Legal Risk Management in VDP Project

Legal Risk Management 8 LEGAL RISK MANAGEMENT Executive summary The report analyses VDP project and identify inherent risks in the construction, operational and pre-construction phase of the entire project.it also discusses the possible consequences for the contractor and/or client. Inherent risks for VDP Project Risk of disruption by the activities of other Construction activities on the construction site This type of risk mostly happens during the construction of any project. Risks of delay in payment to all the employees on site This type of risk

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LEGAL RISK MANAGEMENT
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LEGAL RISK MANAGEMENT
Executive summary
The report analyses VDP project and identify inherent risks in the construction, operational and
pre-construction phase of the entire project.it also discusses the possible consequences for the
contractor and/or client. The report states the parties capable of controlling the risks. It also
discusses and identifies approaches to dispute Resolution appropriate for the VDP project.
Lastly, the report discusses how the project should be managed in order to reduce and prevent
the impact and occurrence of disputes that are on the project.
Inherent risks for VDP Project
Risk of disruption by the activities of other Construction activities on the construction site
This type of risk mostly happens during the construction of any project. The VDP project may
experience a risk of disruption from the neighboring adjacent buildings. The adjacent buildings
and any similar projects around may prevent the completion of the project in the required time. If
this risk occurs when the consequences are that it will affect the business which happens within
the construction site area (Regmi 2016).
Control
The Contractor of the VDP has higher chances of undertaking the risk. The contractor should
select the supervisor to prevent the risk of disruption. In case the Contractor succeeds in
controlling the risk the construction should continue without the complaints from the adjacent
building (Shoults 2016).

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Risks of delay in payment to all the employees on site
This type of risk always takes place during the construction of VDP project. The delay in
payment to both the Workmen and contractors has a negative effect on the completion of VDP
project. Payment is the total amount of money paid anyone for the performance of a work
process. In construction industry payment is the amount paid to both the contractors and
employees after their works. Payment delay is where there is a delay in paying the employees
and contractors their money by the owners on time (Yassine and Pearson 2014).
The possible consequence is that it will create disputes between the management and the
employees. Most of the employees will revolt and these will delay the completion of the VDP
project. There is also the consequence of no support from other close commercial buildings; this
is because of the disruption to their trading (Loreto et al. 2016).
Control and severity
The contractor of the VDP has the capacity of undertaking the risk. They should appoint the
supervisors on the site to help reduce the risk associated with the disruption. This will help solve
the problem of project delay. The contractor should also appoint an expert to control payment
delay by following the best practices of invoicing- they should ensure that the payment is listed
clearly by ensuring that they have a clean due date. They can also control the problem of a late
problem by preparing a late payment fee. They can prepare either a percentage or a flat fee. This
will help most of the workers because they will access loans in case of late payment (Breunig,
Söderlund and Kvålshaugen 2015).
Risk of Accidents and damage to property to the workers on site

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This kind of risk takes place during the construction phase of the VDP project. Individuals who
are working on the construction project are exposed to higher risks of accidents. The properties
of the workers may also be damaged. These accidents may cause serious construction accident
which may lead to death. The fatal accident may be caused due to falls, trips or slips. Falls are
the main cause of the accident in a construction site and them main result in death or injury.
Workers who are more than six feet tall are at higher risk of being injured. They always fall from
ladders and scaffolding. The workers may contact to harmful diseases derived from the external
environment of the workplace (Ayele 2016).
Control and severity
Accident and damage to properties to workers may make the project to proceed at a loss. It may
even delay the VDP extension project and if death occurs to any worker then there will be
compensation to those who are affected by the injuries. To control falls, the contractor is advised
to provide suitable safety gear and equipment to reduce and prevent causes of fall as well as
other accidents (Paris, Ahluwalia, Cummings, Moreland and Wilkinson 2017). The fall
protection must also be provided at the construction site. The fall protection should also be given
at 6 feet at the site. The contractor should guard hole in the entire floor that can enable workers
to walk as well as fall through by putting in place a railing and toe-board. The contractor should
also provide suitable working conditions which are free from injuries and known dangers. The
contractor should also keep the working environment clean and train workers on how to avoid
malicious injury (Hovav and Herbon 2017). If the property happened because of the negligence
of the Contractor then he should be made to compensate those who are injured during the work.
The risk should also be taken by the Company in case the damage happened because of the
environmental factors. If the accident occurs to the workers on site when performing duty then

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the Contractor will be liable for any damage caused to any workers and the client should pay for
the damage in the form of money to those workers who are affected (Dombret and Goldbach
2017).
Risk to the pedestrians (those who are using roads close to the site) project area while using
heavy Construction equipment.
The construction site can cause injury to the Pedestrians or can kill them due to the mobile
equipment used on the site. Any pedestrian who is walking close to the construction site is
exposed to a different type of risk. If not control then the accidents to those who are walking will
cause death or damage (Hovav and Herbon 2017).
Control and severity
The risk will greatly affect the Company. This risk should be incurred by the Contractor. The
contractor can manage and control the risk by appointing the controllers of the traffic on the
streets as well as putting suitable signboards.
The risk of errors omission in the Design Documents
This type of risk happens during the time of the construction phase of the VDP project. Design
errors have a negative effect on schedule, safety performance and cost of construction projects.
They can also affect the Company who undertake the project. The additional work will require
time and resources to correct the error that has happened. The omission or error can cause injury;
damage and financial suffering for example cost of rectifying action and delays. The error in
design documents can prevent the progress of the construction (O'Sullivan 2017).
Control and severity

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The error or omission by ensuring that essential details are collected by and from qualified
experts who are aware of the project, the experts should also have education and experience with
the problems at hand. If the error is in the design documents and recognized during the
construction, then they should omit the error for the easier progress of the project (Gravino,
Sîrbu, Becker, Servedio and Loreto 2017). The client (Company) has to take full responsibility
of the risk because they are the giver of the design documents to the VDP Contractor. The
architect will also bear the risk and offer a corrective drawing to help in the completion of the
construction project.
The risk in obtaining requisite planning authorization (permit) for the extension project
Planning permission is the greatest risk that may affect the VDP project. A decision on whether
to make detailed application and when to apply for the project are quite essential for any project.
A client should get the planning permission so as to reduce abortive design costs. A planning
permit represents a legal document that enables a construction development on any site and it is
being issued by the local authority. It is mandatory for any Construction Company to obtain a
planning permit before the start of any project.
Control and Severity
The delays can be prevented by seeking the pre-application advice from any experts such as the
local planning authority who can explain the application form and the general information
needed. If there is no planning permission, then the Company has no capacity to continue with
the project. The consequences will be low for the contractor and high for the Client. If a client
selects a consultant to make a development planning request for the permit then the consultant
from the client will suffer partial risk burden. The Client has the capacity of controlling the risk.
In case the Client succeeded in getting the risk then the Client will enjoy benefits (Sardi 2017).

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Disputes Resolution approaches
Arbitration
This is more appropriate dispute resolution process in VDP project as it will enable an extension
of the project. The process of Arbitration is subjected to legal control, while formal disputes can
be decided by the private tribunal. An arbitrator must a private individual with a lot of
experience and expertise chosen by either party (Yassine and Pearson 2014). Arbitrators should
be guided by the legislation, the decision arrived by the arbitrators can be enforced by the legal
institution such as the court (O'Sullivan 2017). The disputes that happen in the VDP extension
project regarding a delay in disputes or time relating to excess budget, the arbitrator has the
authority and power to assess and award suitable reward for example order to pay money as well
as to announce rights between parties. Arbitration is essential since it is accepted and supported
globally (Folberg, Golann, Stipanowich and Kloppenberg 2016).
Avoiding
This approach is also known as the Withdrawal style. The approach is a situation whereby the
parties involved withdraw from the problem or postponed the problem to a later date. This type
of approach offers a temporary solution because conflict and problem continue to develop
between the parties (Cangioni and Spataro 2014).
Techniques to prevent the impact and occurrence of disputes on the construction project
Managing issues
Disputes that may arise in VDP project can be controlled by not only managing the disputes but
also the problems arising at the early stage of the project. In the VDP extension there exist
different issues which arise on the site (Fainshmidt, White and Cangioni 2014). It will be good

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when the issues are solved since unresolved problems may lead to serious disputes. The
company that undertakes the project should give resolution meetings to avoid the occurrence of
disputes (Fainshmidt, White and Cangioni 2014).
Checking conditions and terms of a construction Contract
It is the essential feature to check the conditions and terms of a contract by the parties before the
signing of the contract since conditions and terms will be involved conditions that have to be
followed such as terms of payment (how and when it should be done). During the early stage of
the project, it will be essential to check the extension and variation of time for both parties to
prevent the disputes (Lee, Patel, Dean, Webster and Eaton 2017).
The contract should be reviewed before signing it
It is very important to review well a contract for the identification of any doubt that relates to the
clause in the contract. The Contractor and the Client can allow the experts to review the contract
before signing it to prevent any dispute that may arise.
Encouraging effective communication
An effective communication will help reduce disputes between the parties that are involved in
the formation of the contract. The contractor should offer the required information to the client
on the extension projects. The communication between the parties should be specific and clear
and it should be given by writing only. The terms should be kept in writing rather than keeping
them in verbal communication.
Conclusion
The report covers the project undertaken by the VDP construction. The company that performed
the project is effective examined and 6 suitable risks are identified, the controlling criteria and

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severity are discussed. The most appropriate dispute resolution approaches such as Arbitration
and withdrawal are explained to help in solving the disputes perfectly and suitable preventive
measures of solving disputes, for example, effective communication, reviewing a contract and
managing the contracts for the efficacious completion of the project.

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