The global business environment in 2026 is characterised by an unprecedented convergence of geopolitical instability, regulatory complexity, and technological transformation. According to the latest Global Disputes Forecast published by Baker McKenzie, organisations across the world are bracing for heightened disputes risk driven by these overlapping pressures. The findings reveal a corporate landscape in which legal exposure is no longer confined to traditional commercial disagreements but is instead shaped by cross-border tensions, digital vulnerabilities, and evolving policy frameworks.

A Fragmented Yet Interconnected Global Economy

Modern multinational enterprises face a striking paradox. While globalisation has fostered deeper interconnectivity across markets, supply chains, and data systems, geopolitical fragmentation is simultaneously undermining stability. As articulated by Sunny Mann, the very integration that once served as a buffer against risk has become a source of vulnerability. Supply chains now traverse politically contested regions, data flows encounter sovereignty restrictions, and commercial relationships may rapidly transform into compliance liabilities as international alliances shift.

This tension is reflected in the survey’s findings, with 79 per cent of respondents identifying tariffs, sanctions, and export controls as key drivers of disputes risk. Furthermore, 82 per cent express concern about becoming subject to cross-border or multi-agency investigations in 2026, highlighting the increasing entanglement of legal exposure with geopolitical developments.

Escalating Geopolitical Pressures and Global Conflict

The heightened sense of legal and operational risk is rooted in a volatile geopolitical backdrop. Major conflict zones continue to disrupt global stability, most notably the ongoing war involving Iran, Israel, and the United States, which has severely affected maritime trade routes such as the Red Sea and the Strait of Hormuz. The resulting energy price volatility has reverberated across global markets.

Simultaneously, the protracted Russia-Ukraine conflict remains a critical source of disruption, contributing to instability in energy and agricultural supply chains and raising the prospect of long-term territorial division. In the Asia-Pacific region, strategic competition over semiconductors, critical minerals, and key shipping lanes continues to intensify, particularly in the South China Sea.

These developments underscore a broader shift towards “securonomics”, in which economic policy is increasingly aligned with national security objectives. Protectionist measures, including tariffs and export controls, are fragmenting global trade and introducing new layers of contractual and regulatory uncertainty.

Technology and Cybersecurity at the Forefront

Among all categories of disputes risk, cybersecurity and data privacy have emerged as the most prominent. Eighteen per cent of surveyed organisations identify this area as their greatest disputes risk, with a further 17 per cent highlighting it as the leading source of investigations. This reflects the rapid digitisation of business operations and the growing sophistication of cyber threats.

Governments worldwide are responding by introducing stringent regulatory frameworks designed to safeguard critical infrastructure and national security. Measures such as the European Union’s NIS2 Directive and similar legislative initiatives in the United States and Asia impose rigorous reporting obligations on organisations in sectors such as energy, healthcare, and finance. While these frameworks aim to enhance resilience, they also increase the likelihood of regulatory scrutiny and enforcement actions.

The rise of artificial intelligence further compounds these risks. Concerns regarding algorithmic bias, liability, and misuse are contributing to a growing category of AI-related disputes, reflecting the challenges of governing emerging technologies within existing legal frameworks.

Tax Complexity and Regulatory Scrutiny

Tax has emerged as the second most significant area of concern for both disputes and investigations. This is largely attributable to the increasing complexity of cross-border tax compliance and the implementation of new international standards. In particular, the global minimum tax initiative under Pillar Two of the Organisation for Economic Co-operation and Development introduces additional layers of compliance, reporting, and enforcement.

As jurisdictions seek to incorporate these global standards into domestic legislation, inconsistencies and administrative challenges are likely to give rise to disputes. Multinational enterprises must therefore prepare for heightened scrutiny, particularly in areas such as transfer pricing and the interpretation of divergent accounting standards.

Resource Constraints and Organisational Vulnerabilities

Despite the growing scale and complexity of disputes risk, many organisations remain under-resourced. The survey indicates that 38 per cent of respondents consider their disputes budget for 2026 to be inadequate. This financial constraint limits their ability to conduct thorough investigations, engage specialised legal counsel, and respond effectively to multiple concurrent disputes.

In addition to budgetary pressures, organisations face significant challenges in keeping pace with rapidly evolving regulatory environments. Over half of respondents identify regulatory complexity as a key barrier to litigation preparedness, while nearly half cite supply chain vulnerabilities as a persistent concern.

The Rise of Cross-Border Investigations

Cross-border investigations represent one of the most pressing threats in the current environment. The increasing coordination between regulatory authorities across jurisdictions has heightened the risk of simultaneous investigations, requiring organisations to navigate complex legal and procedural requirements.

However, there remains a notable gap between awareness and preparedness. While the majority of organisations anticipate such investigations, many lack the necessary capabilities in areas such as data preservation, forensic analysis, and cross-border coordination. This disconnect underscores the need for enhanced investment in legal infrastructure and risk management strategies.

Supply Chain Disruption and Market Volatility

Operational resilience continues to be tested by persistent supply chain disruptions. Geopolitical instability, including attacks on shipping routes and regional conflicts, has increased transportation costs and forced the rerouting of critical trade flows. These disruptions not only affect profitability but also give rise to contractual disputes and claims related to force majeure and non-performance.

At the same time, global markets are experiencing heightened volatility across equities, bonds, and digital assets. Energy security concerns, particularly in the Middle East, have contributed to sharp price fluctuations, further complicating the operating environment for multinational businesses.

Strategic Responses and the Role of Diversification

In response to these multifaceted risks, organisations are increasingly adopting diversification strategies. By spreading exposure across multiple supply chains, markets, and partners, businesses aim to mitigate the impact of geopolitical shocks and regulatory changes. This approach reflects a broader shift towards resilience and adaptability in an uncertain global landscape.

International arbitration remains a vital mechanism for resolving cross-border disputes, offering neutrality and enforceability. Nevertheless, it too faces evolving challenges, particularly in relation to digital transformation, cost management, and geopolitical considerations.

Conclusion

The disputes landscape in 2026 is defined by complexity, uncertainty, and interdependence. Geopolitical tensions, trade policy shifts, technological advancements, and regulatory developments are converging to create a high-risk environment for multinational organisations. As highlighted by Baker McKenzie, businesses must navigate this terrain with a combination of strategic foresight, operational resilience, and legal preparedness.

Ultimately, success in this environment will depend on an organisation’s ability to anticipate emerging risks, allocate resources effectively, and adapt to a rapidly changing global order. The interplay between geopolitics and commerce is no longer a peripheral concern; it is now central to the management of disputes and the sustainability of international business operations.