Article Contaminated Land Loss Prevention

Asbestos PII Update

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The subject of asbestos cover is one that has been in the spotlight for many years since the restriction (and in some cases the complete withdrawal) of professional indemnity insurance (PII) cover for asbestos risks in 2002/03.

Wider cover is now available in the PII market to those consultancy firms that might inadvertently come across asbestos in the normal course of their activities, although it will not usually be offered to those firms undertaking asbestos inspections.

In the past, cover has generally only been available for negligence claims in respect of the direct cost of remediation or diminution in value of property due to the presence of asbestos. Any indirect costs, such as consequential delay costs, would have been excluded. With a few exceptions, cover can now be obtained for any asbestos related negligence claims regardless of whether the loss in question relates directly to remediation or diminution in value, and cover will therefore extend to cover economic and consequential losses. The exceptions relate to bodily injury claims and claims relating to property located outside the United Kingdom (including the Channel Islands or the Isle of Man) and the Republic of Ireland, which continue to be generally excluded.

Those firms undertaking ‘management’ and ‘refurbishment or demolition’ surveys as described in the Health and Safety Executive guide HSG264 (previously known as type I, II or III asbestos surveys) or similar surveys are unlikely to qualify for the wider cover and will need to negotiate specific cover with their insurers or approach a specialist provider. Consultants with UKAS accreditation should note that UKAS requires Accredited Bodies to carry asbestos cover for bodily injury claims and this is available to such bodies via specialist markets. If you require assistance with this, then please do not hesitate to contact Griffiths & Armour using the contact details below.

For those consultants who may appoint sub-consultants to undertake asbestos inspections on their behalf it is worth remembering that, in the eyes of the law, you are fully responsible for their actions and any claim that arises from work they may have undertaken is likely to expose the consultant’s PII policy in the first instance. If you are appointing third parties to undertake asbestos inspections then you should check the terms of your PII policy to ensure that you are adequately protected.

The scope of cover provided under PII policies can vary considerably and if you are in any doubt about the extent of asbestos cover under your own PII policy you should consult with your broker for further advice.

Griffiths & Armour Professional Risks
0151 600 2071

Report Loss Prevention

Loss Prevention Working Group Report

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Hugh Mallett, Chairman LPWG writes:

The group is drafting articles and guidance on a number of issues that are important to AGS members, see below for the list of our ongoing work programme and soon to be available guidance.


The LPWG met once since the November Committee meeting – 22nd Jan 2015. No calls have been made to the Legal or Chemical Helplines since the last LPWG meeting.

A Griffiths & Armour publication on claims “Professional Indemnity Insurance: Lessons to be learnt” is to be made available to AGS members via the new website

LPWG generally agrees with putting some documents behind a paywall on the new AGS website. There is also support for a knowledge hub (e-learning) that could be considered as a future initiative for students.

Loss Prevention Alerts (LPAs) are still in high demand for downloading [20 LPAs downloaded >100 times between Oct and Jan].

New member has joined the  group, Nora Fung – Arup legal.

Recently Published


  1. Elvanite Vs Amec- Limitations of Liability
  2. BGS – Deposition of Data


LPA 58 – Risks associated with as built drawings.
LPA 59 – The Consequences of Damage to Underground Services LPA 60 – What is meant by Supervision?

Work in Progress

  • LPAs
  • Summaries for the web site being reviewed and edited for accuracy.
  • Permission is being sought for publication of LPA 09 [Mott MacDonald case] online.
  • Contractors seeking contractual indemnities from their Sub Contractors. Ready for publication

Net Contribution Clauses: Newsletter article prepared. Authorisation to publish being sought from Griffiths & Armour.

Document on Ground Investigation Reporting (GIR/ GDR): Initial redraft prepared by J Strange – subject to further review/ comment. Now held to be consistent with revised BS5930.

Asbestos & deleterious materials: Newsletter article to be prepared [may also pick up discussion at Members Day]. Article on insurance cover re asbestos last published in 2011 to be re-published.

Collateral Warranties: Griffiths & Armour being approached to allow their Collateral Warranties – Basic Guide to be made available to AGS members. If permission is granted a short article highlighting its availability to be prepared for the Newsletter.

Expert Advisor and Expert Witness: Newsletter article being prepared. 1 of 2

Copyright Paper on copyright issues: drafted [advice to Members on copyright and on issues arising from use of reports and drawings in planning process].

PI Insurance for Contaminated Land: NEC3 contract requires insurance terms to be on an each and every claim basis. Aggregate cover only available for contaminated land (and asbestos and radioactivity). A newsletter article is being drafted.

Guide to report writing: Newsletter article drafted to advertise the guidance to AGS Members. The Guide itself was up-dated, but never published. Up-dated version to be retrieved, put on the web site and publicised in Newsletter.

Limitation period and defects liability: Article being drafted

Confidentiality and Intellectual Property Rights: issues for Staff on Secondment Loss Prevention Guidance drafted to address some of the issues arising from secondment of staff.

Signing contracts under duress: Newsletter article being prepared.

Client Guide: What Institutions, Trade Associations or other organisations might a Client expect a Geotechnical/Geoenvironmental Company and their employees to belong to? Paper in preparation.

Piling Damage to Live Railway Tunnel. Paper in preparation.


Article Business Practice Contaminated Land Data Management Executive

AGS Response to Nigel Griffiths, MP

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On his appointment as Minister for Construction, Nigel Griffiths wrote to all trade associations and professional bodies and invited them to submit a concise briefing note on the issues which Members feel are vital to making Britain world leaders in construction. He indicated that he expected the note to raise our main concerns.

After discussion in the Working Group and the Executive Committee, the following response was sent on behalf of the AGS:

Making Britain World Leaders in Construction

The Association of Geotechnical and Geoenvironmental Specialists (AGS) is a trade association representing almost 100 companies who are specialists in ground engineering. Activities range from geotechnical engineering, ground investigation, and the design of foundations, to the geotechnical and chemical analysis of soil, rock and water and the identification, assessment and remediation of contaminated land.

In responding to the invitation from Nigel Griffiths MP for a concise briefing note, we have concentrated on issues on which our Members specialise and which are within the field of Government influence.

Additionally, the AGS as a Member of the Ground Forum, fully supports the comments made by Ground Forum, particularly in respect of, i) the need for greater funding of post graduate courses in geotechnical engineering and engineering geology; and ii) the need for clarity (possibly via a register) in defining areas of engineering expertise in order that clients can identify specialists with appropriate qualifications and experience for their projects.

1. Inadequate Ground Investigation 

The amount spent on investigation of the ground prior to construction is typically 1% to 5% of the whole project value (usually the lower end of this range). The cost of claims and additional expenses due to unexpected ground conditions (i.e. unexpected because the site investigation was not adequate) can be as high as 50% of the total cost overrun on the project. Furthermore, some (generally smaller) developments do not have any ground investigation at all. We believe very strongly, that an adequate ground investigation should be a requirement of the planning process. We understand that consideration is being given to harmonising building and planning regulations. This therefore presents an ideal opportunity to introduce such a requirement. We therefore propose that the Minister actively supports and promotes the introduction of such a requirement into the harmonised regime.

2. Insurance 

The current difficulties in the availability and cost of Employers Liability and Public Liability insurance have affected AGS Members, as other businesses. However, the major concern has been the soaring cost of Professional Indemnity insurance. This is compounded by the continuing trend for clients (including public sector clients) to require higher and higher levels of insurance cover with high/ unlimited limits of liability, often totally disproportionate to the value of the fees involved. This is particularly the case in regard to work involving contaminated land. It is a common misconception in many client organisations that a consultant’s Professional Indemnity policy is there to cover any loss incurred by the client, however such a loss occurs. This is of course, not the case. A consultant’s Professional Indemnity in there to protect the consultant in the event of a successful claim of negligence. All consultants in the AGS have signed up to our own Code of Conduct which is designed to ensure the potential for negligent act or omission is minimised. In addition, most companies have their own Quality Assurance system (many accredited through the British Standards Institute to relevant international standards, e.g. ISO14001). It is also a fact that to date the number of successful claims specific to our industry is very low.

It is therefore unfairly onerous on the industry for clients to require levels of Professional Indemnity cover and limitations of liability which are often out of all proportion to the fee charged for the services offered by our members (e.g. a liability level of £5m is commonly required for a project with a consultancy fee of less than £2,000). Such a requirement is particularly disadvantageous to small companies who are simply unable to obtain such cover, and are therefore excluded from contracts even when they have appropriate expertise and/ or relevant local knowledge.

Government and other public sector clients could helpfully demonstrate best practice in this respect by entering into such contracts with appropriate requirements for insurance (both level of cover and limit of liability) which reflect inter alia the fee for the project.

3. Onerous terms in Regional Development Agencies (RDAs) contracts

Members work for RDAs in connection with the assessment and remediation of contaminated land. The standard RDA contract terms require the consultant / contractor to provide a collateral warranty with unlimited liability for anyone using the site in the future, and to ensure that the site is ‘fit for purpose’ This is unreasonable on two counts:-

i) Neither unlimited indemnity nor ‘fitness for purpose’ can be covered by insurance . In the event of a successful claim therefore, the only recourse for the company will be to close down and surrender all their assets. This is a totally unacceptable way to enter into a contract.

ii) Contaminated land can be cleaned to a variety of standards, (e.g. the standard required for a factory car park is lower than that required for housing). It is not reasonable to expect the consultant /contractor, working to a specification (given by the RDA client) to warrant that the site will be suitable for all purposes and all users in the future – which is the legal implication of these terms. The normal standard is to warrant that the work has been carried out with due care and diligence.

RDAs (or their legal advisers) argue that their public duty requires these contract terms and that they will be held to account should a problem arise and the consultant/contractor is found to have limited liability. In reality, they are limiting their selection of consultants and contractors to the small number of concerns who are prepared, for what ever reason, to take the unreasonable risks that these contract terms represent. Furthermore, in pursuing this policy RDAs are endangering the Government’s targets for the redevelopment of brownfield land.

The Minister could usefully explore this matter with RDAs to ensure that an appropriate balance is obtained between the need to demonstrate appropriate accountability for public monies with the necessity of redeveloping brownfield land.

4. Environment Agency

Notwithstanding liaising with Environment Agency officials in our Committee and Working Group, in day to day, site specific activities, our members invariably find interaction with the Environment Agency extremely frustrating for a number of reasons:-

i) There is no consistency between local offices. Although the specialists in the EA issue guidance (generally after public consultation), there is no onus on local offices to follow the guidance. Consequently each office (and each officer within that office) follows their own understanding of how to implement the policy/guidance. Consequently a development which would be permitted in one area, in another faces undue, excessive costs, delays and may eventually be refused permission.

ii) There appears to be no way of appealing against a decision made by a local office even when higher officials acknowledge that the decision is wrong. The process of appeal is very unclear and local offices appear to have unchallengeable autonomy.

iii) Guidance essential to the development of brownfield land is delayed – often for years. For instance, only a very small number of soil guideline values (that specify the permissible amount of certain toxic chemicals in soil) have been issued. Chemicals not covered by SGV’s must be assessed in some other (unspecified) way. The EA has the right to reject the conclusion of the consultant if officials do not agree with the methodology. The local authority regulator is therefore in an impossible situation when trying to assess proposals for brownfield land redevelopment (particularly for housing schemes). The recent disbandment of the National Centre will exacerbate this problem.

iv) EA policy leads to uncertainty. Developers expect their consultants to be able to advise on the measures which must be taken in order to obtain planning permission. Because of the uncertainties (above), consultants cannot be confident in their advice. However, if the consultant’s advice turns out to be unacceptable to the EA (resulting in additional costs and delays) the client may try to recover costs from the consultant’s insurance – putting further pressure on insurance requirements and the viability of consultants businesses. (See Item 2).

Action, direction and resources to rectify these problems at the Environment Agency need to come from Government. The Environment Agency is not currently fulfilling its stated functions with an appropriate balance. Unless improved guidance, consistency and expertise is forthcoming from the Environment Agency, the Government targets for the remediation and redevelopment of brownfield sites will be seriously jeopardised.

5. Waste Management Licensing 

It is becoming increasingly clear that regeneration projects on brownfield sites are being frustrated by Waste Management Legislation and the Environment Agency’s approach to its implementation. The crux of the problem is the recent move by the Environment Agency to interpret the definition of waste more restrictively. The result is that a considerable number of practices on site that were not previously considered necessary to regulate now fall within waste management legislation. The consequence of this is as follows:

i) The requirement for / presence of a Waste Management License (WML) on a development site will severely inhibit redevelopment potential of many sites. This is particularly the case for re-development of large sites where phased development is the only way to make the redevelopment process financially viable. The presence of an active WML on a housing development would effectively prevent sale of homes during the development programme.

(ii) Property Blight: New houses built on ‘licensed’ land are often seen as being built on the equivalent of ‘Waste Tips’ resulting in loss of value. A recent RICS report suggests the negative effect on property prices can be as much as 40%

(iii) Loss of potential for re-use of site derived soils: The reluctance of construction companies to operate waste management licenses will result in materials defined as waste being removed to landfill rather than being re-used as secondary aggregates (and the consequent need to import virgin aggregates from quarries and pits, entailing haulage and other environmental impacts of quarrying).

DEFRA and ODPM are developing the option of a Single Regeneration Permit to overcome the problems highlighted above. In reality however, the government is progressing inappropriate and increasingly restrictive legislation in isolation of the legitimate needs of the construction industry. It is important to note that other European countries are not interpreting the legislation in the same way and are not imposing similar constraints on their construction industries. This restrictive approach will jeopardise the achievement of the Government’s target of 60% of new homes on brownfield sites. Government is therefore urged to address this matter will all interested parties and in particular the Environment Agency.