Construction dispute resolution is poised to be transformed by AI, though take-up is uneven, and there is a risk of a technology gap between big and small firms.
That is one of the takeaways from a report by global independent law firm group CMS. It found that while legal professionals in larger construction and engineering firms are already using AI, those in smaller firms were struggling to keep up. This has the potential to create an inequality in dispute resolution.
CMS UK disputes partner Emma Schaafsma said: “The speed and extent of AI adoption risks leading to inequality of arms, so to speak.
“Large corporations with large legal functions are already embedding AI within their workflows and have the IT and financial resources to support them, while smaller businesses do not have the time or budget to explore how AI can streamline their practices: the disparity between them is increasing rapidly.
“For those businesses, the best option is often to look to external legal advisers that can step in with advanced systems and expertise.”
The report found an expectation (62%) among construction and engineering companies that their external legal counsel will bring AI-based tools with them. Smaller businesses, in particular, may be relying on law firms to bridge their AI technology gaps.
Same disputes
While new disputes are emerging, such as those related to ESG or digital transformation, the report found they are unlikely to displace traditional causes such as delays (88%), payment issues (58%), and scope of work disagreements (52%).
Over half said they would be using AI within three years for modelling, compliance, predictive maintenance, communications, quality control, and project management. Yet more than a third were unsure if, or when, AI would be used in those areas.
Using flawed AI output was seen as a significant risk for 72% of respondents, while 68% are concerned about data or privacy breaches. There was still significant concern around the dangers of inadequate governance (46%), lack of transparency (44%), and unauthorised AI use (34%).
The Transition then transformation: AI in construction disputes report was compiled from data gathered between 17 March and 18 May 2025.
More than 50 senior legal and contract professionals took part, working in construction, infrastructure and engineering across Africa, the Americas, Asia, Europe and the Middle East. More than half worked for businesses with revenue over $1bn, and nearly a third with revenue over $5bn.
