Complaints and Claims.
Prior to 2019, when Sava had a scheme Professional Indemnity (PI) policy in place, we were able to handle many complaints and claims on behalf of our members who produced the Home Condition Survey (HCS).
In doing so, we have truly learnt the importance of having an excellent set of site notes and evidence from an inspection. In this article, we discuss how your evidence and processes can help defend you in the event you receive a complaint or claim.
Complaints and claims can arise some years after the survey was undertaken and the report prepared and sent to the client. It is unreasonable to expect you to remember an inspection in great detail, therefore the main reliable source of information about the inspection, and proof that what was quoted in the report was in fact the case on the date of the inspection, will be the comprehensive record of the inspection you made while on site (including any annotated photographs, measurements, moisture meter readings etc.) together with any notes relating to the research undertaken before and after the inspection as well as any conversation or other communication you might have had with your client. If the client challenges your report it will be down to you to prove that what you reported to your client was appropriate for the service provided and correct at the date of inspection, and that you were not negligent. Therefore, even if an issue wasn’t apparent on the date of the inspection, if you do not have evidence to prove that, then you will already be on the back foot. When Sava has handled complaints on behalf of an HCS users it would probably be fair to say that ‘on the date of inspection’ was the most commonly used phrase in complaint responses because it is important to emphasise that the surveyor can only report on what was present on the date of inspection or what would have been reasonable to detect. Properties can deteriorate over time and, of course, there are often limitations to the inspection, meaning it was not possible for the surveyor to ‘see’ something on the day of the survey.
Our analysis shows that complaints and claims are on the rise, likely due to the litigious society we live in. We know from experience that you are more likely to refute a claim where there is robust evidence available. It is therefore beneficial for you to implement best practice as soon as possible, to protect yourself even in years to come.
Here are some tips to help you manage complaints smoothly and keep stress to a minimum.
Firstly, you must have a complaints procedure in place, and we recommend you review it annually to ensure it is still compliant with both the rules of your insurer and your professional body, where appropriate.
It is very important that you are familiar with the process of notifying your insurer when a new complaint is received. If you do not follow the exact requirements of your policy, then you may inadvertently put yourself in a position whereby your insurers will not honour any claim made against you. If in any doubt, check this with your broker. In our experience, different insurers have a slightly different approach.
Notifying your insurer –
For one PI policy held by Sava the rule was that we should notify the insurer of a ‘complaint’ in the event that there was a more than 50% chance that the complaint would turn into a claim. Over time we built a good relationship with that insurer and they were happy for us to deal with the customer initially on the basis that we were ‘clarifying the level of service provided’ and happy for us to notify them only after we had had this initial conversation.
Another insurer was far less happy for us to work like this, wanting us to notify them of any potential complaint. Over a period of time they trusted us to determine if the initial enquiry was indeed a complaint or merely required clarification on the level of service.
When you deal with customers directly you should never admit liability or offer to refund a fee unless you have approval from your insurers. Such an action can be inadvertently taken by a client as an admission of liability.
Managing the client’s expectations
It is inevitable that you will receive a complaint. No matter how competent and experienced a surveyor you are, in our experience life is full of unpredictable events. Some of the largest claims we have ever had to deal with have been the culmination of very unfortunate circumstances.
If you receive a complaint, we suggest you take the following approach: –
- Acknowledge it politely but do not immediately attempt to refute the complaint. Instead, tell the complainant that you “will review your file” and will respond when you have done so.
- To manage their expectations, give them an estimated date by which time you will have responded.
- Notify your broker (who in turn will notify the insurer) that you have received a potential complaint and that you are looking into it.
- Be aware that even though you should carry insurance, many insurers do not like you admitting to your client that you are insured as they believe it makes clients more inclined to litigation. Do not tell the complainant that you will refer to the insurance company.
- Investigate the file and be honest and open with yourself – could you have missed something? At Sava we have always created a summary document setting out a timeline of what happened etc. (more detail on this later).
- If it is taking longer than expected, perhaps because your insurer is still to come back to you, send a holding email or letter to confirm you are still investigating. This is very important because clients are much more likely to be antagonised if they think you have forgotten them. You are in a much better position if you contact them regularly even if it is only to say that you have nothing to report. (You may have to think carefully about the wording you use for this to make the delay credible.)
NOTE: If the first you hear of a complaint is a letter from a solicitor acting for a client and threatening legal action, immediately inform your insurers. Ignoring such letters will not make the matter go away.
When we handle a complaint through our PI policy, we investigate the complaint as follows:
- Carefully and dispassionately review all the evidence. (This can be difficult if you are a sole trader because the criticism is ‘personal’. If you are in a practice, finding a colleague to do the review will probably be more palatable.)
- We document the whole complaint journey considering all the evidence available including: photos, site notes, pre-inspection checks, terms of engagement and any other documents relating to the survey. (We make a separate word document describing the whole journey – this makes it much easier for the insurers to digest the facts.)
We determine if the claimant has a case and we are quite open and honest about this with the insurer. It helps them determine the strategy to defend the claim. (For example, if there is an asbestos-containing material that the surveyor simply ‘missed’ – we will say so. Our approach is always to ask, ‘could we defend this if it were to go to court?’ We are honest with our insurers and if we think that an element could have been reported differently or we will struggle to defend due to lack of evidence, we will always report this to the insurers.)
- Working with the broker/insurer, we draft an initial response to the client. We obtain the insurer’s consent to send the response.
- We liaise with the broker/insurer again when the response has been received from the claimant (it can be a very lengthy process, especially if we are strongly refuting a claim or the client does not understand the exact nature of the service that they bought. In these circumstances there can be many rounds of communication between the parties).
As a minimum, a robust folder of evidence would include:
- Terms and conditions of engagement, signed and dated by the client
- Clear, legible site notes with page numbers and a reference to the property on each page and sufficient information on the condition of each element. If you are using the HCS, you should also demonstrate use of the ‘Sava Protocol’ so that a third person can follow your reasoning. (This has proven to be very helpful when determining how to defend a claim.)
- Enough annotated photographs to show all elements of the property. Remember, you may need to prove a defect was not present or visible on the date of inspection, so contextual photos of the rooms are vital. This can mean you take hundreds of photos for each inspection.
- Copies/screenshots of your desktop research (these should be saved at the point you undertake the inspection as search results can change).
- Copies of any correspondence between you and your client (including simple emails confirming inspection etc.).
Case Study: Freeborn and Another -v- Marcal
In February 2019, a judgement was handed down against an award-winning architect (Marcal) and the claimants (Freeborn & Another) have secured £500,000 for professional negligence.
The architect was commissioned to design and project manage a conversion of the swimming pool hall and installation of a ‘floating’ glass box cinema. As works progressed, the claimants were unsatisfied and claimed it was not what they agreed. There were also a number of defects with the works that the defendant was unable to rectify. The architect subsequently abandoned the project and the claimants instructed solicitors to commence pre-action correspondence. Over two years later, the matter was tried, and the judge found both the claimants to be impressive witnesses as their evidence was clear, concise and they avoided exaggeration and speculation. However, the defendant’s recollection of events was confusing, unconvincing and suggested his approach to the job was unorganised. Marcal claimed that he was instructed on an ad hoc basis and, to support his argument that an agreement was made to reduce his responsibilities in the project, he produced a meeting note dated 9 July 2015. However, after a cross-examination from the Counsel of the claimants, he later admitted that this note was not written on 9 July 2015, but much later.
Nik Carle, Partner at Browne Jacobson LLP advises: “The Freeborn and Another -v- Marcal case highlights that it is essential to keep detailed records of instructions received, email exchanges, notes from meetings with the clients or telephone conversations, as well as a written retainer. The lack of a clear written retainer almost always proves fatal for defendants in professional negligence cases, unfortunately. (Arguably, the failure to set out the engagement in writing is in itself a breach of professional duty!)”
Remember, Terms and Conditions of Engagement must be signed by the client before work is undertaken as this ensures the client has a clear understanding of the service to be provided.
Organisation is key
Receiving a complaint is stressful. While it is not going to completely alleviate the stress, having an organised system for storing all the information relating to an inspection will undoubtedly save you time and not build on that stress.
Handling a complaint or claim can involve a LOT of emails. We have found it best to save all the emails and other communications relating to the complaint in a separate folder and number them in order, so you can easily review the trail. A complaint can ‘go quiet’, then rear its head again after a long time (months or even years). Therefore, having it all organised in one place will mean you can jump straight back in without delay. It’s also a good idea to set calendar reminders if a response is due by a certain date.
Back it up
There have been several complaints we have handled where the surveyor’s evidence has become corrupt or lost. This can result in problems defending the report, so it is best to back up your files so if one set is missing, you have a backup. We hear horror stories of files stored in damp garages. Consider carefully how you store documents, and ensure you can retrieve them easily in the event that a complaint does arise.
We handled a claim last year and our surveyor was first made aware there was an issue when he received a letter pursuant to the professional negligence pre-action protocol for failing to detect Japanese knotweed.
The surveyor sent us all evidence along with his comments. Having reviewed the evidence, we were confident that he was not negligent. His evidence included notes to confirm there was no evidence of Japanese knotweed, enough clear photographs to show the garden in question, as well as the surrounding grounds and even showing the river bank which shows he walked along the river to check for signs of Japanese knotweed nearby. None of the photos showed any visible signs of Japanese knotweed. He included screenshots to show he had checked on the plant tracker website and there were no recorded incidents of Japanese knotweed nearby. He also had signed terms of engagement which confirms the surveyor is not able to trespass on adjacent property (which is where the Japanese knotweed is thought to have originated from).
With the evidence alone, we were confident we could refute the claim but what was also interesting is the client’s solicitors included a report stating there was evidence of previous growth from the year before. At the time of the inspection, the garden appeared to have been landscaped recently and was well-kept. We highlighted that if there was evidence of previous growth, which was only established by the specialist moving the plum slate in the garden, then it was likely the previous vendor was aware of the issue and it had been concealed. We referred to section 5.3.2 of the RICS information paper ‘Japanese Knotweed and residential property’ where it states, “…Concealment: Japanese Knotweed can often be hidden among other dense foliage or – as is more likely – owners may deliberately conceal growth. Typical examples include: the physical removal of the plant prior to inspection; covering over with turf and mowing the lawns before inspection; covering the garden with landscape fabric and ornamental gravel or bark chippings, and so on…”. Based on the information we had, we felt the client ought to look to the previous vendor.
At the time of preparing our response, research from ecologists at global infrastructure services AECOM and the University of Leeds found that there was nothing to suggest that Japanese knotweed causes significant damage to buildings and our solicitor referenced this in our letter of response.
In comparison to other cases where evidence is not as robust, our letter of response was rather straight forward to prepare as we were able to refer to the points mentioned above and deny any liability or negligence in the matter. To date, this matter has not escalated following our letter of response.
It should also be noted that at the time of writing this article, the RICS ‘Japanese Knotweed and Residential Property, 1st edition’ information paper is no longer current but can be referred to for information.
It is our opinion that the surveyor is often seen as the easy target when something goes wrong with a property and sometimes clients are spurred on by another party who advises them “your surveyor should have picked up on this”, perhaps without understanding a surveyor’s limitations properly.
Remember, any surveyor can receive a complaint and it is not necessarily a reflection on their ability. It could be that the client has misunderstood the limits of the survey; sometimes the client has not even read the report (we have handled incidences where the client has not revisited the report before complaining and it turns out the surveyor clearly pointed out the issue and the client did not act on the information prior to purchase). We also find that clients are going straight to law more often these days, meaning solicitors must be instructed on the opposite side automatically. It is unfortunate, but if this occurs you can rest easy knowing you have a full set of excellent evidence to support you should a complaint or claim occur.