As both an environmental consultant and as a bank director, I review many Phase I and Phase II environmental site assessment reports. In recent years, some environmental consultants include phrases such as “this Phase I ESA was conducted in general accordance with the guidelines of ASTM E 1527 and AAI.” I interpret this in two ways: “we followed ASTM standards, but please recognize that we aren’t perfect,” or “we cut corners.”
I use a checklist to compare Phase I ESA reports of a competitor against the ASTM E 1527 Standards. I find that firms conducting ESAs in “general accordance” with ASTM’s standards only complete about 60 to 80 percent of ASTM’s required work. This suggests to me that these environmental consultants intentionally cut corners to lower costs, and become price competitive.
In another post, “What is the Standard of Care for Environmental Consultants,” I discuss the standard of care expected of environmental consultants. This post focuses on my thoughts about how much protection an environmental consultant gets from potential “breach of contract” and “negligent representation” lawsuits by inserting an “in general conformance” phrase in its contracts and reports?
How does a “Completed in General Accordance” Clause Change the Standard of Care?
I suspect that environmental consulting firms insert the “completed in general accordance with” clause with the hope they can avoid liability when they deviate from ASTM Standard E 1527. In truth, no matter how much environmental consultants try to interpret and strictly follow ASTM’s standards, nearly all consultants both knowingly and inadvertently deviate from the Standard. Accordingly, every Phase I ESA is completed in general accordance with the ASTM standard. The committee that wrote the Standard even anticipated this, and included a “Deviations” section in the Standard’s recommended Phase I report format.
Some environmental consulting firms might think that the “completed in general accordance” clause sufficiently alerts clients that they will deviate from the ASTM Standard. Where an ambiguity exists in a contract, a court is most likely to construe the clause in a way that is least favorable to the party that drafted the contract:
“In choosing among the reasonable meanings of a promise or agreement or a term thereof, that meaning is generally preferred which operates against the party who supplies the words or from whom a writing otherwise proceeds.” Restatement (Second) of Contracts, §206
The question therefore should not be “whether” an ESA was completed in general accordance with ASTM E 1527, but “how closely” it was.
Will the Court Look at the Whole Report in Assessing an Environmental Consultant’s Conformity with ASTM E 1527?
For malpractice claims, courts might look at the “totality of the circumstances.” If a sample of reports prepared by other consultants in the area show that 90 percent of the E 1527 elements are commonly completed, this arguably could be the standard of care. If the defendant’s work fully complied with more than 90 percent of the E 1527 elements, they might successfully argue that they conformed to the professional standard of care.
For obvious reasons, lawyers focus on a consultant’s defective work when litigating malpractice cases, and don’t spend much time asking about the tasks the environmental consultant completed correctly. If the “injury” was caused by a failure to complete a particular task (e.g. obtaining and reviewing all of the available aerial photographs), and 90 percent of the other consultants complete that task, the consultant might be liable regardless of how many other ASTM-required tasks it completed, or whether the overall quality of its work was better than its competitor’s work. In essence, a task-specific standard of care might be used by the court.
In the environmental malpractice cases of Watco v Pickering Environmental Consultants, 2007 WL 1610093, and Newsmall Clemson v Earth Management Systems (unpublished opinion of South Caroline Ct. of Appeals, opinion 2008-UP-430) each court compared the defendant’s work with the four main elements in the ASTM Standards: records review, site reconnaissance, interviews, and preparation of the report.
How Can a Local Standard of Care for Environmental Consultants be Established?
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What’s the Bottom Line?
ASTM Standard E 1527 is the current benchmark that environmental consultants follow in completing ESAs, and accordingly it sets a national standard of care. Full compliance with the standard with no deviations is difficult, thus nearly all Phase I ESAs are completed in general accordance with this standard.
Pricing in the Phase I ESA “industry” is very competitive. To compete, some firms are cutting costs by intentionally not doing some of the research and reporting required by the ASTM standard, and appear to want to avoid malpractice lawsuits with a clause stating their work is competed “in general conformance with ASTM Standard E 1527.” This probably provides little protection from liability.
To minimize exposure to liability, environmental consulting firms have three choices:
- Strive to fully conform to the ASTM standards.
- In contracts to conduct Phase I ESAs, clearly identify what ASTM tasks will be excluded, and how the deviation from the E 1527 standard might affect your ability to identify RECs. PLUS, the Phase I report needs to clearly identify the deviations from the Standard, and how those deviations might have affected the accuracy of the report’s conclusions.
- Insert a clause in the contract that sets your standard of care as that of the “bottom 10 percent of environmental consultants,” and hope your attorney can show you exceeded this standard if you’re sued. (Just kidding.)
Other Resources:
“What is the Standard of Care for Environmental Consultants,”