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The construction industry is expected to face rising disputes, but with more agile dispute resolution methods emerging, the number of cases heading to court will decrease.
“The high cost of litigation will spur the demand for more agile resolution and mediation strategies designed to resolve issues more quickly, before they get to court,” said James F. Gallagher, P.E., F.ASCE, Resolution Management Consulting.
In 2025, the commercial construction industry will experience significant changes due to evolving economic, technological, and political factors. Among the top trends influencing disputes and litigation in this space are:
Building Information Modeling (BIM) Complexity
While BIM can enhance collaboration, its limitations, such as delayed updates and incomplete coverage, can lead to disputes when errors arise.
Early Implementation of AI in Construction
AI in construction is still in its infancy. Issues related to cybersecurity, data mismanagement, and AI policy in contracts will lead to potential disputes.
Ongoing Inflation
With construction material and labor costs rising, disputes will increase due to unaccounted price hikes in existing contracts.
Elevated Interest Rates
Higher interest rates, combined with rising material and labor costs, could delay projects, leading to completion disputes.
Transition from Offshoring to Onshoring
Supply chain disruptions caused by the shift to onshoring could continue to spark disputes until the system stabilizes.
Changes in Federal Administration
New political leadership will impact construction laws, regulations, and priorities, potentially leading to disputes in safety, labor, and environmental standards.
Tariff Effects
Tariffs on materials will disrupt pricing and availability, contributing to disputes over budget and timeline changes.
Labor Shortages
The shortage of skilled workers will result in delays and substandard work, prompting legal action.
Expert Witnesses’ Expanded Role
Experts will be consulted earlier in disputes to facilitate quicker resolutions, reducing the need for lengthy litigation.
Gallagher concluded, “While the number of disputes is set to grow, those proceeding to court will likely decrease as alternative resolution strategies become more prevalent in the industry.”