RICS professional guidance, UK Management of risk

1 rics professional guidance , UKManagement of risk1st guidance noteManagement of riskRICS guidance note1st editionPublished by the Royal Institution of Chartered Surveyors ( rics )Parliament SquareLondonSW1P responsibility for loss or damage caused to any person acting or refraining fromaction as a result of the material included in this publication can be accepted by theauthors or by the QS and construction working group of the Royal Institution ofChartered 978 1 78321 107 4 Royal Institution of Chartered Surveyors ( rics ) June 2015.

2 Copyright in all or part ofthis publication rests with rics . No part of this work may be reproduced or used in anyform or by any means including graphic, electronic, or mechanical, includingphotocopying, recording, taping or web distribution, without the written permission ofRICS or in line with the rules of an existing in Great Britain by Columns Design XML Ltd, Reading, would like to thank the following for their contribution tothis guidance note:Technical author:Richard Newey, AECOMW orking group:Chair.

3 Andrew Smith FRICS (Laing O Rourke)Stuart Earl FRICS (Gleeds)Roland Finch FRICS (NBS)Christopher Green FRICS (Capita Property and Infrastructure)Roy Morledge FRICS (Nottingham Trent University)Michelle Murray MRICS (DBK)Alan Muse FRICS ( rics )Michael T O Connor FRICS (Carillion construction Ltd)Martin Stubbington MRICS ( rics )Kevin Whitehead FRICS (McBains Cooper Consulting Ltd) Management of riskiiRICS guidance iiRICS professional 11 Introduction .. 32 General principles (Level 1 Knowing).

4 Key principles of risk Management .. of risk .. of of risk .. Response/mitigation strategies .. avoidance .. sharing .. of risks .. Procurement routes and route .. factors .. Risk quantification process and requirements .. trees .. limit tree analysis .. tree analysis .. addition .. method of method .. Sensitivity analysis .. Effect of risk on programme and cost ..83 Practical application (Level 2: doing) .. Risk identification techniques .. strategy.

5 Breakdown structure .. categories .. risk-identificationtechniques ..9iiiRICS guidance Qualitative risk assessment and opportunity analysis .. response .. risks for Management actions .. Risk ownership v procurement route .. and Contributing data for quantification .. limit Carlo Practical considerations (Level 3: doing/advising).. Advising on appropriate procurementroute .. return risk responsibilities .. quantificationtechniques and advising clientson level of risk allowance.

6 15 Appendix A: Risk terminology .. 19 Appendix B: Example risk 21ivRICS guidance noteManagement of riskRICS professional guidanceInternational standardsRICS is at the forefront of developing internationalstandards, working in coalitions with organisations aroundthe world, acting in the public interest to raise standardsand increase transparency within markets. InternationalProperty Measurement Standards (IPMS ),International construction Measurement Standards (ICMS),International Ethics Standards (IES) and others will bepublished and will be mandatory for rics members.

7 Thisguidance note links directly to these standards andunderpins them. rics members are advised to makethemselves aware of the international standards ( ) and the overarching principles with whichthis guidance note complies. Members of rics areuniquely placed in the market by being trained, qualifiedand regulated by working to international standards andcomplying with this guidance guidance notesThis is a guidance note. Where recommendations aremade for specific professional tasks, these are intended torepresent best practice , recommendations that in theopinion of rics meet a high standard of members are not required to follow therecommendations contained in the guidance note, theyshould take into account the following an allegation of professional negligence is madeagainst a surveyor.

8 A court or tribunal may take account ofthe contents of any relevant guidance notes published byRICS in deciding whether or not the member acted withreasonable the opinion of rics , a member conforming to thepractices recommended in this guidance note should haveat least a partial defence to an allegation of negligence ifthey have followed those practices. However, membershave the responsibility of deciding when it is inappropriateto follow the is for each member to decide on the appropriateprocedure to follow in any professional task.

9 However,where members do not comply with the practicerecommended in this guidance note, they should do soonly for good reason. In the event of a legal dispute, acourt or tribunal may require them to explain why theydecided not to adopt the recommended , if members have not followed this guidance , and theiractions are questioned in an rics disciplinary case, theywill be asked to explain the actions they did take and thismay be taken into account by the some cases there may be existing national standardswhich may take precedence over this guidance standards can be defined as professionalstandards that are either prescribed in law or federal/locallegislation, or developed in collaboration with other addition.

10 guidance notes are relevant to professionalcompetence in that each member should be up-to-dateand have knowledge of guidance notes within a reasonabletime of their coming into guidance note is believed to reflect case law andlegislation applicable at its date of publication. It is themember s responsibility to establish if any changes in caselaw or legislation after the publication date have an impacton the guidance or information in this 25 September 2015 rics guidance status definedRICS produces a range of professional guidance andstandards documents.