Loss Prevention Alerts

ALERT 33:  Working on another’s land

This loss prevention alert has been produced by the Loss Prevention Working Group (LPWG) of the AGS. It highlights issues that the LPWG considers may be of relevance to members. It is not intended to provide a definitive response to any issues and before taking action members should consider carefully whether they need to seek independent legal advice.

Most often, geo-specialists conducting intrusive site investigation operations will be working on third party land; i.e. land not owned or occupied by the specialists' direct client. There are a number of different project arrangements which might bring this situation about. A geospecialist might be: 

• acting for a purchaser of either a vendor's land or the shares in a company that the vendor owns; 
  
• acting for a contractor who wants to know certain characteristics of the ground before pricing or programming construction operations; 
  
• acting for a former owner and polluter of a site who is required to conduct remediation pursuant to a remediation notice served under Part IIA; 
  
• assessing land adjacent to his client's, from which it is suspected contaminants are migrating to his client's land; or 
  
• a sub contractor who has a direct contract with a main contractor to work on the main contractor's client's site (although in this situation, very frequently, a contractual relationship will arise between the specialist and the contractor's client by way of a collateral warranty). 

If he/she does work without the permission of the owner then the specialist will commit a trespass. This raises particular issues regarding risk transfer and the need for real care when contracts are being negotiated and assessed. 

The first encouraging point to note is that, in English law, a mere trespass is not a criminal offence. This is contrary to the many signs and notices which are to be seen in and around the UK which state: "Beware. Trespassers will be prosecuted!". Trespass is a tort, and the victim of a trespass is therefore only entitled to tortious remedies. This might be an award of damages (to put the victim in the financial position he would have been had the tort not happened) or, in certain cases, an injunction. 

Ordinarily, the issues of trespass are circumvented by the landowner giving the specialist a licence to be on the land. A licence is nothing more than a permission. A person who has permission to be on land cannot be liable in trespass. Although these licences do not need to be in writing, very often they are. Further, they often contain many more terms than are simply required to bestow permission on the specialist to be on the landowner's land. 

The most important point to note is that often these licences will contain indemnities whereby the specialist indemnifies the landowner against any damage to the landowner's land arising as a result of the work. The landowner's entitlement under such indemnities is very rarely triggered by the specialist's negligence. In other words, even if the consultant causes damage in a non-negligent way the indemnity will still operate. As most specialists' PI policies are triggered only by claims which have negligence as an ingredient, these indemnities therefore bring into play the possibility that the specialist will incur a financial liability which he cannot pass on to his insurers. 

However, a view might be taken that as the landowner is allowing access to his site, he should not be put to the trouble of proving negligence and is entitled to be made whole if it is damaged in any way whatsoever as a result of the specialist's work. In such a case, it is the client who should bear the residual risk of non negligent damage. After all, it is the client who is putting the consultant into a situation where he might damage the landowner's site, and it is the client who benefits from the work being done. In such a situation, it is quite right that a specialist should seek to be indemnified by his client as follows: 

"The client shall indemnify the specialist against any loss, liability (including liability under any indemnity) or expense the specialist suffers as a result of any damage caused to the landowner's land provided that such damage is not caused by any failure of the specialist to use reasonable care, skill and diligence in and about the work being undertaken." 

In many cases, clients will leave it to the specialist and landowner to negotiate the terms of a licence between themselves. Care needs to be taken as, sometimes, the landowner will attempt to insert into the licence provisions compliance of which would put the specialist in breach of an obligation to his client. For example, under some licences, as a condition to giving the specialist permission to work on the site, the licence will require the specialist to provide any factual or interpretative reports to the landowner. This should not be agreed to without the client's express consent. If information is made available to the landowner without the client's knowledge or consent, then the specialist could be sued for breach of confidence. 

Care also needs to be taken to define exactly the work that the specialist will be doing under the licence. For example, if the licence states that the specialist will put down boreholes in order to carry out certain geotechnical tests, and in fact the boreholes are used to test for the presence or concentrations of contaminants in the soil, it might be held that the licence is not effective and so the specialist would be a trespasser. In a particular case involving a trespass, Scrutton J said, "When you invite a person into your house to use the staircase you do not invite him to slide down the banisters". Any activity beyond the scope of that agreed in the licence would involve a trespass. 

It will also be worth including a clause as follows in the licence: 

"The Landowner undertakes to the Specialist to comply with all laws relating to occupational and public health and safety including, without limitation, The Health and Safety at Work, etc Act 1974, the Management of Health and Safety at Work Regulations 1999 and any statutory re-enactments thereof." 

It might seem strange to require an undertaking to comply with obligations it is, as a matter of general regulatory law, required to comply with but in practice this will impose a de facto obligation on the landowner to provide the specialist with information about any special hazards on the site, breach of which will enable the specialist to claim damages. 

While most specialists and the lawyers who advise them are sensitive to the risks arising from appointment documents and collateral warranties often insufficient time is taken when agreeing to standard form licences put forward by a landowner's lawyers. However, care should be taken because these are more than a minor detail of project administration and, like all contracts, can impose obligations which, if not complied with, can result in serious financial liability.

Prepared for the AGS by Steven Francis, Eversheds

Date of Issue: 25 May 2005