The RICS is tracking the DTI’s working party on bankruptcy, to see if its rules of professional conduct should be amended in line with the government’s intention to redress the stigma attached to business failure.
RICS conduct adviser Lindsey Pellow said: “We will follow the working party to see if any change is appropriate.”
Speaking at the Lord Mayor’s dinner on February 2, DTI secretary Stephen Byers said the working group will develop proposals to remove the negative image of bankrupts, by making a distinction between those who treat creditors dishonestly and “responsible risk-takers” who fail through no fault of their own.
The RICS code of conduct for surveyors treats bankruptcy strictly. Though it is not automatic grounds for expulsion or suspension, last June a new rule was introduced stating: “Every member shall so conduct his personal and business financial affairs as to avoid&his being adjudicated bankrupt”.
Before then, in almost all cases, bankrupt surveyors were found guilty of “conduct unbefitting a chartered surveyor”. These offences can result in a penalty ranging from a reprimand through to expulsion from the institution.
Pellow insisted that the RICS is already flexible – the General Council’s power to summarily expel bankrupts is not always applied. She added: “We do recognise the distinction between an honest and a dishonest bankrupt. But in almost all past cases, whether or not the bankrupt surveyor is expelled, a finding has been made of conduct unbefitting. The ground for this is that a professional man should pay his debts.”
In one case the RICS made no finding of unbefitting conduct when a surveyor’s bankruptcy was caused by his divorce. But a hard line is taken with surveyors who are declared bankrupt because of joint liability for a partner’s debts. Pellow commented: “If one is in partnership, one ought to keep a close eye on how the business is run. A partner is, after all, a sentient being and a professional.”
The government working group is due to report in April.
EGi News, 4/2/99
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