Hot Topic Highlight - Complaints Handling Procedure (CHP) - January 2019

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This week, we will be looking at Complaints Handling Procedures. This updates an earlier blog article, to include the revised RICS Alternative Dispute Resolution (ADR) Mechanisms - UK & Ireland (Version 6), which takes effect from January 2019. 

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This week we are going to look at another RICS APC hot topic; Complaints Handling Procedures (CHP). This specifically forms part of the Conduct rules, ethics & professional practice and Client care RICS APC competencies, as well as being vital knowledge for qualified members and RICS APC candidates in your everyday working life.

A complaint is defined as 'a statement that something is unsatisfactory or unacceptable' or 'any expression of dissatisfaction'. They generally arise when expectations are not met, e.g. timing, scope of work, misunderstandings and delays. 

Therefore, the best way to avoid complaints in the first place is by:

• Setting out clear expectations in Terms of Engagement (referring to your CHP) and Key Performance Indicators
• Communicating clearly and effectively with your client and other key stakeholders
• Seeking feedback and resolving issues efficiently as they arise

By managing complaints in an appropriate manner, you can create an opportunity to rectify service problems and further develop client relationships.

RICS regulated firms are required by Rule 7 of the Rules of Conduct for Firms to 'operate a complaints handling procedure and maintain a complaints log. The complaints handling procedure must include an Alternative Dispute Resolution (ADR) mechanism that is approved by the Regulatory Board'.

A firm's CHP should also be approved by your Professional Indemnity Insurance provider.

The RICS have issued a Guidance Note for residential surveyors and valuers on complaints handling; Complaints handling (1st edition, 2016). This is also likely to be of interest to surveyors within other sectors, e.g. commercial, although the principles are of primary application to the residential sector. 

The key principles of an effective CHP are being:

• Fit for purpose
• Understood
• Available
• Readily shared
• Reviewed regularly

We recommend reviewing your firm's CHP, although you can also check out an example from RICS here.

The key stages of complaints handling are as follows:

• Stage 1 - written complaint received and reviewed by the firm, acknowledged within 7 days and responded to within 28 days
• Stage 2 - complaint reviewed by an independent redress provider (approved by RICS and confirmed by the firm to RICS in their annual return)

Stage 2 should include a separate redress provider for business-to-consumer (customer complaints) and business-to-business clients (contractual disputes), both of which must be approved by RICS. This is where the new 2019 RICS Regulation paper becomes relevant. 

The principles that the RICS Regulatory Board consider when approving ADR mechanisms include:

• Customer complaint mechanisms should be free of charge to the consumer
• The scheme must be well-established
• The scheme must be independent of the firm
• The scheme must use a transparent, accountable and consistent decision making process

Examples of consumer redress mechanisms include Centre for Effective Dispute Resolution (CEDR) (which replaced Ombudsman Services: Property from August 2018), The Property Ombudsman, The Property Redress Scheme, Financial Ombudsman Service and the Local Government Ombudsman. These are generally all ombudsmen schemes.

Business-to-business redress providers include CEDR Solve, RICS DRS, Neutral Evaluation Procedure for Surveying Disputes and the SCSI DRS. These generally involve negotiation, mediation, arbitration or single issue adjudicators. 

Finally, a client can also complain to the RICS about the service or professionalism of a member or regulated firm, i.e. if the standard of a reasonable professional or firm has been breached. 

They will not determine whether a professional's opinion is correct or offer a second opinion and cannot resolve issues subject to Court proceedings or where another resolution mechanism exists, e.g. challenging an Award under the Party Wall Act etc. 1996.

However, RICS generally only investigate matters if they are in the public interest in order to take disciplinary action to protect the public, rather than to punish the professional or firm. The process usually takes 6 months and there is generally no right of appeal against a decision to close a case or agree a consent order. 

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Stay tuned for our next blog post to help build a better you

N.b. nothing in this article constitutes legal or financial advice.