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How can contractors guard against legal challenges in the digital age?

Pinsent Masons' Nesreen Osman on how industry maturity can ensure the proper application of building technology

Nesreen Osman, Pinsent Masons.
Supplied / Alex Jeffries
Nesreen Osman, Pinsent Masons.

In this exclusive comment piece for Construction Week, infrastructure dispute specialist Nesreen Osman, a soon-to-be partner at law firm Pinsent Masons, says the digital shift could create as many problems as it solves, with built assets becoming an attractive target for hackers and disputes unlikely to dissipate.

Some say emerging technologies, such as blockchain and artificial intelligence, can prevent construction disputes and eliminate payment delays. What do you think?

I think eventually, yes, technologies such as blockchain and AI will prevent some construction disputes and they will help to eliminate payment delays. However, the issue is not really a question of whether they will do this, it is a matter of when. The construction industry is very traditional and to date has been relatively slow to adopt new technologies and ways of working. As a result, I think it may be some time before we see these technologies having a real impact.

Once these technologies are widely used, such as drones, smart contracts, smart sensors, internet of things, and 3D printing, they have the potential to transform many aspects of the industry including procurement, payment and project management and asset management. But having said that, will these technologies completely prevent disputes and totally eliminate payment delays?

Cyberattacks on critical infrastructure are becoming more common. What should contractors do to protect themselves?

We will have to see but I think the answer is probably no, not at the moment. The industry needs to reach a more mature stage from a digital perspective where all participants in the project are using the technologies in the full and proper way.

Construction companies are beginning to adopt technology, but could this give rise to a host of new legal challenges? Yes, there is potential for all kinds of legal challenges. For example, with building information modelling (BIM), where many participants have access to and can input into the same BIM model, there needs to be agreement at the very outset governing the use of the BIM model.

However, what often tends to happen is that the use of BIM is not reflected in the contracts and sometimes does not align with the approach being adopted by the project team. This creates a significant risk – practically on site and contractually – of mismatch between the parties’ expectations in terms of what is required from them and how they manage their roles and input into the model.

Therefore, there remain major concerns in relation to risk allocation, data sharing, and ownership and differences in culture, which are all potentially challenging.

Technologies such as blockchain and AI will prevent some construction disputes and they will help to eliminate payment delays. However, the issue is not really a question of whether they will do this, it is a matter of when.

Furthermore, even if there are agreements put in place, if these are not comprehensive and drafted in the appropriate way, they will inevitably form the subject of legal challenges.

Indeed, this was highlighted in a recent 2017 case in the Technology and Construction Court in the UK where a sub-consultant prevented the contractor from accessing its BIM information simply by revoking its access password.

Cyberattacks on critical infrastructure are becoming more common. What should contractors do to protect themselves?

There are a number of things that contractors here can do, including: protect all its networks with security software and firewalls; have advanced email and web filtering on all the business networks; set up WiFi access, which is password-protected on site rather than logging onto other parties’ networks; have strong permission controls to limit what different people can access on their network, with sensitive data requiring the highest level of permission; put in place robust polices in relation to information security; and ensure that employees are trained to follow best security practices, and are able to spot suspicious activity.

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