RISK MANAGEMENT ISSUES AND CONTRACTUAL OBLIGATIONS

Curt Sumner, LSExecutive Director, ACSM

COMMUNICATING FEELINGS AND ATTITUDES

Others receive your communications in the following ways:

7% by the WORDS you say

38% by the TONE OF VOICE you use

55% by your NONVERBAL messages

STATISTICS FROM RESEARCH BY DR. ALBERT MEHRABIAN, UCLA, PRINTED IN SELLING POWER MAGAZINEOCTOBER 2004 ISSUE

Barriers to Communication

Poor Listening Habits Personality Differences Improper Use of Language Invalid Assumptions Lack of Initiative Lack of Awareness Weak Verbal Skills

Poor Communications Lead to Unmet Expectations

Improper assumption of what is expected

Impatience Attitude

SCOPE of SERVICES

67% of CLAIMS AGAINST SURVEYORS ARE BROUGHT by the PROJECT OWNER

COMMON SOURCE OF CLAIMS… UNMET

EXPECTATIONS

Claimant ID, Surveyors, 1990-2000

General Contractor

18%

Project Owner67%

Surety0%

BI/ Non-Worker1%

Insurance Company

0%

Third Party PD11%

SubContractor2%

BI/ Worker1%

WHY MANAGE RISK?

INCREASE PROFITABILITY IMPROVE BUSINESS

RELATIONSHIPS SATISFY CLIENT

EXPECTATIONS AVOID DISPUTES

LOSSES INSURED AND UNINSURED

LOST PRODUCTIVITY ADVERSARIAL RELATIONSHIPS DAMAGE to REPUTATION

CLAIMS AND DISPUTES CAUSE...

WHAT IS LIABILITY?

FOUR ELEMENTS ARE REQUIRED TO PROVE LEGAL LIABILITY: DUTY

LEGALLY SANCTIONED OBLIGATION BREACH CAUSATION DAMAGES

SOURCES of DUTY

COMMON LAW JUDGE MADE LAW

PROFESSIONAL STANDARD of CARE

STATUTORY LAW CREATED by the LEGISLATIVE BODY

STATE LICENSING REQUIREMENTS CODES and REGULATIONS

CONTRACT LAW WHAT the PARTIES AGREE TO

CONTRACT ESSENTIALS

“YOU GET WHAT YOU NEGOTIATE -- NOT WHAT YOU

DESERVE”

CONTRACT ESSENTIALS

FOUR ESSENTIAL ELEMENTS...1. Assign Responsibility to the Party in the

Best Position to Carry it Out.2. Assign Responsibility with the

Authority to Fulfill It. 3. Assign Each Responsibility to Only One

Party.4. Create Reasonable and Realistic

Expectations.

RISK MANAGEMENT MODEL

REQUIREMENTS (PROGRAM)

•INPUTS: CONSTRAINTS (BUDGET, SCHEDULE, ETC.)

CONTEXT (LEGAL, ECONOMIC, ETC.)

PHASE 2

RISK RESPONSE

PHASE 3

RISK CONTROL

PHASE 1

RISK ANALYSIS

OUTCOME

• IDENTIFICATION• ASSESSMENT

•PROBABILITY•SEVERITY

• AVOID• RETAIN & MITIGATE• TRANSFER

•INSURANCE•CONTRACT

• PLAN IMPLEMENTATION• MONITORING/MITIGATION

• DISPUTE/CLAIMS MANAGEMENT

ALTA/ACSM SURVEYS as a RISK MANAGEMENT TOOL

Define Responsibilities of Parties

Establish Scope

Set Expectations

Establish Standard of Care

OTHER CONTRACTUAL ISSUES

CERTIFICATIONS DISPUTE AVOIDANCE/DISPUTE RESOLUTION TRANSFER OF ELECTRONIC INFORMATION ENVIRONMENTAL HAZARDS INDEMNIFICATION INSURANCE REQUIREMENTS STANDARD OF CARE

CONCLUSIONS

RISK MANAGEMENT TOOLS CAN HELP SURVEYORS MANAGE and AVOID CLAIMS

ALTA SURVEYS HELP MANAGE RISK by ESTABLISHING REASONABLE STANDARDS and SCOPE of SERVICES

CONTRACTS CAN EXPAND DUTIES ESTABLISHED UNDER COMMON and LEGISLATIVE LAW