Dispute Resolution

AI in Construction Disputes: Opportunities and Challenges

Author: Christina Pavli

The Growing Role of AI in Construction Disputes

Artificial Intelligence (AI) is increasingly influencing the construction disputes landscape, offering new ways to prevent, manage, and resolve conflicts. From contract analysis to real-time project monitoring, AI tools are reshaping how construction and legal professionals approach dispute resolution.

This article explores the practical applications of AI in construction disputes, alongside the key risks and challenges that must be addressed to ensure responsible and effective use.

Practical Applications of AI in Construction Disputes

Judicial Use of AI in Legal Reasoning

At the Law Society’s Dispute Resolution Conference on 14 September 2023, Lord Justice Birss—an experienced judge in intellectual property law—revealed that he had used an AI tool to generate a summary of legal principles while drafting a judgment.

He explained:

“I asked ChatGPT ‘can you give me a summary of this area of law?’, and it gave me a paragraph… It’s there and it’s jolly useful”.¹

He emphasised that he retained full responsibility for the judgment, noting that AI was used purely as a reference tool rather than a decision-maker. This represents one of the earliest known uses of AI in judicial reasoning within the UK.

How AI Is Transforming Construction Dispute Management

Contract Review and Management

AI-powered tools can:

Compare contracts against industry standards and legal frameworks
Identify ambiguous clauses that may lead to disputes
Recommend clearer dispute resolution mechanisms

This reduces contractual risk and improves compliance from the outset of a project.

Dispute Prediction and Prevention

Machine learning models can analyse historical project data to identify patterns linked to:

Delays
Cost overruns
Disputes between parties

AI can also monitor live project data such as:

Progress tracking
Budget expenditure
Resource allocation

This enables early detection of issues such as scheduling conflicts, financial discrepancies, or quality failures before they escalate into formal disputes.

Document Management and Evidence Retrieval

Construction projects generate vast volumes of documentation. AI can:

Organise and categorise documents efficiently
Extract key terms relevant to disputes
Identify inconsistencies or contradictory evidence across records

This significantly improves efficiency in preparing for adjudication, arbitration, or litigation.

Key Challenges and Risks of AI in Construction Disputes

Evolving and Unregulated Technology

AI tools are continuously developing. Not all platforms are tailored for legal or construction-specific use, meaning outputs may lack relevance or accuracy.

Data Privacy and Confidentiality Risks

Open-access AI platforms may not guarantee confidentiality. Sensitive project or contractual data could be exposed if entered into unsecured systems.

Firms must carefully assess data protection standards before adoption.

Bias and Lack of Objectivity in AI Systems

AI systems are trained on historical datasets, which may contain embedded bias. This can affect fairness in outputs and raise concerns in dispute resolution contexts where impartiality is essential.

Human oversight remains critical, particularly in interpreting contracts and assessing liability.

Data Quality and AI “Hallucinations”

AI relies on accurate and complete data. In construction projects, information is often fragmented or inconsistent, reducing reliability.

AI may also generate incorrect or fabricated outputs (known as “hallucinations”), which can mislead decision-making if not properly checked.

Impact on Professional Fees and Resourcing

AI-driven efficiency may reduce the number of hours required for tasks such as document review or contract analysis. While this can lower costs, it may also impact traditional fee structures in legal and construction consultancy services.

Ethical Considerations

AI should be used as a supporting tool, not a replacement for professional judgment. Ethical concerns arise where AI influences decision-making without adequate human review.

Summary

AI is rapidly transforming the construction disputes sector, offering significant opportunities in contract management, dispute prevention, real-time monitoring, and evidence handling.

However, these benefits must be balanced against important challenges, including data privacy risks, bias, data quality issues, and ethical considerations.

Ultimately, AI should be viewed as an assistive technology—enhancing, rather than replacing, human expertise in construction dispute resolution. When used responsibly, it has the potential to significantly improve efficiency, accuracy, and outcomes across the industry.

Footnotes