The Due Diligence Defence Against Personal Liability for Consultants

The mining and exploration industry is governed both directly and indirectly by a complex and constantly changing regulatory and legal system, yet few technical professionals realise the extent to.which they are affected and that they are personally liable for any breaches. These breaches may result in criminal or civil prosecution that could involve significant financial penalties (to the extent that all personal assets are at risk) and even imprisonment. Generally, a professional at risk should be able to mount a due diligence defence in order to avoid or mitigate these consequences. Mineral property and company owners, directors, managers and employees are at risk, as are consultants, contractors and suppliers of equipment or consumables. Whilst all are liable for their personal decisions to act (or failure to act) in managing operations or carrying out directions, as well as for the actions of others under their control, the focus here will be on the exposure of the consultant. Consultants are usually driven by an internal desire to perform to a high standard because of personal pride in their work and concern for their professional reputation. However, there are an increasing number of external requirements for them to be able to demonstrate, if necessary, that their actions were based upon reasonable grounds and that their work conformed to current best practice standards. If they cannot do so, they may face potential personal Liability.