Previous studies revealed that Building Information Modeling (BIM) has the potential to reduce project uncertainties, design errors, change orders, and delays, which might facilitate achieving effective dispute management in the construction industry. However, research into the adoption of BIM to holistically enhance effective dispute management is limited compared with the plentiful BIM research in the construction management field. This study explored whether and how BIM adoption can help minimize the chronic problem of dispute in the industry. A structured critical literature review method was employed in this study which involved 102 papers in the fields of BIM and construction disputes. Nine main common causes of disputes (e.g., change order, design error, site problem, contractual problem, payment problem, and delay) and eight primary benefits of BIM application (e.g., improved visual management, design optimization, improved information management, and enhanced collaboration) were identified. A conceptual framework was developed illustrating the mechanism of adopting BIM to facilitate dispute management in the overall life cycle of construction projects. The framework indicates that design error, delay, and change order can be reduced most significantly by most of the BIM benefits, whereas improved visual management, improved information management, and enhanced collaboration are three of the most frequently adopted BIM benefits that can settle the majority of dispute causes. This study contributes to dispute management with a more holistic view of adopting BIM in the life cycle of construction projects, as illustrated in the conceptual framework. In addition, the identified common causes of disputes and primary benefits of BIM application are valuable for on future research in these two areas.