Simon Tolson has, in 2024, again had the honour of engaging as a Commissioner with Building Magazine following the highly successful Building the Future Commission1 reports, and this year participating in the Building the Future Think Tank2 which investigated thought-provoking ideas aimed at reshaping the built environment. The Think Tank considered the significant challenges within the construction sector and the broader built environment, and aims to produce in-depth research and reports for the industry. For 2024, the focus has been on five key areas: AI and digital construction, implementing net zero, workplace and productivity, building safety, and people and skills.
A critical topic emerging from the discussions was the pressing need for educational reforms in the construction industry. To address the growing skills gap, a strategic investment in aligning education with industry demands is essential. At Fenwick Elliott, we actively support the Construction Youth Trust, nurturing young talent and motivating them to pursue careers in construction.
In that context, I am compelled to say that ESG – Environmental, Social, and Governance – strategies are impacting property development in London, much of Europe and, increasingly, the construction industry worldwide. Companies are progressively adopting sustainable practices to reduce their environmental footprint, influenced by stricter regulations and growing investor expectations for responsible operations. As public awareness of social and environmental issues rises, construction firms prioritising ESG are often better received, win work and can enhance their reputation, ultimately reshaping how projects are planned and executed. Something we in Fenwick Elliott take seriously, too.
ESG is transforming how properties are built and managed. Investors and the public are demanding that businesses prioritise these measures. Recent trends include the adoption of green building certifications (like BREEAM, LEED, WELL and DGNB), along with a push for renewable energy in new developments. Legislation such as Biodiversity Net Gain3 is encouraging the creation of green spaces in urban areas. This shift not only benefits the environment but also enhances the wellbeing of residents and adds value to properties.
Corporate sustainability, as I am sure you know, is an approach to conducting business that creates sustainable, long-term shareholder, employee, consumer and societal value by pursuing responsible environmental aims.
In 2023 to 2024, emphasis was largely on the rapid development of ESG regulations worldwide. Looking ahead to 2025, policymakers and regulators need to shift their focus towards implementing and enforcing these new rules. This will include efforts related to transition finance (financial support that helps decarbonise high-emitting activities) and the establishment of transition plans. Significant attention on how disclosure regimes will operate globally raises important questions about their practical implications for businesses.
A business’s reputation and past behaviours significantly shape expectations for its current and future conduct, especially regarding ESG practices. A strong reputation can lead to competitive advantages and higher pricing potential, but it also risks reputational damage, which can decrease market value. Research4 indicates that investors prefer genuine ESG initiatives, like net zero commitments and broad diversity, while misleading claims, such as greenwashing, can damage reputations.
The integration of ESG clauses into standard construction agreements represents a significant leap towards a more sustainable and responsible industry. We are seeing sustainability regulations and best practices increasingly influencing contracts and contractor practices. Legal changes aimed at achieving net zero goals will likely require that contracts explicitly incorporate sustainability benchmarks,5 altering project execution and risk management. Integrated sustainable design, ensures that aspects such as whole life carbon (“WLC”) analysis and standardised energy calculations and the like, collaborate with the design brief. This approach aims to deliver projects within budget and on schedule. Yet, as buildings become more complex and require extensive analysis to meet low impact targets, MEP and building services companies often fall short which leaves architects and D&B contractors frustrated with the sustainability workload. Firms that integrate building performance and services design alongside architectural expertise will likely see increased success. Local authorities across the UK will increasingly adopt WLC methodologies6 as part of their planning application process to prove minimal material carbon impact in developments.
Increased collaboration among stakeholders (architects, contractors, developers, policymakers and communities) will be a key driver of sustainable construction.
As we stand on the brink of 2025, the landscape of construction law is undergoing significant transformations, shaped by advancements in technology, evolving business and societal expectations, and an increasingly complex regulatory environment.
These shifts are influencing the legal practices that govern disputes and construction projects, the relationships among stakeholders, and the mechanisms for resolving disputes. In this frontispiece, I briefly explore key trends poised to redefine the field.
1. Integration of technology and legal practice
Building Information Modelling, blockchain-enabled smart contracts and artificial intelligence, used properly, will not only enhance project efficiency but also revolutionise the legal frameworks that support construction projects. Traceable, immutable and secure smart contracts, underpinned by blockchain technology, will automate many contractual obligations and conditions, reducing the margin for disputes and streamlining compliance and payment processes with the benefits of decentralisation, verifiability and tamper proofness.
Fee earners will find themselves collaborating with technology experts to ensure that contracts are written in a manner that accounts for automated processes. Drones and Internet of Things devices are and will provide real-time data, making compliance monitoring more accessible and transparent. This integration means that construction lawyers will need to cultivate technological literacy to advise clients effectively and remain competitive in the industry, and it is not unlikely a few less lawyers may be needed as processes are made more efficient by technological innovations.
2. The rise of sustainability and green building practices
With a growing emphasis on environmental stewardship, sustainability has become a focal point in construction law contracts as already alluded. By 2025, we expect to see comprehensive regulations that promote green building practices and address the impact of climate change. Construction lawyers are playing a pivotal role in navigating these new regulations, helping clients comply with increasingly stringent building codes, emissions standards, and sustainable practices.
Furthermore, emerging legal frameworks surrounding carbon neutrality and renewable resource utilisation necessitate innovative contracting strategies. Lawyers will be tasked with drafting agreements that incentivise sustainable practices, facilitate eco-friendly financing, and ensure adherence to evolving governmental mandates aimed at reducing carbon footprints. As a result, the demand for specialised knowledge in environmental law will grow, creating opportunities for legal practitioners in this critical area.
3. Evolving risk management paradigms
The construction industry is inherently risk laden. As we progress through 2025, the approach to risk management will have evolved yet again. The adoption of predictive analytics and risk assessment technologies will allow stakeholders to foresee potential issues before they materialise, leading to more proactive risk management strategies. We will work closely with risk management professionals to develop legal strategies that account for these predictive insights.
Moreover, as contracts evolve to incorporate new technologies, legal frameworks around liability for unforeseen circumstances will become pertinent issues. We need to balance traditional contract law principles with innovative risk allocation provisions that are fair and equitable. The challenge lies in drafting clear, enforceable contracts that legitimately assign risks while promoting collaboration rather than confrontation among stakeholders.
4. Enhanced focus on dispute resolution
As projects become more complex and stakeholder interactions more interconnected, traditional litigation often proves to be distracting, inefficient and costly. A marked shift towards Alternative Dispute Resolution methodologies continues to be the preferred means of resolving construction disputes. These approaches not only provide cost-effective resolutions but also foster a spirit of collaboration, conducive to preserving business relationships.
5. Globalisation of construction law
The construction industry will continue to globalise, connecting stakeholders across borders and facilitating international projects. As this trend accelerates, we find ourselves navigating a myriad of legal regimes and cultural considerations. The ability to understand and reconcile varying laws, standards and practices is an essential conflict of laws skill.
The future of construction law in 2025 is not merely a continuation of the past; it represents a dynamic evolution influenced by technology, sustainability, risk management and increasing globalisation. Legal professionals in this arena must embrace change, develop new competencies and foster a spirit of collaboration to successfully navigate an increasingly complex and interconnected world. As these trends unfold, the role of construction lawyers will become more critical, shaping the foundations of a sustainable, innovative construction industry for years to come.
I think you will agree the articles in this Review illustrate that the construction landscape is rapidly evolving in response to climate change and sustainability, and national and international requirements. Exciting times!
Fenwick Elliott is here to help.
- 1. https://www.building.co.uk/building-the-future/building-the-future-commission
- 2. https://www.building.co.uk/building-the-future
- 3. See https://global.lockton.com/gb/en/news-insights/biodiversity-net-gain-what-is-it-and-how-will-it-affect-your-business by Ben Smith and Oliver Weisemann.
- 4. Morningstar Inc.
- 5. Things like Building Regulations Part L address energy efficiency in new homes, extensions and commercial buildings in England, mandating a 31% improvement in carbon emissions as of 15 June 2022. They amount to a crucial step toward achieving a 75–80% carbon reduction by the Future Homes Standard in 2025, aiming to enhance energy efficiency, reduce costs, and promote environmental sustainability.
- 6. Since 1 July 2024, RICS members must follow the 2nd edition of the whole life carbon assessment (“WLCA”) standard’s requirements when completing a WLCA and record any deviations from the standard, as part of the assessment
