NEW CASE HISTORY Missed Historic Pipeline, Third Party Reliance, and New Employee Cost Member-Firm $800,000.

The GBA-Member Firm was retained by Client 1 to conduct a Phase I ESA on a 1000-acre tract of undeveloped land prior to the property sale.  To save money, the client did not want the title information to be purchased from a third-party and instead told the Member Firm that they would provide title information for review.

As it turned out, the client never provided the promised chain-of-title information that  would have contained important historical information about pipeline easements.

Lessons Learned:  This case history teaches six important lessons:

• It’s risky to work for both the seller and buyer of real estate.
• Inappropriate verbal communications can increase risk of liability.
• When the client agrees to provide important project information, make sure you receive it. And if you don’t, report it.
• Understand what scope is minimally acceptable to meet the project objectives.
• Check if your firm has done a previous study on or in the vicinity of a new project site.
• Make appropriate staff assignments

Comments of the GBA Member

The experience with this project caused the firm to rethink our approach for environmental assessment and remediation project opportunities.  Out of bad came good as we implemented important changes in the following areas:

• Documentation: When critical project information is not provided by the client, we document in writing our attempts to obtain the information, the fact that the information was not received and the related risk implications.
• Third Party Reliance and Follow-on Work Requests: We developed a system to address requests for reliance and related follow-on work from third parties. The system includes a process for evaluating the quality and nature of our prior work at the subject site.  The process also includes an assessment of the risk in granting reliance and accepting work from third parties as well as ways to mitigate risk if such reliance and additional work are accepted.
• New Hires: More emphasis has been placed on assuring that new hires are properly trained and oriented to the firm’s procedures, policies, and expectations. We make sure they have appropriate supervision in their early assignments and are not placed alone on projects with a client interface early in their tenure.

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