Guest Post: GZA’s Ernest Hanna Provides an Update on Reliance Letters

ACEC News

May 14, 2019

Guest Post: GZA’s Ernest Hanna Provides an Update on Reliance Letters

The GeoProfessional Coalition focused on “Reliance Letters” at its roundtable meeting during the 2019 ACEC Annual Convention and Legislative Session in Washington, D.C. last week. 

Reliance letters are a common request in the Phase I Environmental Site Assessment work environment and are becoming more common for geotechnical projects. 

Based on this discussion, the GeoProfessional Coalition will be putting together a “model letter” or “template” for a reliance letter as it pertains to geotechnical work.

There are already some resources in the market. The Regional Municipality of York in Ontario Canada has a template document, the Association of Geotechnical and GeoEnvironmental Specialists in the United Kingdom has a loss prevention alert focused on reliance letters, and the Geoprofessional Business Association publishes The ASFE Guide to Third-Party Reliance. 

A reliance letter for geotechnical work should be avoided if possible.  If that is not possible, a reliance letter should include, at a minimum, a description of the report that is to be relied upon, the reason for the reliance, a statement that the author exercised reasonable skill and care in preparation of the report, details of the original work assignment agreement, limitations to liability and use of the report, and the ability of the recipient of the reliance letter to rely on the referenced report. 

As noted in the ASFE Guide, the liabilities associated with third-party reliance often result from a poor understanding of what “reliance” means, underestimating the consequences of granting reliance, and/or failure to discourage unauthorized third-party reliance.

Reliance is more often provided to owners and lenders and less often–and begrudgingly–to other design professionals and contractors. 

More information on the GeoProfessional Coalition is available here.

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