In recent years, “smart contracts” have started to enter conversations across the Gulf construction industry. From Doha to Riyadh, they’re being touted as the next big step in digital transformation—promising faster payments, cleaner records, and fewer disputes. It’s an exciting concept. But it also raises a key question for consultants and project leaders alike:
Will smart contracts change how construction claims are handled—or make them disappear altogether?
If you are involved in construction claims and contract strategy in the Gulf, maybe you have noticed that we are standing at a turning point. But the reality is more nuanced than the headlines suggest.
Why the Gulf Is Paying Attention
The region is primed for digital disruption. Countries like Qatar, the UAE, and Saudi Arabia are pushing ahead with large-scale infrastructure programs—many involving complex international stakeholders and massive risk exposure. At the same time, clients are increasingly under pressure to improve governance, transparency, and delivery timelines.
Smart contracts: self-executing agreements built on blockchain, designed to automate actions when certain conditions are met. Imagine:
- A payment that’s automatically released when a certified milestone is submitted
- A variation captured and recorded in real time as soon as the site instruction is issued
- A full log of correspondence that’s tamper-proof and time-stamped
This kind of automation could, in theory, streamline contract administration and reduce the root causes of many claims.
But Construction Is Still Human—and Messy
Here’s where things get interesting. Claims in construction aren’t just about whether a task was completed or a delivery was made. They’re about why something was delayed, how instructions were communicated, and what the contract actually entitles each party to.
These nuances are especially prominent in the Gulf, where:
- Changes to the contract documents are often issued late or evolve during the project
- Decision-making involves multiple layers, sometimes across borders
- Variations, verbal instructions, and scope creep are part of everyday site realities
- Payment delays aren’t always about system failure—they're often about approvals, risk aversion, or budget controls
So even if every instruction is digitally recorded and every payment clause is coded into a smart contract, claims will still arise. What changes is how those claims are documented, argued, and resolved.
Smarter Claims, Not No Claims
In the future, we won’t be eliminating claims—we’ll be managing them differently. Here’s how smart contracts will change the playing field:
- More Evidence, Less Ambiguity: Claims consultants will work with digital audit trails, not just email threads or scanned site diaries.
- Automated Triggers, but Interpreted Outcomes: A smart contract might log a delay instantly—but someone still needs to assess if it's excusable, compensable, or neither.
- Real-Time Accountability: Instead of reconstructing events months after the fact, we’ll have a clearer digital timeline, making it easier to establish cause and effect.
The role of claims experts won’t diminish—it will shift toward strategic interpretation, digital forensics, and early advisory.
The Opportunity for Forward-Thinking Organizations
In a groundbreaking move to transform contract and project management, Ashghal is spearheading the 'smart contracts' initiative, announced as part of its ambitious five-year plan. This plan, valued at 81 billion Qatari rials (approximately $22 billion), will see the implementation of crucial infrastructure projects across multiple sectors. The smart contracts initiative is designed to enhance transparency, improve reliability, and significantly reduce costs and human error by leveraging cutting-edge digital technologies in contract management. This development represents a significant industry shift, perfectly aligning with Qatar’s National Vision of fostering innovation and sustainability.
For companies operating in Qatar, this shift offers a valuable opportunity. By adopting these technological advancements early—especially as the country moves beyond the World Cup and continues its path of economic expansion—businesses can secure a competitive advantage in a rapidly evolving marketplace. Embracing smart contracts today not only positions companies for success but also places them at the forefront of the next phase in industry transformation. It’s not just about adopting blockchain or AI tools. It’s about:
- Building contracts that are digitally compatible but legally sound
- Training teams to manage both data and risk
- Integrating smarter claims strategies that align with automated systems
- Establishing internal procedures that match the external pace of innovation
At VersaMinds, we collaborate with organizations seeking to modernize while maintaining control—blending technology with contract clarity and innovation with accountability.
Final Thought
Smart contracts are not a silver bullet—but they are a sign of where the industry is heading. In the Gulf, where construction is bold, fast-moving, and complex, the real winners will be those who combine digital tools with practical wisdom.
Construction claims aren’t going anywhere. But with the right strategy, they might just become smarter and faster.