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A more sophisticated form of visualization, the bow-tie diagram, is shown in Figure 6.6. As shown in the figure, the diagram is shaped like a bow-tie, showing a clear differentiation between proactive and reactive actions. In its simplest form the bow-tie diagram shows causes (risk sources) on the left-hand side, the undesirable event in the middle, and the consequences that may follow from the event on the right. The diagram can be used to help identify what needs to be done to deal effectively with the risk before and after the event. Actions on both sides—proactive controls and reactive controls—can ideally be built in at the contract planning and design stage.

The bow-tie diagram

Figure 6.6 The bow-tie diagram

A bow-tie diagram can be used to capture and share different views and aspects of risks, their causes and consequences, and to facilitate discussion of risk assessment. As there is often a whole spectrum of possible causes and potential outcomes, the bow tie is useful in focusing on the big picture.

A similar image and the metaphor of Swiss cheese is used in the context of aviation safety, engineering, and health care. The basic idea is that most serious accidents do not result from a single failure or error; they usually come from an error whose consequences were permitted to be amplified either by additional faults or errors, or by the absence (or failure) of a secondary wall of defense.[1] the different defenses can be modeled as a series of barriers, represented as slices of Swiss cheese. The holes in the cheese slices vary in size and position. The system as a whole fails when all of the holes in each of the slices align, permitting the hazard to pass through all of the holes in all of the defenses. if any one of them had stopped the flow, the failure would not have occurred.[2]

Both the bow tie and the Swiss cheese images can be applied to various causes of contract risks. they can be applied to minimize and control not only the causes but also the likelihood and the consequences of undesirable events. When inserted into a bow tie, both the proactive and reactive controls that contracts can provide become visible. in this way, parties realize that contracts are more than risk allocation tools or reactive sources of defense; they are true risk management tools that the parties can use to manage risk together.

  • [1] See, for example, Dauer, E.A. (2006) the role of culture in legal risk management.In P. Wahlgren and C. Magnusson Sjoberg (Eds.), A Proactive Approach. ScandinavianStudies in Law, Volume 49. Stockholm: Stockholm Institute for Scandinavian Law, pp.93-108, 107-8, available at
  • [2] For examples, see Figures 3 and 6 in Reason, J., Hollnagel, E. and Paries, J. (2006)Revisiting the "Swiss Cheese"Model ofAccidents. EEC Note No. 13/06. european organisationfor the Safety of Air navigation, Eurocontrol, 6 and 10, available at
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