My long-term friend and colleague Kiri Parr and I wrote an essay in late 2022 on objectively quantifying risk in construction contracts. It is very common to have onerous contract clauses drafted by legal counsel without any rational basis for them. Lawyers typically use subjective approaches in deciding how contract risks such as liability, fitness for purpose, or extensions of time should be allocated.
We make the argument that objective approaches following published risk management standards should be used instead. So we developed a method for quantifying the risks and comparing them between different contracts that lets the parties discuss the terms on a more objective basis.
We submitted the essay in the Society of Construction Law Australia’s annual Brooking Prize. Whilst it didn’t win the Prize, we are pleased that it was awarded a commendation. We are looking to publish it and promote the method outlined further to try and help contract parties discuss and negotiate their contract terms in a more informed manner. If this interests you, here's the essay: