Is there any case law related to risk allowance consideration for CE. Or, what is the implied obligation related to risk allowance that the project manager should consider during his assessment.
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No case law that I am aware of.
The express obligation on the Project Manager (rather than implied) when making an assessment, is to do what it says in the contract. This is clause 10.1.
Clause 63.8 expressly says “The assessment of the affect of a compensation event includes risk allowances for cost and time for matters which have a significant chance of occurring and are not compensation events.”
So reading clause 10.1 and 63.8 together, the Project Manager is obligated to look at the compensation event in question and make a determination on what contractor risks have a significant chance of occurring (e.g. weather which is less than 1-in-10 years, suppliers not performing etc) and make an allowance for these in the assessment.
In practice, this can e difficult for some Project Manager’s, because they are not Contractors. However, what the Project Manager must NOT do is simply ignore the risks because it might involve the Client paying more. In my experience, I often see this happening and it is fertile ground for disputes.
The case law is clear a professional contract administrator is required to act fairly and impartially in matters of assessment and certification. See the NEC case of Costain v Bechtel (2005), paragraph 46 in particular.
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