Due Dilligence Part 2 – Picking the Consultant

24 Jul 2013

You’re not exactly what we’re looking for but….

In my prior post, I discussed the need for proper due diligence.  Today, I will explain how to pick the “environmental professional” who will conduct most of that work.

The federal All Appropriate Inquiry (AAI) Rule describes an “environmental professional” appropriate to conduct the inquiry as “someone who possesses sufficient specific education, training, and experience necessary to exercise professional judgment to develop opinions and conclusions regarding conditions indicative of releases or threatened releases of hazardous substances on, at, in, or to a property, sufficient to meet the objectives and performance factors of the rule.”

Once you’re sure that your environmental professional (for brevity’s sake, I’m going to use the term “consultant”) meets the minimums (listed below), you need to be sure that they will apply your risk tolerance – and understand your goals.  The importance of this step should not be underestimated.  As with any service professional, you need to be comfortable that the consultant will give you the service you expect.

Typically the consultant should be retained by your attorney for at least two reasons: (1) to try and shield the results as privileged; and (2) to ensure that you are properly protected in case the consultant errs.  This last point bears repeating – do not sign anything authorizing the consultant to proceed without consulting an attorney. 

Many consultants’ form contract limit the consultant’s liability in ways which render you effectively at your own risk.  If you sign without the assistance of counsel, you’ve given up all leverage to get favorable terms from the consultant.  These contracts are negotiable and, depending on market forces and your urgency, you may not get the best deal possible, but your lawyer should help prevent you from being at the mercy of a form drafted entirely in the consultant’s favor.

As I often say to consultants, “if you went to a surgeon and they asked you to agree before surgery that you could not sue them no matter how negligent they are, would you go through with it?”  Your attorney should also check to see that the consultant is properly insured.

The Minimums – be sure to ask if your consultant meets these standards. If they don’t – look elsewhere.  The AAI Rule states that the consultant must have:

• A state or tribal issued certification or license (typically a Professional Engineer’s (P.E.) or Professional Geologist’s (P.G.) License) and 3 years of relevant full-time work experience; or

• A Baccalaureate degree or higher in science or engineering and 5 years of relevant full-time work experience; or

• 10 years of relevant full-time work experience.

State- or tribal-licensed or certified individuals also must have the equivalent of 3 years full-time relevant experience to qualify.  Individuals who do not hold a license or certificate may still qualify through educational and experience requirements.


Leave a Comment to “Due Dilligence Part 2 – Picking the Consultant”

  1. SUSAN BLANCHARD 25. Jul, 2013 at 9:24 am #

    Great info that you’re sharing. Thank you!

  2. Arthur Siegal 25. Jul, 2013 at 9:26 am #

    Thank you! Please subscribe and pass our blog on!

  3. Chris Bunbury 25. Jul, 2013 at 9:46 am #

    Our research shows that in excess of 50% of Phase I site assessments are inaccurate. This is partially due to the fact that a Phase I site assessment is a very cursory overview but also to the fact that many environmental engineers have turned the environmental due diligence process into a commodity based transaction. I would add to your comments that you want to hire a qualified engineer that is very familiar with the area in which due diligence is to be performed. Preferably they grew up in the area and remember things about the subject property that do not show up on historical searches, EDR, fire maps…. I find often times the smaller engineering firms located in the community where the subject property is located fit the bill. If you use a large national firm, I suggest they sub out some due diligence to local professionals which will save time and resources and in the end offer a more accurate picture.

  4. Stu Spiegel 25. Jul, 2013 at 1:13 pm #

    Good summary – and this from one of those consultants! Two comments for your clients: (1) Be sure of the experience of the person actually going in the field to do the work, since the person reviewing, evaluating and signing the report must have the Environmental Professional’s qualifications, and (2) we see many instoances of the client try to push all of the risk on the consultant so, as you noted, expect some push-back and negotiation from both sides.

  5. Arthur Siegal 25. Jul, 2013 at 1:29 pm #

    Chris – while I’m not sure of your statistics, you’re right that good questions and local knowledge results in an improved product. More than once I’ve found myself asking a phase I consultant, “what about this issue here” which I knew about but they, not being local did not.

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