Complaint Handling and Alternative Dispute Resolution

Complaint handling

Requirements for RICS-regulated firms

The Rules of Conduct (rics.org) specify that it is mandatory for all RICS-regulated firms to publish a complaints-handling procedure, which includes an Alternative Dispute Resolution (ADR) mechanism, and they must maintain a complaints log. For more information on the Rules of Conduct and related case studies and guidance see Rules of Conduct.

Requirements for RICS Members outside of a RICS-regulated firm

In accordance with the Rules for the Registration of Schemes, RICS Members who carry out work outside of a RICS-regulated firm but are registered on certain RICS Schemes must have in place a complaints-handling procedure which includes an ADR mechanism. For more information on Schemes for members, see Rules for the Registration of Schemes (rics.org).

For further guidance on Complaint Handling, please see Client relationships and handling data guidance, Complaints Handling – guidance for RICS firms and Example Complaints Handling Procedure and Complaints Log.

Alternative Dispute Resolution (ADR)

What is ADR?

Alternative Dispute Resolution is a way to resolve disputes between clients and firms after an internal complaints procedure has been exhausted. It is less costly and time-consuming than having to go to Court. ADR is used to resolve complaints in lots of different sectors including financial services, energy and telecoms. You can read more about ADR on the Which? website (which.co.uk).

ADR can be used to resolve disputes between a RICS member/firm and their commercial clients (known as ‘business-to-business’), or between a RICS member/ firm and a consumer (‘business-to-consumer’).

Why is Alternative Dispute Resolution a requirement for regulated firms?

ADR is an important part of RICS regulation and helps to protect the public. Rule 5 of the Rules of Conduct states RICS members and firms must act in the public interest, take responsibility for their actions and act to prevent harm and maintain public confidence in the profession.  

RICS-regulated firms must have an ADR provider approved by the RICS Standards and Regulation Board (SRB). RICS members who work outside of a RICS-regulated firm but are registered on certain RICS Schemes must also have an ADR provider.

The ADR mechanisms used for complaints received from consumers must be a redress mechanism that is free to the consumer. A consumer can be broadly defined as a person who is not acting in the course of any business.

Members and firms must not dissuade complainants from approaching an Alternative Dispute Resolution provider, RICS or any other regulatory body.

What do RICS-regulated firms and members need to do?

RICS-regulated firms and those subject to requirements under the RICS Schemes to have ADR, must:

• find an ADR provider (or providers) which is appropriate for the professional services they undertake. RICS has procured a default ADR provider for UK-based firms to ensure that every firm can meet their obligations for ADR
• where a RICS-regulated firm does not have any consumer clients, they should inform RICS by selecting the option "no consumer clients" in the firm’s annual return.
• publish a complaints-handling procedure that includes their ADR provider and maintain a complaints log
• be transparent about their chosen ADR mechanism by informing clients or consumers when they make a complaint or the terms of engagement are agreed

Meeting the requirements in your region

The RICS Standards and Regulation Board maintains a list of approved ADR providers that members/firms can choose from in each region, for both business-to-business, and consumer-to-business complaints. Different ADR providers cover different kinds of complaints, and their fee structures are different. RICS-regulated firms should familiarise themselves with different providers to make the right choice for them.

If a RICS-regulated firm wishes to use an ADR mechanism not on these lists, then they must seek SRB approval. For guidance on the lists of approved ADR providers and seeking SRB approval, please see the individual guidance documents for each region below.

RICS has a default provider for consumer ADR for those UK-based regulated-firms who have not otherwise chosen a provider. For more information about RICS’ default ADR provider see Default provider for ADR – Centre for Effective Dispute Resolution (CEDR)