Where are details of CHPs set out?
RICS Help Sheet 2007 (updated 2012)
Who must approve a firm’s CHP?
Who should be notified in the event of a complaint?
Why should PII Insurers be notified of a complaint>
It could lead to a claim for negligence
When should details of the CHP be issued to a client?
The same time as Terms of Business
What must firms include within their CHP?
An RICS approved ADR nechanism
Where should complaints be recorded?
A complaints log
What is stage 1 of the CHP?
In house response.
Complaint must be made in writing.
Details of The Complaints Handling Officer should be provided.
Acknowledge within 7 days and investigate within 28 days
What is stage 2 of the CHP?
ADR - independent redress scheme
When would the RICS become involved?
If a member fails to respond or prevents access to an independent redress scheme.
What are approved redress mechanisms?
The Property Ombudsman
Ombudsman Services: Property and the RICS Dispute Resolution Service
What duty of care exists to clients and third parties?
‘Reasonable care and skill’
What can result in a loss and claim for damages?
Breach of duty of care - reasonable care and skill
What did Scullion v Bank of Scotland (2010) show relating to a breach of duty of care?
A Surveyor who provides advice on value to a lender in respect of a buy to let purchase does not owe a duty of care to the borrower seeking funding.
Which case illustrates the importance of run off PII cover?
Merrett v Babb (2001) - individual surveyor successfully sued for negligence after form became insolvent and PII cancelled.
What case appears to set limits on Merrett v Babb (2001)?
Matthews v Ashdown Lyons and Maldoon (2014)
Why would surveyors have more power tp fight negligence claims for a higher value property?
Foreseeable that borrower would arrange own survey.
What is the usual permissible margin of error allowed by the courts in relation to valuations?
What is the leading case relating to margin of error?
Singer and Friedlander v Wood (1977).
Narrower margin for relatively straightforward case. Can be varied.
Which case confirmed a margin of error at 5% for standard residential valuations?
Webb Resolution v ESurv (2012)
2 negligent valuations. One not inspected once construction works complete, other used borrower’s figure rather than valuing independently.
What are the current limitation periods for negligence in accordance with the Limitation Act 1980?
6 years from date of negligent act, breach of contract or omission
NB Section 14A provides alternative limitation period of 3 years from date of knowledge of damage subject to the 15 year long stop from the negligent act/omission.
6 years from date claimant suffered loss.
How can negligence claims be avoided?
- Clearly understand instructions - confirm in writing in terms of engagement.
- Check competent and have necessary information.
- Undertake work in accordance with relevant RICS standards.
- Make detailed file notes and take photos.
- Keep up to date with market knowledge and legislation and undertake CPD.
- Cap professional liability excess in Terms of Engagement.
What is mandatory sir surveyors working in practice to protect from negligence claims when there is a duty of care breached?
Where are details of PII set out?
RICS Help Sheet 2012
What are the current minimum PII requirements?
£100,000 or less
Min £250,000 each and every claim
£100,001 to £200,000
£200,001 and above
PII policies work on a ‘claims made’ basis. What does this mean?
The policy covers claims first made during period of insurance regardless of when negligent act occurred.
What is the minimum run off period that should be covered?
6 years of cover at £250,000, but RICS recommends up to 15 years.
What is available for members who cannot arrange cover?
RICS Assigned Risks Pool and Low Earners Scheme for retired/PT.