The UK Jurisdiction Taskforce of LawtechUK, chaired by Sir Geoffrey Vos, Master of the Rolls, has today published its Digital Dispute Resolution Rules designed to enable faster and more cost effective resolutions to legal disputes relating to novel digital technology such as crypto assets, smart contracts, and blockchain applications, and foster confidence amongst businesses in the adoption of these technologies.
The use of these technologies in business has rapidly gained in popularity in recent years. JP Morgan, for example, is just one of many large-scale corporations already regularly taking advantage of the use of smart contracts (self-executing contracts run on blockchain technologies that automatically process transactions without the need for a third-party). The business benefits of smart contracts are wide-ranging, including enhanced security, improved efficiencies, and cost reduction in the implementation (and automating performance of) contracts between parties.
However, 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.
Drafted in extensive public and private consultation with lawyers, technical experts and financial services and commercial parties, the Digital Dispute Resolution Rules published today are designed to facilitate the rapid and cost effective resolution of disputes arising in the context of these technologies, and to foster industry confidence in their use.
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). 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.
The UK has been at the global forefront of developing the legal infrastructure to support the deployment of these nascent and evolving technologies. In November 2019 the UKJT published its well-received legal statement on the status of cryptoassets and smart contracts under English and Welsh law. The legal statement was a significant step by the UK towards legal certainty for blockchain technology and crypto assets. Furthermore, English law provides an established and familiar framework by reference to which rights in respect of digital technologies can be effectively established and enforced, and has an impressive track record of dealing with and adapting to technological developments.
The UKJT will keep a close watch on how the Digital Dispute Resolution Rules are used, and will aim to consider whether further development or revision would be valuable within the coming year, based on user feedback.
The Digital Dispute Resolution Rules
The Rules are available for download here.