Application of an effective risk management process will substantially increase the probability of success and reduce the probability of claims. It is true that an owner, contractor, etc., may resist having to pay for a specific issue (extra work, delay, etc.) but more often disputes are due to poor communication and lack of understanding of the issues involved. Since “poor communication” not only includes clear identification of the issues (that are part of the risk management process), but an understanding of the expectations of each party, some points that have contributed to prevention or resolution of disputes will be addressed.
A claim has two components—entitlement and damages. Entitlement is identified by the project tools discussed previously and is presented in summary fashion in this chapter.
Damages are calculated by contract provisions or legal precedent. These will be discussed.