Why Litigation Funding Is the Backbone of GCC Disputes in 2025
Executive Summary
The GCC is transitioning from an announcement-heavy decade to a delivery-first era. Projects haven’t stopped — they’re maturing. With this shift comes a spike in complex, high-value construction disputes driven by delays, variations, and cost overruns. In this capital-disciplined environment, non-recourse litigation funding has become the strategic backbone for contractors, developers, and investors: preserving liquidity, transferring litigation risk off balance sheet, and converting meritorious claims into financial leverage. With DIFC and ADGM leading on regulation — and regional arbitral institutions formalizing disclosure rules — the GCC now has the legal infrastructure to support funded dispute resolution at scale.
1) The 2025 Reality: From Announcements to Execution
After years of unprecedented growth, the GCC project market is recalibrating. New awards have slowed as governments phase capex and prioritize delivery and quality. Saudi Arabia — engine of the regional pipeline — has deliberately moderated the release of contracts for its giga-projects (NEOM, Red Sea, Qiddiya), signalling a pivot from vision to execution. The UAE remains a standout, sustaining investment across luxury real estate, aviation, and transport (e.g., Al Maktoum International expansion, major metro works).
Two trends define this phase:
- Capital efficiency is king. When awards slow, every dirham tied up in a dispute hurts more. A single stalled, high-value claim can cripple cash flow, impair bonding capacity, and derail bidding for the next package.
- PPPs reshape risk. Governments de-risk public balance sheets by shifting delivery and financing risk to the private side. That makes disputes (variations, unforeseen conditions, financing failures) more consequential for contractors, lenders, and sponsors.
Implication: Businesses need an external, non-recourse instrument to pursue entitlements without sacrificing working capital or triggering liquidity stress.
2) The Anatomy of GCC Construction Disputes
Disputes in the region are rarely one-dimensional. They are multi-party, document-heavy, and quantum-driven. The recurring drivers:
- Time & cost overruns: Schedules that prove unrealizable; decisions that bottleneck approvals; late payments cascading down supply chains.
- Contract risk allocation: Ambiguity in clauses on extensions of time, concurrent delay, force majeure, and change control.
- Execution pressures: Financing constraints, manpower shortages, supervision gaps, and design-development churn.
- Unforeseen conditions: Ground risk, utility clashes, extreme weather — often without robust risk-sharing mechanisms.
On billion-dollar schemes, even “modest” slippage produces nine-figure claims. Quantum analysis (prolongation, disruption, acceleration, head office overheads) is as critical as schedule-forensics — and both are expensive to prosecute properly.
3) What Litigation Funding Actually Solves
Litigation funding (third-party funding) is non-recourse capital advanced to a claimant to cover legal fees, experts, tribunal costs, security for costs, and enforcement. If the case loses, the claimant owes nothing. If it succeeds, the funder receives an agreed share of proceeds.
For construction stakeholders, that delivers four decisive advantages:
- Balance-sheet protection
- Removes unpredictable legal spend from P&L.
- Preserves bank lines and bonding capacity for delivery.
- Monetisation & optionality
- Converts a contingent claim into a strategic asset (with potential for partial upfront monetisation).
- Creates leverage for structured settlements and cash-flow solutions.
- Level playing field
- Neutralises “war-of-attrition” tactics by well-financed counterparties.
- Funds the expert firepower (programming, quantum, delay, forensic accounting) needed to prove entitlement.
- Governance & signalling
- Independent due diligence by the funder validates claim strength.
- Signals to the market (and the counterparty) that the claimant can run the distance.
4) Where the GCC Is Ready: DIFC, ADGM & Regional Arbitration
The UAE’s dual system enables best-in-class structuring:
- DIFC & ADGM (common law) have codified litigation funding frameworks (practice directions and funding rules), with pillars such as written agreements, disclosure of funding, and limits on funder control.
- Onshore UAE (civil law) generally permits funding; arbitration costs-recovery and Sharia-compatible, risk-sharing structures make funded models workable.
- SCCA, QICCA and other regional centres increasingly require disclosure of funding, improving transparency and tribunal oversight.
Bottom line: The GCC now offers the regulatory clarity global capital needs to underwrite complex, cross-border construction disputes, while keeping control of settlement and strategy with the client and counsel.
5) Use Cases We See Every Week
- Variations & scope growth
Funding the expert-heavy claims (design changes, late IFCs, acceleration orders) that contractors cannot self-finance without starving site operations. - Delay & disruption (EOT + costs)
Underwriting schedule/quantum teams to establish causation, concurrency, and entitlement — from baseline integrity to as-built analysis. - Payment & termination disputes
Enforcing milestone/non-payment and wrongful termination claims, including security for costs and asset-tracing for enforcement. - PPP disputes
Backing sponsors and lenders when risk transfer collides with unforeseeables, force majeure, or governmental change. - Supply chain & JV fallouts
Supporting subcontractors and JV partners in pass-through claims or contribution/indemnity fights without strangling cash flow.
6) For Whom This Matters — And Why
- Contractors & developers
Turn strong claims into liquidity; avoid starving projects of cash; maintain bidding cadence. - Lenders & investors
Protect debt service and equity value; prevent value-destructive write-offs caused by unresolved disputes. - In-house legal & project controls
Reposition legal from a cost centre to a value engine; integrate funded claims into project recovery and portfolio strategy. - Outside counsel
Grow mandate scope on a funded basis; align economics with client outcomes; access top-tier experts without client pre-funding.
7) Guardrails: Ethics, Control & Disclosure
Sophisticated funding keeps strategy and settlement control with the client and counsel. Agreements should:
- Enshrine client primacy over settlement.
- Protect privilege/confidentiality (NDA; common-interest mechanisms).
- Disclose funding per forum rules (tribunal/court and counterparty).
- Address adverse costs and security for costs up-front.
These guardrails are not a burden — they’re the reason institutional funding is welcomed by tribunals and accepted by counterparties.
8) Why 2025 Is the Turning Point
Three forces converge this year:
- Market structure: Fewer new awards; execution intensity; PPP risk transfer.
- Dispute economics: Larger, data-heavy claims where expert costs are decisive.
- Enabling regulation: DIFC/ADGM clarity; arbitral disclosure norms; rising costs-recovery discipline.
Put simply: self-funding large disputes is no longer efficient capital allocation. Non-recourse funding is.
WinJustice: How We Help (ADGM/DIFC Aligned)
- Non-recourse capital covering counsel, experts, tribunal costs, and enforcement.
- Case or portfolio structures aligned to your pipeline (single dispute, multiple claims, or programme-wide facility).
- Speed & certainty through disciplined due diligence and clear term sheets.
- Enforcement focus (security for costs, asset-tracing, cross-border recovery).
- Client control preserved — strategy and settlement remain with you and your counsel.
Conclusion: The Backbone of Resilient Delivery
The GCC’s construction cycle has entered its most demanding chapter: delivery at scale, under real time and cost pressure. In this chapter, litigation funding is not a niche accessory — it is the backbone that keeps capital free for execution while enabling parties to vindicate their contractual rights. Funded disputes don’t distract from delivery; they protect it. In 2025, that is the difference between surviving the cycle — and leading it.