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Brownfield risks alarm consultants

NEWS

TOP ENVIRONMENTAL engineering consultants are refusing to compete for work from two of the UK's largest brownfield clients because of the potentially devastating risk burden being forced on them.

The consultants are concerned that clients such as BG plc, responsible for property formerly owned by British Gas, and national development agency English Partnerships require all ground remediation work to be guaranteed by unlimited warranty and unlimited collateral liability.

This effectively means consultants are liable not only to the client but also to third parties investing in the site after any contamination has been removed or geo-engineering carried out.

International division risk manager for consultant Dames & Moore Alwyn Callender said: 'British Gas provides terms that most consultants feel are pretty onerous. Environmental consultants can't give guarantees that every inch of a site is contamination-free.'

The vulnerability of consultants was highlighted earlier this year by English Partnerships' £14M court room victory against Mott MacDonald. The consultant was hired to advise on remediation of heavily contaminated land at the former naval dockyard in Chatham, Kent.

It was sued after using recognised contamination tolerances rather than specifying to the 'squeaky clean' standards anticipated by English Partnerships.

Pressure from cautious investors and insurers means BG also normally demands total clean-up, said Callender. On heavily contaminated sites with a complex history, this is difficult and hugely expensive to achieve, he added.

Should contaminants subsequently be found, unlimited warranty and unlimited liability would give owners and occupiers recourse to the consultant, he said, perhaps years after work has finished.

A spokesman for BG said the company was aware that some consultants would not work under existing conditions. However, he added BG was a 'very cautious' organisation. 'We have to ensure the correct safeguards are in place,' he said.

But Mott MacDonald director of environment and water resources Peter Smith warned consultants could become locked into long-term liability, often after completing low value contracts such as surveys and site investigations. Risk relative to financial reward made tendering dangerous, he said.

Smith also claimed that BG's practice of dividing work into individually tendered packages offered these firms no security of winning higher value work.

The Association of Consulting Engineers is concerned about the conditions set under such contracts. But it failed to negotiate better terms when consultants first brought the problem to its attention four years ago. ACE director of legal affairs Frances Paterson said that it was now in further talks with English Partnerships to try to encourage risk sharing.

At present, she said, the amount of risk that consultants are being forced to carry means insurers now demand massive premiums for cover. Current rules used in professional indemnity liability are preferred with perhaps bespoke insurance, tailored to the specific characteristics of each site.

English Partnerships was unavailable for comment.

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