Climate change, AI, modern methods of construction and more complex projects are creating new legal risks and responsibilities. We convened a panel of experts to explore how construction disputes will evolve over the next decade, and how firms and professionals can protect themselves.

Legal disputes are an unfortunate fact of life in the construction industry. Fragmented supply chains, complex projects, and cost and time pressures combine to create error, confusion and conflict. But if disputes are a constant, the potential liabilities are shifting. During London International Disputes Week 2025, Ridge and Simmons & Simmons hosted a panel discussion to explore the new risks that firms and professionals could face and how they can protect themselves. Here are their key takeaways.

Extreme weather: ignorance is no excuse

Heatwaves, storms and flooding are becoming more frequent – and more foreseeable. As data builds up on the impacts of climate change, it will no longer be possible to claim such events are exceptional or that they couldn’t have been predicted. “If buildings can’t withstand these impacts, we’ll start to see negligence-related claims against designers,” warned Jonathan Spencer, Partner in the Insurance and Construction group at Simmons & Simmons. “For example, if a retaining wall fails as a result of flooding, and flood data was available but not incorporated into the design, the design-and-build contractor could be liable.”
Professionals could be found negligent even if they’ve followed established codes or standards, added David Pope, Partner in the Expert Witness & Advisory Services team at Ridge. “It should absolutely be best practice for all designers to consider the impacts of climate from day one. They should make clients aware that the code may not necessarily be representative of current and future weather data, and that it is foreseeable that aspects such as wind loads and solar gain are going to increase, groundwater levels are going to change, and designers need to build in additional resilience for these predictable changes.”

Climate risk will be written into contracts – and passed on to contractors

Climate change might lead to more claims related to weather and ground conditions from contractors and subcontractors, said Steven Walker KC, a barrister at Atkin Chambers. But as climate risk is written into contracts, these claims will be less likely to succeed, argued Trevor Cosgrove, a specialist in non-contentious construction law at Simmons & Simmons.
Contractors can claim that “exceptionally adverse weather” or “force majeure” prevented them from completing a project on schedule, but these terms are not legally defined. This is now changing, said Trevor. Among the standard forms of construction contract, the NEC is the forerunner: the Option X29 clause allows clients to set climate change targets, and incentivise contractors to meet them.

Crucially, none of the climate risk amendments he’s seen would reimburse the contractor for the additional costs of delay or disruption – they are only allowed more time to finish the work.

Humans will be held responsible for AI-generated errors

There is a constant stream of digital tools entering the market, and a new generation of designers who expect to have automation at their fingertips. But there’s no guarantee that their outputs are accurate, and a “move fast and break things” Silicon Valley approach could be disastrous in the construction sector. “The worst-case scenario is that a building has to be demolished, only to later discover that a junior engineer decided to input some design calculations into ChatGPT,” said Jonathan.

If something goes wrong, it’s the professional who will be held responsible because AI doesn’t have a legal identity, he added. They could be found negligent for delegating decisions to the AI, or for not instructing it properly. Even if no fault is found, they could still be liable. This is known as “strict liability”, and it’s not always covered by professional indemnity insurance.
AI-generated mistakes may also be harder to pick up, warned David: “They potentially get things wrong in slightly different ways, and make more unnatural errors. But at the root of it, it comes back to human error. There’s a responsibility on designers to understand outputs and check designs in the same way we’ve always done.”

PFI is back on the agenda – and it’s going to be contentious

Hundreds of high-value PFI contracts are set to expire over the next 20 years – and that means schools, hospitals, prisons and many other public buildings constructed and maintained by the private sector are due to be handed back to the government. The sticking point will be condition of those assets: what is a reasonable level of wear and tear after 25 years?
“That will be a fertile ground for argument,” said Steven Walker KC, a barrister at Atkin Chambers. This is for three key reasons: because it’s not clearly defined in the original contracts, because of the practical difficulties of surveying complex, operational buildings, and because the UK pioneered this form of procurement so there are no useful precedents in other jurisdictions.

“There’s a lot of guidance out there, and more to come from government, as to how handback should be managed – but if it’s not in the contracts, it’s not binding.”

This could reshape the disputes landscape for some time to come, he added.

Contracts are not equipped to deal with modern methods of construction

Offsite and modular construction promises to speed up programmes, improve quality and reduce costs. But it splits the responsibility between the site and the factory, introducing the potential for errors, delays – and disputes.
Standard forms of contract are based on different trades working in close proximity, constructing buildings to site tolerances, explained Trevor. Modern methods test this, because factory-made components demand much higher levels of accuracy in order to slot together as intended. “Who takes the risk on the interface and the coordination between on-site and off-site tasks? A factory may be hundreds of miles from site, and production lines are based on drawings.” Errors on a factory production line quickly scale up too: “If you have build-to-rent scheme or a hotel with three-hundred units, any mistake could be very costly.”

Beware the data centre performance gap

The world is in the throes of a data centre construction boom – and that will inevitably mean a boom in related disputes. Projects are high-value, fast-paced and very complex, and the financial consequences of any delay or downtime are potentially huge. Spencer foresees claims arising from a whole range of issues, from late designs to supply chain insolvencies to the time taken to connect them to the electricity grid.

Commissioning will be a flash point, specifically the gap between designed and actual performance. Cooling technologies are evolving very rapidly in this space, to enable operators to pack in more computing power and reduce energy consumption. “Designers are pushing the boundaries of what’s possible, but commissioning is often contractor-led,” said David. If systems fail to perform as expected, establishing where the fault lies will be very difficult, setting the scene for protracted legal action.
An overarching theme of the discussion was that clients, insurers and funders would hold professional advisors and contractors accountable for helping them to respond to evolving challenges and innovations. New technologies such as AI and automation may demand and facilitate ever greater speed of delivery, but they will not remove the need for human oversight and rigour – and in fact, they will increase it. In our messy, rapidly changing world, teamwork, good communication and multidisciplinary collaboration will continue to be essential.

David Pope MEng, CEng, FIStructE is a Partner in the Expert Witness & Advisory Services team at Ridge. You can contact him at davidpope@ridge.co.uk

The panel:
Chaired by: Alice Parker, Architectural Education Lead, Ridge. AliceParker@ridge.co.uk
Jonathan Spencer, Partner, insurance and construction disputes, Simmons & Simmons
Steven Walker KC, Barrister, Atkin Chambers
Trevor Cosgrove, Partner, non-contentious construction law, Simmons & Simmons