AI is transforming dispute resolution by predicting outcomes, reducing conflicts, and enhancing decision-making – while raising vital data privacy concerns.
Artificial intelligence is revolutionizing industries worldwide, and construction is no exception. From project management to risk assessment, AI-driven tools are improving efficiency and mitigating conflicts.
After more than three decades in construction management and dispute resolution, I’ve seen technologies come and go, some promising, some transformative, but AI, at this time, appears different. It’s not just changing how we build; it’s reshaping how we think about conflicts in the construction industry, how we foresee them, how we mitigate them, and potentially, how we resolve them.
To understand AI’s potential in dispute resolution, it’s important to first consider the most common causes of construction disputes. These include errors and omissions, differing site conditions, resource availability, and owner-directed changes.
Errors and omissions, such as design flaws or incomplete documentation, can lead to conflicts about project execution. Differing site conditions, including unexpected environmental or structural challenges, can result in delays and cost overruns. Resource availability issues, such as shortages of materials or skilled labor, can disrupt schedules and lead to disputes over responsibilities. Additionally, owner-directed changes, where modifications are requested after construction has begun, often lead to disagreements over scope, costs, and timelines.
Typically, resolving these disputes requires careful human analysis, but what if AI could assist with this task? A study published by the American Society of Civil Engineers in 2023, "Journal of Legal Affairs and Dispute Resolution in Engineering and Construction,” tested AI’s ability to analyze past construction disputes that had already been resolved through adjudication. When AI was applied to these cases, it successfully predicted or aligned with the actual reasoned resolutions (the final decisions made in those disputes) 95% of the time.
When examining the vast amount of data generated by construction projects, AI proves to be a valuable tool in predicting potential outcomes based on data and past litigated findings. By identifying possible issues before they arise through the analysis of trends and patterns in contract disputes, AI can help improve contract management, even reducing conflicts within construction projects.
AI applications, such as Lex Machina and Solomonic, have demonstrated an ability to rely on past litigated judgments with additional data input to reach a predicted conclusion, which can assist in the decision-making of whether to negotiate a settlement or move forward with litigation.
However, the use of AI comes with its challenges. As we are still in the early stages of utilizing the software in construction disputes, the primary concern is maintaining the confidentiality of parties during data processing with the AI machine.
The question arises, how is the data protected from being released or accessed by outside non-participating parties? Such data could include personal information, company financial information, and intellectual property. As noted in an article by the American Bar Association entitled “Artificial Intelligence in Construction: Potential Capabilities and Risks,” consideration must be made for data privacy laws and copyright infringements.
Despite these concerns, AI is here and forthcoming in construction dispute resolution. The industry must continue preparing for the eventual use of AI. The reality is that the large amount of data generated from construction software programs provides an opportunity to use AI to synthesize. However, the results of the synthesis must be verified, and not blindly accepted.
AI can be used as a guide in disputes to analyze and predict outcomes. But, more importantly, the use of AI must be approached with careful consideration of the resulting information and protection of confidential information. Safeguarding and protecting confidential and proprietary information must be addressed and incorporated.
From my perspective, AI can be best applied as a resource for consideration and guidance, but not as a conclusion or answer for construction dispute resolution. AI will synthesize data, but it requires the experience of a seasoned construction consulting professional to consider the information derived from AI sources and apply it to the analysis and conclusions.
Thomas Mitchell, PE, CFCC, is a senior project manager at Urban Engineers, Inc. Connect with him on LinkedIn.