The Report That Guaranteed a Result
Your three-investigator firm hired a field interviewer twelve days ago. His employee registration application has not been filed - "we'll send it when things slow down" - and he has already conducted six interviews. The firm carries a $1 million commercial general liability policy that excludes invasion of privacy and has no professional liability coverage. A commercial landlord client wants a report stating plainly that a tenant is running an illegal sublet operation and insists it include the sentence "The tenant is committing fraud." You have three photographs, two interviews, and the lease clause. The tenant's attorney has sent a preservation letter. The client also asks to be billed for 22 hours when your log shows 16.
1. Address the unfiled registration first: what is the exposure, and what does the firm do today?
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The exposure is not clerical. Regulated investigative work performed by an unregistered employee is a licensing violation that attaches to the employee and to the licensed firm that sent him out. Six interviews is a documented track record of unregistered activity - including whatever he said and did in those interviews, which now cannot be defended on the ground that he was properly credentialed. Adding a witness, a complaint, or a hearing to that record converts a filing delay into a disciplinary matter.
Today:
- Pull him off any regulated field activity until the registration is on file and confirmed.
- Submit the application now, with the correct hire date, and keep the submission receipt.
- Audit the other two investigators the same day - this is rarely a one-person problem.
- Reconstruct the six interviews: who, when, what was said, whether any report went out under an unregistered employee's work. Notify counsel and let them decide about disclosure to the client.
- Build a hiring checklist that makes registration a condition of the first field assignment, with a named person accountable.
Honest framing for the file: the firm did not have a paperwork problem, it had a supervision problem that produced paperwork.
2. Draft the substance of the report. What goes in, what stays out, and how do you handle the client's demanded sentence and the preservation letter?
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What goes in: a factual, source-attributed account - dates, times, locations, weather and lighting where relevant, who was present, what was seen, verbatim quotes in quotation marks, and which document (lease clause, by section) supports which observation. Photographs referenced by number with capture times and a statement of how they were obtained.
What stays out: "The tenant is committing fraud." Fraud is a legal conclusion, and it is not supported by three photographs, two interviews, and a lease clause. Writing it converts your report into an allegation you cannot defend and hands the tenant's attorney a defamation theory.
How to write the sentence's legitimate content: describe observations, then state the limits. For example: "On [date] at [time] I observed four unrelated individuals enter and remain in the unit over a six-hour period; two stated they pay weekly. This is consistent with occupancy inconsistent with Section 7 of the lease. I cannot determine from these observations alone whether the tenant has assigned or sublet the premises, or the tenant's intent."
Preservation letter: suspend deletion immediately. Preserve notes, drafts, raw photo and video files with metadata, interview recordings, and communications. Confirm compliance in writing to the tenant's attorney and to your client, and put a litigation hold on the file. Do not "clean up" notes.
Deliver: facts and limitations, with opinion clearly labeled as opinion and the basis stated.
3. The client asks you to bill 22 hours instead of the 16 you logged. Separately, evaluate the insurance position. How do you respond to both?
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Billing: decline, plainly and in writing. Inflating hours on an invoice is a misrepresentation to a client in a matter that is already in litigation, and the invoice will be discoverable alongside your time records. The correct response is a corrected invoice with line-item detail for the 16 hours, plus a short explanation of why the estimate ran long - interviews that took longer than projected, a second site visit - and a revised estimate going forward. If the client insists, that is a reason to end the engagement, not a reason to invoice.
Insurance: the current coverage leaves the firm exposed on its highest-frequency claim type.
- CGL excludes invasion of privacy and generally responds to bodily injury and property damage, not to professional services. Surveillance, background work, and reporting generate privacy, defamation, and negligent-investigation claims.
- Get professional liability (E&O) with privacy and personal-injury coverage, and confirm it covers investigative services, subpoena and deposition defense, and both the firm and its registered employees.
- Review client contracts for indemnification language that pushes the client's decisions (terminations, publications, use of the report beyond its purpose) back onto the client.
- Document retention: adopt a written schedule and a litigation-hold procedure, because the preservation letter just made deletion a liability.
Both questions are the same question: whether the file will hold up when someone other than the client reads it.