RISK MANAGEMENT ISSUES AND CONTRACTUAL OBLIGATIONS

1
RISK MANAGEMENT ISSUES AND CONTRACTUAL OBLIGATIONS

• Curt Sumner, LS
• Executive Director, ACSM

2

• 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 MAGAZINE
• OCTOBER 2004 ISSUE

3
Barriers to Communication

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

4
Poor Communications Lead to Unmet Expectations

• Improper assumption of what is expected
• Impatience
• Attitude

5
SCOPE of SERVICES

• 67 of CLAIMS AGAINST SURVEYORS ARE BROUGHT by
  the PROJECT OWNER
• COMMON SOURCE OF CLAIMS
• UNMET EXPECTATIONS

6
WHY MANAGE RISK?

• INCREASE PROFITABILITY
• IMPROVE BUSINESS RELATIONSHIPS
• SATISFY CLIENT EXPECTATIONS
• AVOID DISPUTES

7

CLAIMS AND DISPUTES CAUSE...

• LOSSES
• INSURED AND UNINSURED
• LOST PRODUCTIVITY
• ADVERSARIAL RELATIONSHIPS
• DAMAGE to REPUTATION

8
WHAT IS LIABILITY?

• FOUR ELEMENTS ARE REQUIRED TO PROVE LEGAL
  LIABILITY
• DUTY
• LEGALLY SANCTIONED OBLIGATION
• BREACH
• CAUSATION
• DAMAGES

9
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

10
CONTRACT ESSENTIALS

• YOU GET WHAT YOU NEGOTIATE -- NOT WHAT YOU
  DESERVE

11
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.

12
RISK MANAGEMENT MODEL
13
ALTA/ACSM SURVEYS as a RISK MANAGEMENT TOOL
Define Responsibilities of Parties Establish
Scope Set Expectations Establish Standard of
Care
14
OTHER CONTRACTUAL ISSUES

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

15
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