The legal sector faces an enormous challenge in the way it navigates the change needed for client satisfaction and success. Changing attitudes and expectations around customer service, advancements in technology and the shifting legal landscape place new pressures on the client/lawyer relationship. The pressure is on to integrate technology into the practice of law.
Consumers want easy access and immediate results with an expectation of the type of innovation they see in other areas of business while, at the same time, the UK government continues to expand its interpretation of UK legislation around digital assets, delivery and evidence.
There is no arguing that digital has changed the way we help clients interact with the law. This is further complicated by the rapid acceleration of technology used in both business and law settings. As technology and client demands change, the overarching challenge to law firms is to navigate how technology is used to provide services while, at the same time, protecting sensitive client data.
Introducing the LawTech Delivery Panel
The LawTech Delivery Panel (LTDP) is an industry-led, government-backed initiative, established to support the transformation of the UK legal sector through technology. The LTDP is focused on identifying and addressing the most pressing barriers as well as catalysts for growth of the legal sector.
In order to do this LawTech Delivery Panel created a UK Jurisdiction Taskforce (UKJT), which carried out a consultation to identify the key questions that needed to be answered around cryptoassets and smart contracts – two particularly challenging aspects of using tech in law.
Purpose of the consultation
The objective of the consultation was to provide a solid foundation for what the LTDP’s report calls : “market confidence and a degree of legal certainty.” The taskforce addressed this by considering a number of legal questions concerning areas of perceived uncertainty.
Following the consultation, November 2019, UKJT published a legal statement that concluded: “As a matter of English law, cryptoassets have all the legal characteristics of property and as such, should be treated in principle as property.” The Legal Statement describes five key characteristics of a cryptoasset: intangibility, cryptographic authentication, use of a distributed transaction ledger, decentralisation and rule by consensus.
What is property and why does it matter?
The Legal Statement further notes that one of the fundamental aspects of property is “ownership”, and that cryptoassets are capable of being owned. Whether English law would treat a particular cryptoasset as property ultimately depends on the nature of the asset, the rules of the system in which it exists and the purpose for which the question is asked.
Should smart contracts be treated as contracts for legal purposes?
UKJT’s statement also looked at smart contracts, addressing the question: “‘In what circumstances is a smart contract capable of giving rise to binding legal obligations, enforceable in accordance with its terms?”
The report was described by Sir Geoffrey Vos, the Chancellor of the High Court, and member of UKJT, as a “watershed” and something that no other jurisdiction has attempted.
Delivering growth to LawTech
British technology firm Tech Nation was appointed to deliver on the objectives outlined in the report by deploying funding of £2 million allocated by the Ministry of Justice to help fuel the growth of LawTech. Jenifer Swallow, former General Counsel at several leading UK tech companies and director of the LawTech Delivery Panel, is leading the executive delivery.
Swallow comments: “The worldwide smart contract market is expected to reach $300m by 2023 and the World Economic Forum predicts 10% of global GDP will be stored on the blockchain by 2027. It is great to see the adaptability of our common law system to fast-changing technology, demonstrated in this landmark legal statement from the UKJT.”
What does this mean to law firms?
This is a time of unprecedented challenge and opportunity for the field of law, an opportunity to expand beyond the traditional concepts of law and reap the benefits of incorporating technology into the practice of law be that improving productivity, offering more individualised attention to clients, streamlining practices, increasing profit, promoting access to justice or all of the above.
If you would like advice on how to incorporate digital business automation into your firm, feel free to contact us at AUTTO.