Professional ethics

Imposing ethical responsibilities is not only about the concept of ethics; there is also a legal framework to be considered. In particular, the law of contract and the law of tort each impose responsibilities and duties on individuals.

Law of contract

A contract is an agreement entered into voluntarily by two parties, where consideration (generally money) has passed between those two parties, and where the terms of that agreement are enforceable. Members and their firms are liable to anyone with whom they make a contract, for their breaches of that contract. They are not usually liable to third parties for such breaches but the Contracts (Rights of Third Parties) Act 1999 does introduce third parties’ rights in some cases, namely where the contract contains an express term to that effect or where, on a proper construction, it is apparent that the contracting parties intended to introduce such a benefit. It should be noted that where advice is being given by someone on behalf of their employer, the contract will generally be between the employer and the client.

Some contracts are personal appointments, for example Law of Property Act (LPA) Receiver appointments. In such cases, the contract will be between the client and the individual. Where contracts are not personal appointments, surveyors should ensure that they sign ‘for and on behalf of’ the firm where possible.

Contracts for the provision of advice and services will usually contain an implied term (both at common law and pursuant to the Supply of Goods and Services Act 1982) that the advice and services will be provided with all reasonable care and skill.

Law of tort (or ‘delict’ in Scotland)

The law of tort is designed to regulate the conduct of individuals to each other and allows for compensation or damages if one party suffers a loss through another’s action. It deals with civil wrongs.

The law of tort introduces the important concept of duty of care. Under the law of negligence, an actionable error or omission is known as a tort. The law of negligence is based on the very wide principle that we are all under a duty to take reasonable care to avoid acts or omissions that we can reasonably foresee would be likely to injure our neighbour. In the context of surveying, ‘neighbour’ includes those who are so closely and directly affected that a surveyor ought reasonably to have them in mind when undertaking work. The standard of care expected of a surveyor, however inexperienced, is that of a reasonably competent and experienced surveyor. The duty of care certainly extends to the client, concurrent with the surveyor's contractual duties. The position for third parties is less clear, as the general rule is that a professional person will not owe third parties any duty to prevent purely financial losses, such as purchasing or investing in a property at an overvalue. However, that general rule will not apply where there is a voluntary assumption of responsibility on the part of the surveyor, or where there is a special relationship between the two parties that makes it fair to impose such a duty. For example, in several decided cases, a valuation prepared for a lender client has given rise to a claim, not only by the client, but also by the third party borrower who is purchasing the property in question. However, where that borrower is taking out a loan for some purpose other than to purchase the property (for example, a bridging loan), the surveyor will not owe them a duty of care.

An employer will generally have responsibilities in tort (or delict) to clients (concurrent with the contractual responsibilities), but individual employees may also owe a duty of care personally, particularly if they undertook the whole of the relevant task.

Other areas of law

In addition to the law of contract and tort there are other laws that relate to ethics and conduct that apply to everyone but have a particular relevance potentially to surveyors. These include:

• Bribery Act 2010
• Equality Act 2010
• Consumer Protection from Unfair Trading Regulations 2008
• Business Protection from Misleading Marketing Regulations 2008

You should also be aware of specific legislation regarding conduct relating to your area of practice.