Risk allocations in standard forms of engineering and construction contract.

The underlying hypothesis for this research is that within the construction industry, some risks are allocated in a way which might not optimise the benefits to the parties involved. In essence, this could be generating more disputes at site level and above, in construction contracts due to the conflicting views surrounding them. There could be much improvement in the way they were allocated for the ultimate reduction in the incidence of disputes and therefore in the construction cases that eventually need arbitration and possibly, litigation. In turn, this leads to increased productivity of construction and greater competitiveness for the industry clients.

In practice, there are many factors which influence the risk allocation option models currently adopted. This thesis attempts to show a thorough investigation of the option models adopted, the factors that are influencing their adoption along with a complete in depth analysis for future improvement. It also attempts to show the hypothetical impact of option models which are not adopted and whether they could provide the improvement needed towards the main objectives which are a reduction in the incidence of disputes and greater productivity of the industry.

Risk allocations are mostly implemented through relevant conditions or clauses within forms of contract between the client and contractor or within the contract between the client and his designer. Other risk transfer routes include insurance contracts and contracts of professional indemnities.

Risk allocations are based on certain principles even though these principles are not based on a robust theory. However, these principles underpin the different models of risk allocation. The research sought to identify those principles which are not always self-evident or well understood. This thesis also includes an invaluable database of industry interviews and surveys that helped achieve the aims and objectives of this research.