What do you do when you need to rely upon a consultant’s report, there is no formal appointment in place and you have no right to call for a collateral warranty or request the grant of third party rights?
The answer is to request a reliance letter from the consultant. If correctly entered into, a reliance letter allows the recipient to use, copy and rely on the contents of the required report.
But make sure you have considered and checked the following points:
- It is a contract: The recipient will need to have provided consideration for the letter to be enforceable as a contract. If possible, see if the consultant will execute the letter as a deed to provide for a longer limitation period.
- The date of the reports: When were the reports provided, if this is over six years ago then the reliance letter will need to be executed as a deed. Generally, however, check the dates of the reports to see when any claim on a report may become statute barred.
- The factual details: Check that the client procuring the letter of reliance is the same as that on the report. Check the names of the recipient of the letter and the consultant together with the reference details of the report.
- Right to use, copy and rely: Some reliance letters do not actually allow the recipient to rely on the report but merely to reproduce it. The wording of the letter should be carefully considered to ensure there is express reliance wording and an adequate copyright licence.
- Insurance: Check that the consultant is required to hold and maintain professional indemnity insurance. If a claim is made in relation to the reports, a recipient would want to know that professional indemnity insurance should be held by the consultant.
For more information, email firstname.lastname@example.org.