Resolve Insights: Applications of AI in Construction Claims & Dispute Resolution

21 Jun 2024

The construction industry, characterised by unforeseen circumstances and oscillating budgets and delays, is no stranger to claims and disputes. As the engineering and construction sector, and competition within it, grows ever-more complex, how can the transformative potential of artificial intelligence be applied in construction claims and dispute resolution?

Resolve Insights: Applications of AI in Construction Claims & Dispute Resolution

The ever-increasing complexity of construction projects plays a vital role in stimulating socio-economic factors and improving the gross domestic products (GDP) on a global scale.

Despite being one of the least digitised sectors, the growing complexity and competition within the engineering and construction market, coupled with the industry’s inherent challenges, necessitate more efficient, accurate, and transparent processes, particularly in the field of avoidance, management and resolution of claims and disputes. Traditionally lagging in adopting new technologies, the construction industry is slowly, albeit surely, beginning to recognise the potential of artificial intelligence (AI) to revolutionise its operations.

Omnium Resolve Claims Consultant Hiba Irshaid takes a deeper look at the potential of, and challenges presented by, the application of AI in construction claims and dispute resolution.

AI in the construction industry

AI, driven by advancements in big data analytics, machine learning and generative AI (Gen AI), presents a transformative opportunity for the construction claims and dispute resolution industry.

While AI cannot replace human intelligence, it will undoubtedly replace those who do not leverage it. As the construction industry ventures into the era of Industry 4.0, the integration of smart technology, automation and data analytics will drive a remarkable shift.

AI technologies are adept in generating high-quality content with significant insights through Gen AI models. These models can analyse vast amounts of construction data, including contracts, drawings, and schedules, providing stakeholders with tools for early dispute avoidance and management, thereby saving time and resources.

Governments and regulatory bodies are increasingly recognising the importance of governing AI usage across sectors to ensure the efficient and ethical use of AI. The EU Artificial Intelligence Act, currently at the forefront of government regulations, provides a comprehensive framework on the use of AI across the European Union.

Other countries are following suit in implementing their own regulations. Notable examples include the UAE National Strategy for Artificial Intelligence 2031, and the UK AI Regulation White Paper.

Advantages of using AI in construction dispute resolution

AI offers numerous benefits in the avoidance, management and resolution of construction claims and disputes:

1. Increased efficiency: AI streamlines processes, allowing construction professionals to save time and resources and allowing them to focus on strategic and value-added activities, rather than routine tasks.
    
2. Improved Accuracy and Objectivity: By minimising human error and enhancing data analysis, AI removes human bias and subjectivity from the process, leading to fairer and more accurate assessments.
    
3. Predictive Analytics: AI’s predictive capabilities enable early identification of potential damages, facilitating preventive measures. By analysing historical data and project performance, AI algorithms can identify patterns to inform enhanced decision-making strategies.
    
4. Reduced Time and Costs: Natural language processing (NLP) can extract critical information from complex project and contract documents, enhancing work quality and saving time and costs in routine tasks. AI-driven contract analysis can swiftly scan contracts to identify ambiguities and discrepancies, expediting the review process.
    
5. Dispute Prediction and Outcome Analysis: AI algorithms can analyse historical data from resolved claims and disputes to predict the likelihood of success in various claim and dispute scenarios. This empowers parties to make better-informed decisions on negotiation strategies, settlement offers, and potential risks.

   Challenges and considerations when applying AI to construction claims management

   While AI holds immense potential, it is crucial to acknowledge its limitations and potential challenges:

6. Data Bias: AI algorithms are only as good as the data they are trained on – biases in training data can lead to unfair and inaccurate outcomes. AI systems rely on predictive analytics and assumptions, which can skew recommendations if the underlying data is inaccurate or incomplete.
    
7. Construction Uniqueness: Each construction project is inherently unique, with its own set of variables, constraints and unforeseen challenges. AI models are often trained on historical data, and while they can identify patterns and trends, they may struggle to account for the nuanced and specific factors. Therefore, human expertise remains essential to interpret and verify AI findings.
    
8. Construction Documents: AI technologies may potentially miss on critical points as construction documents still exist in non-digital formats. To ensure effective research of documents, it is important to ensure all relevant documents are digitised into machine-readable formats.
    
9. Legal Considerations: The use of AI in legal matters raises ethical concerns and questions on transparency and accountability. Regulatory frameworks and ethical guidelines within organisations are necessary to ensure the responsible integration of AI into the legal and contractual landscape of construction claims and dispute resolution.
    
10. Ethical Judgement: AI cannot replace knowledge, empathy, and ethical judgement that humans bring to claims and dispute resolution. Therefore, integrating AI with human expertise is crucial to maximising the benefits of AI-powered claim and dispute management and resolution.

Omnium Resolve Opinion

Construction disputes are inevitable, imposing time and cost implications, as well as straining stakeholder relationships. Implementing AI at the outset of a project can minimise disputes throughout the project lifecycle. When construction disputes arise, AI can serve as a useful tool to enhance claim and dispute resolution outcomes.

However, careful considerations of challenges such as data bias, data security, and the role of human expertise is necessary to ensure AI’s positive contribution. By adopting ethical and regulated frameworks, and maintaining a balance between AI and human judgement, the construction sector can navigate the complexities of dispute resolution more effectively.

Leveraging AI technologies allows stakeholders to streamline processes, detect and address potential disputes early, and improve communication and collaboration. As AI technology emerges and becomes more accessible, we can expect to see widespread adoption across the dispute resolution industry.

This will lead to faster, fairer, and more cost-effective dispute resolution. Therefore, it is vital for individuals, as well as organisations, to adopt a forward-thinking approach in the context of AI technologies through regular training and research.

All opinions expressed in this article are solely those of the author’s for informational purposes only. The content should not be construed as legal advice.

About Omnium Resolve: Construction Claims Management & Dispute Resolution in Dubai, Abu Dhabi, Saudi Arabia & Europe

Omnium Resolve delivers a complete suite of construction claims management and dispute resolution services throughout a project’s lifecycle, and across all sectors of the construction industry, including:

• Contract Support
• Dispute Avoidance
• Dispute Resolution
• Quantum & Delay Analysis
• Arbitration
• Expert Witness

In addition, in the UK our team also supports clients with mediation and adjudication processes. Omnium Resolve supports clients throughout Dubai, Abu Dhabi, Saudi Arabia, Kuwait, the wider GCC, UK and Europe.

For more information on the use of AI in construction contracts, or for contractual and legal advice relating to construction claims, please contact Omnium Resolve.