Construction's top lawyers discussed the Contracts (Rights of Third Parties) Bill at a meeting organised by the Construction Industry Council on Monday.
The bill is awaiting committee stage in the House of Lords and could be in force by autumn.
Before then, however, the CIC is hoping to force amendments that could see construction contracts exempt.
The bill reforms the law of "privity of contract", whereby a contract can only be enforced by parties to it.
In construction, this could mean that clients may receive claims directly from subcontractors. The CIC fears that third parties would also have to give their consent to variations in contracts, which it says would be "unworkable" in construction.
CIC chief executive Graham Watts said: "Top lawyers say every contract will have to be looked at as a bespoke contract, with clauses inserted to protect parties to the contract from third party liabilities.
"The bill simply does not work when its terms are applied to construction. Its effects could be a legal nightmare. It cannot be right that everyone in construction should need a lawyer at their side whenever they enter into a contract." The CIC wants to use the definition of "construction" in the 1996 Construction Act to define the contracts that should be exempt from the new law.
Top City lawyer and Macfarlanes partner Tony Blackler said: "This just isn't appropriate for construction. Lawyers will love it because there will be extra work for them, but that's not to say it's right."
