised by his overriding responsibility to the employer, or those operating within the corporate sector might be tempted to shield themselves behind limited legal liability. In fact, though the RICS Code of Practice still provides some restrictions on practice through the medium of a company, it must be made clear that the codes of practice apply equally to those operating from within a limited or unlimited liability company and to employees, whether in the public or private sector as well as partners and others operating in private practice.
The professional relationship is based on trust. The professional must know about his client’s affairs if he is to be in a position to offer competent advice. This may include sensitive information, the disclosure of which would cause the client embarrassment or financial loss. The client needs to feel secure that such information will not be disclosed. Thus RICS Regulation 19 requires that no disclosure of personal information concerning clients be made.
Impartial advice is that untainted by private interest, free from personal involvement, pressures or influence. The surveyor must, therefore, be impartial and, perhaps more important, be seen to be impartial. Thus, where there is any possibility of a conflict of interest arising it might be prudent to decline an instruction. Problems can obviously arise in being required to act for competing clients, and RICS Bye Law 24(3) and Regulation 8 and ISVA Rule 104 govern the disclosure of any conflict of interest to clients. Conflicts or potential conflicts of interest must be disclosed in writing to the client at the earliest possible opportunity. In such circumstances the client can request the surveyor to continue to act, but only after obtaining independent professional advice.
Apart from the obvious hallmark of competence, membership of a professional institution is an indication of good character. Thus conviction of a crime where the offence is likely to impair the client’s trust will normally result in expulsion. Clients have a right to expect fair treatment, and the relationship of trust and integrity which must exist will depend on full disclosure of all facts and a clear understanding that the professional will receive no profit from providing a professional service, other than the professional fee. Taking interest on clients’ money, bribes, dealing with clients’ property and sale of property at undervalue are obvious examples of activities which undermine this trust and which are clearly unacceptable.
To safeguard the essential integrity of the relationship surveyors are, for example, required to keep separate accounts for clients’ money and to make returns to the institution every 12 months. Clients’ money is defined to include rents, building society valuation fees, service charges and deposits. As an area fraught with difficulties and potential problems the accounts regulations are detailed and specific. Members are required to ensure adequate book-keeping and recording to assist in the management of clients’ affairs. Clients’ money must be paid into account without delay. The regulations specify the circumstances in which money may be drawn as well as the means of withdrawal. There is a requirement for written up accounts as well as accountants’ reports.
To avoid any possibility of misunderstanding chartered surveyors are always required (under RICS Bye Law 24) to notify clients of the terms and conditions under which they are acting. Before quoting a fee it is always necessary to seek sufficient information from the client as to the nature of the work to be undertaken.
Attraction of business
Business must be attracted fairly. No pressure or influence can be brought to bear for the securing of instructions. The payment of inducements for attracting business is not normally acceptable, although some relaxation of this general rule has taken place to allow payments to be made to third parties where disclosure is made to the prospective client.
The prohibition of advertising was once an essential characteristic of the professions; the principle being that the professional man should not seek work but let it come to him. For many years it was felt that the only acceptable form of advertisement was personal recommendation. This is, of course, no longer the case. The ability to advertise services was initially granted to surveyors operating in the area of estate agency and is now broadly acceptable. Part of the objection to advertising stemmed from the perceived distinction between trade and the professions but also from the generally unrestrained nature of advertising during the 19th century. Time has, of course, moved on, but some significant restrictions do remain.
Instructions may be invited, but generally not by personal calls or telephone calls to private addresses. Personal approaches are, however, admissible for estate agency services, provided that it is made clear in writing that a liability to pay further commissions may arise. In the case of professional services other than estate agency, personal approaches can be made, but any invitation for instruction should make it clear that instructions will not be accepted for work in hand where another professional adviser has been retained.
Any publicity should be accurate and not misleading and not cause offence. It should be noted that this will include advertisements, auction catalogues and sales particulars, anything, in fact, that can be identified as a public statement. Members are required not to do anything which undermines the standing and repute of the profession as a whole, and fellow practitioners are to be treated with courtesy. Thus, advertisements which are made at the expense of others are not permissible, and RICS Regulation 18 requires that no claims of superiority can be made unless substantiated to the satisfaction of the General Council. While the concept of a fixed scale of fees is no longer appropriate, it is not permissible to quote fees calculated by reference to those charged by any other member of the profession.
Responsibility
The professional is fully and personally responsible to the client for advice given, and this could be said to be one of the main distinctions between the profession and other occupations, that of technician for example. The primary duty is to the client, but he will also be responsible to the profession and to society at large. Responsibility will normally be covered by the law of negligence, which determines that the professional owes a duty of care to the client. Even where there is no legal responsibility certain acts can amount to professional misconduct as defined within the professional rules.
In partnership law all partners will be jointly and severally liable for any breach of contract or tort committed by the firm. Partners and other employers are also responsible for the conduct of anyone in the firm, even though they are not members of the professional institution. This rule applies to any member who allows himself to be “held out” as a partner. In this context practising through the medium of a company is now acceptable, provided that a provision is included in the Memorandum of Association that surveying services will be conducted in accordance with the code of practice.
Protection for members of the public from acts of negligence are covered by the RICS rules requiring compulsory professional indemnity insurance. Chartered surveyors must be covered by a policy which is no less comprehensive than the professional indemnity collective policy as issued by RICS Insurance Services. This provides minimum cover of £100,000 for each and every claim where the gross income in the preceding year does not exceed £100,000, or £250,000 where it does. The maximum uninsured excess is 2.5% of the minimum cover.
It should be noted that the collective policy also indemnifies against any civil liability. Insurance cover must exist at the time the claim is made. Run-off cover in respect of past work is now required and is compulsory for members retiring after January 1986. It should be remembered that claims against personal representatives can be pursued even after the death of the member concerned. Similarly ISVA members are required to comply with the society’s rules relating to the Scheme of Mandatory Professional Indemnity Insurance.
In the past, one of the reasons for the existence of the professional institutions was a response to the need to protect the shared interests of their members, but it has been argued that the existence of professional bodies actually served to restrict competition. Such issues have, on occasion, even resulted in formal investigation — the Monopolies Commission report on estate agency services, for example. These traditional elements of professionalism have been progressively eroded as restrictions on advertising and fee scales have become more permissive, and protection of the interests of the client public have overtaken any idea that the institutions’ professional codes exist primarily for the protection of their members.
This is not intended to be a comprehensive outline of the rules of the two main professional bodies. The Code of Professional Conduct is essential for the preservation of public confidence in the profession at a time when its activities are under increasing scrutiny. It is, therefore, essential reading for all surveyors and all who intend to enter the profession.
Further Reading
The Chartered Surveyors’ Rule Book, Rules of Professional Conduct for Chartered Surveyors, RICS 1990
Rules of Professional Conduct, Disciplinary Proceedings Rules, ISVA, 1991
Richard Chalkey, Professional Conduct: A Handbook for Chartered Surveyors, RICS Books, 1990
