RISK MANAGEMENT ISSUES AND CONTRACTUAL OBLIGATIONS Curt Sumner, LS Executive 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 MAGAZINE OCTOBER 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

WHY MANAGE RISK? 3 INCREASE PROFITABILITY 3 IMPROVE BUSINESS RELATIONSHIPS 3 SATISFY CLIENT EXPECTATIONS 3 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