The Dawn Of A New Age For Digital Dispute Resolution

LawtechUK initiative's UK Jurisdiction Taskforce, chaired by Sir Geoffrey Vos, master of the rolls, have promoted a set of Digital Dispute Resolution Rules.

The dawn of a new age for digital dispute resolution

What just happened?

LawtechUK initiative's UK Jurisdiction Taskforce, chaired by Sir Geoffrey Vos, master of the rolls, have promoted a set of Digital Dispute Resolution Rules.

What does this mean?

The rules are intended to provide a framework to keep digital asset disputes out of court, providing a set of rules to deal with such disputes in a faster, more cost effective manner. Chairman Sir Geoffrey Vos said: '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.'

The demand for such rules has grown in recent years as more businesses adopt the use of digital assets within their conduct of business. With Jenifer Swallow LawtechUK Director at Tech Nation commenting that ‘The smart contracts market alone is set to reach $345.4 million by 2026.Methods of dispute resolution must keep pace.’ A large-scale corporation already regularly utilising smart contracts is JP Morganand it is not hard to see why with the wide ranging business benefits of smart contracts, “‘including enhanced security, improved efficiencies, and cost reduction in the implementation (and automating performance of) contracts between parties.”Therefore as the use of such digital assets gains popularity amongst businesses, the rules will provide much needed clarification and guidance as to how to settle any disputes that may arise.

How does this impact the legal sector?

Importantly the rules will allow parties to resolve their disputes by an arbitrator, rather than applying for resolution through the courts.They should therefore reduce the need for lengthy and costly court claims as the rules would allow for the appointment of an independent tribunal to rule on dispute matters, and any decision made by the tribunal would be legally binding. This provides a clear and accessible resolution to disputes relating to digital assets meaning businesses can feel more confident in utilising these assets within their operations.

The rules are also easily incorporated into contracts, digital asset or digital asset system by simply including the text “Any dispute must be resolved in accordance with the digital dispute resolution rules of the ‘UKJT’ ”.This simple legal application of the rules will be attractive to businesses who can feel confident that should any disputes arise, the framework to resolve them can be easily invoked.

In addition, the rules have been drafted to provide maximum flexibility to adapt to as yet undeveloped technologies. With the report clarifying that the rules are to apply to ‘cryptoassets, smart contracts or any novel digital technologies’,recognising the need to remain flexible to keep up with the ever changing technological landscape. The flexibility of the rules and their practical application to crypto assets and smart contracts is also reflected in the rule providing an option for anonymity retaining some of the anonymity offered by blockchain technology.

 

The Legists Content Team

Written by Gabriella Cinotti

#Penningtons Manches LLP#Gelbergs#EIP#Lewis Silkin#Wiggin#Ganguin Samartin#Taylor

Wessing#LinkLaters

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