The UK Jurisdiction Taskforce of LawtechUK has today published its Digital Dispute Resolution Rules designed to enable faster and more cost effective resolutions to disputes relating to crypto assets, smart contracts, and blockchain applications, and to ‘foster confidence amongst businesses in the adoption of these technologies’.
The rules are downloadable here.
One important feature of the Rules is that they allow parties to resolve their disputes by an arbitrator, rather than by a judge in court, which can be a more time-consuming and costly process, the group adds. They have also been drafted to provide maximum flexibility to adapt to as yet undeveloped technologies, and to reach a resolution to disputes quickly and efficiently by arbitrators with appropriate technical expertise and enabling on-chain implementation of decisions, they said.
The group, which is funded by UK taxpayers, noted that: ‘Until now, there has been little consistency in how legal disputes relating to these types of technologies should be resolved, leading to lengthier and more costly processes.’
The rules have been drafted in public and private consultation with lawyers, technical experts and financial services and commercial parties.
Master of the Rolls, Sir Geoffrey Vos, chair of the UK Jurisdiction Taskforce and LawtechUK Panel member, commented: ‘I am delighted to welcome the publication by the UK Jurisdiction Taskforce of the ground-breaking Digital Dispute Resolution Rules. International business is rapidly adopting the use of digital documentation and on-chain smart contracts.
‘The Rules aim to provide a process for speedy and cost-effective resolution of disputes originating digitally. They will hopefully give global businesses greater confidence to adopt and utilise new digital technologies.’
Jenifer Swallow, LawtechUK Director at Tech Nation, added: ‘Analogue ways of doing business will be widely restructured and digitised in the coming years, increasing efficiency and transparency.
‘The Digital Dispute Resolution Rules are a step change in that evolution and in enabling wider confidence and adoption of these technologies – underpinning those readily-available today and capable of adapting to those yet to be developed. This is an exciting next step in the UK’s leadership at the forefront of business, law and technology, and also demonstrates how simple legal processes can be.’
The members of the UK Jurisdiction Taskforce (UKJT) are:
- Sir Geoffrey Vos, Master of the Rolls and Chair of the UKJT
- Lawrence Akka QC, Twenty Essex
- Sir Nicholas Green, Chair of the Law Commission of England and Wales, as an observer
- Richard Hay, Linklaters LLP
- Peter Hunn, Accord Project
- Mary Kyle, City of London Corporation
- Matthew Smith, Financial Conduct Authority
- Sir Antony Zacaroli, Justice of the High Court
The drafting team:
- David Quest QC, 3 Verulam Buildings
- Lawrence Akka QC, Twenty Essex
- Anne Rose, Mishcon de Reya
- Dorothy Livingston, Herbert Smith Freehills
- Rory Conway, Linklaters
- David McilWaine, Pinsent Masons
Comment: Artificial Lawyer applauds the efforts to support the use of smart contracts, which in terms of actual ‘complex smart contracts’ drafted by law firms, remains a very small and still barely visible niche in the real world – but it could grow in the future.
However, according to Bitcoin Prime notes, the group’s notes mention that the ‘worldwide smart contract market is expected to reach $345.4 million by 2026‘ – this may be the case when it comes to very simple transactional cryptocurrency uses, e.g. trading crypto assets – which is a huge market, but the real total value related to complex legal documents for anything beyond cryptocurrency trading that have a coded ‘smart contract’ element, likely is a very small part of that total.
Overall, this seems to be about helping the UK to be a centre for disputes related to major commercial spats over crypto ownership, i.e. of benefit to a very limited number of specialist lawyers and also a relatively small number of large businesses that trade crypto assets. Will taxpayers and the wider legal community, and their clients, really benefit from these rules? Perhaps, but it remains to be seen.