The construction industry is renowned for being one of the most cost-intensive industries around the world. A common mechanism in construction contracts is back-ended payments, i.e., the contractor undertakes the costs of construction upfront, and receives payments for the same upon achieving certain pre-defined milestones.

Complex construction projects have a tendency to end up in dispute, owing to a variety of reasons including delays, variations, and defective works. By the time these disputes arise, the contractor may already be low on cash flows, since it has deployed a considerable amount of resources towards completion of the project.

Such disputes create financial challenges for parties, requiring resources for legal fees, expert opinions, and other associated costs. The high costs associated with resolving these disputes often create barriers to accessing justice, particularly for smaller entities or individuals with limited financial resources. This insight explores the financing of construction disputes from the perspective of the Europe, Middle East, and Africa market – particularly focusing on litigation funding and alternative fee arrangements. It also evaluates the benefits, challenges, and future trends of financing construction disputes in the EMEA region.

Authors: Prateek Bagaria, Adhiraj Malhotra, and Rohit Bhattacharya

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