Loss Prevention Loss Prevention Alerts

LPA 76 – Reliance on another Company’s Report

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Published March 2023

An AGS member company raised a concern associated with their potential liabilities when using or relying[1] on a report prepared by a third party.

For example; a phase 1 ground engineering desk study report is prepared by Company A.  That report is then provided to Company B to inform their scoping and implementation of a ground investigation (and / or any subsequent risk assessment and identification of remedial action or design).  The concerns raised were:

  • where does liability lie for Company B, having used the information in that third party desk study report, in their planning and implementation of the ground investigation?
  • what are the implications and potential liabilities for Company B if the desk study report is found to be “inadequate” in some way that significantly impacts upon their ground investigation work (and report)?

[1] Having legal “reliance” upon a report essentially means that in the event of incurring a loss from any negligent act or omission in the report you could sue the company who prepared the report to recover that loss.  Being provided with such a report without reliance (i.e. provided for you to use) – gives you the ability to read, ask questions and make decisions based upon what you have read, but the report authors have no duty of care to you, and you have no such right to sue them for any loss.