Construction Risk

This subject has the following teaching availabilities in 2009:

Objectives:

A student who has successfully completed this subject should:

• Understand the theoretical and practical drivers for risk allocation in construction projects
• Be familiar with the risks that can materialise during the planning, design and construction phases of a project, and how those risks may be allocated to, or assumed by, various participants
• Have a detailed understanding of the law and industry practice relating to insurance and security for performance
• Appreciate the impact that recently introduced proportionate liability schemes have on loss recovery
• Be able to provide meaningful advice about the various options that are available to a range of industry participants in structuring and administering projects in relation to these matters
• Be able to contribute meaningfully to ongoing industry debates about optimal ways of dealing with these matters at a policy level.

Syllabus:

Principal matters to be covered include:

• Identifying risk in a construction project and how various industry participants (including principals, contractors, designers, professional advisers, insurers, security providers, and statutory and government authorities) may bear responsibility in relation to those risks
• Philosophies and commercial drivers affecting risk allocation in construction contracts and consultancy agreements, and how these are reflected in standard forms
• Security for performance mechanisms, including cash retentions, unconditional undertakings, parent guarantees, insurance bonds, adjudication bonds and other instruments
• Insurance products available to the construction industry (including public liability, works insurance, professional indemnity/errors and omissions, workers’ compensation, domestic building, structural defects, transit etc.) and the law relating to them (including regulation by legislation, common law principles and treatment under standard-form construction contracts and consultancy agreements)
• Proportionate liability regimes (including Part IVAA of the Wrongs Act 1958 (Vic)) and their impact upon contract risk allocation.

• Take-home examination (100%) (6–9 November)
  
  or
   
• Research paper 10,000 words (100%) (3 December) (topic approved by the subject coordinator)

This subject is not available as a breadth subject.

Objectives:

A student who has successfully completed this subject should:

• Understand the theoretical and practical drivers for risk allocation in construction projects
• Be familiar with the risks that can materialise during the planning, design and construction phases of a project, and how those risks may be allocated to, or assumed by, various participants
• Have a detailed understanding of the law and industry practice relating to insurance and security for performance
• Appreciate the impact that recently introduced proportionate liability schemes have on loss recovery
• Be able to provide meaningful advice about the various options that are available to a range of industry participants in structuring and administering projects in relation to these matters
• Be able to contribute meaningfully to ongoing industry debates about optimal ways of dealing with these matters at a policy level.

Syllabus:

Principal matters to be covered include:

• Identifying risk in a construction project and how various industry participants (including principals, contractors, designers, professional advisers, insurers, security providers, and statutory and government authorities) may bear responsibility in relation to those risks
• Philosophies and commercial drivers affecting risk allocation in construction contracts and consultancy agreements, and how these are reflected in standard forms
• Security for performance mechanisms, including cash retentions, unconditional undertakings, parent guarantees, insurance bonds, adjudication bonds and other instruments
• Insurance products available to the construction industry (including public liability, works insurance, professional indemnity/errors and omissions, workers’ compensation, domestic building, structural defects, transit etc.) and the law relating to them (including regulation by legislation, common law principles and treatment under standard-form construction contracts and consultancy agreements)
• Proportionate liability regimes (including Part IVAA of the Wrongs Act 1958 (Vic)) and their impact upon contract risk allocation.

• Take-home examination (100%) (6–9 November)
  
  or
   
• Research paper 10,000 words (100%) (3 December) (topic approved by the subject coordinator)