The role of contracts and insurance in addressing the risks of failure associated with large and complex projects was the topic explored at the 8th ROFF-SAMRISK seminar held in Oslo in August, 2011, with funding by the Research Council of Norway. The risk of technical, financial, environmental and other failures in large scale complex projects are to some extent addressed and/or mitigated through contract law and insurance.
This article provides a synopsis of the seminar papers, on the basis of an analysis of large and complex projects such as the construction of tunnels, the development of mega-urban transportation projects, the operation of large scale mining ventures in developing countries, the regulation of health services and the internet. Drawing on these examples, we explore a variety of techniques to identify, structure and mitigate risk through contracts, including the use of enterprise risk management approaches, political risk insurance, transparency measures, and the management of information and knowledge. A key insight flowing from the seminar is that proper understanding of the implications of contract architectures requires a convergence between organizational, technological and legal knowledge.
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