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Blockchain: The importance of reducing legal uncertainty

Posted on 17 August 2020

Ahead of London Tech Week 2020 and the release of The TLA Blockchain Legal and Regulatory Group and Law Society Guidance, Associate and Co Lead of the Blockchain Group Anne Rose discusses the importance of reducing legal uncertainty concerning distributed ledger technology (DLT) with Simon Davis, President of The Law Society.  

Anne Rose founded the Tech London Advocates Blockchain Legal & Regulatory Working Group in 2018 and has since been working on Guidance to set out suggested best practice for legal practitioners working on transactions involving Smart Legal Contracts and solutions to anticipated problems.

The Guidance sets out some key issues for legal practitioners to be aware of when advising on DLT-related matters such as commercial applications, smart contracts, data governance, blockchain consortia, data protection and security, intellectual property, dispute resolution and cryptoassets. The Guidance also identifies some areas in which further guidance is required from regulatory authorities or other bodies.

The Guidance will be released on Monday 7 September 2020 at 8am and will be accessible on the Resources – Research Page and LawTech Page on the Law Society's website.

On the same day as the launch of the Guidance, Anne will be moderating a panel of LawTech and DLT experts, including Sir Geoffrey Vos, Chancellor of the High Court and Chair of the UK Jurisdiction Taskforce, to discuss the key aspects of the report. If you would like to register for this event, please click here.

Anne Rose

Welcome. I’m Anne Rose, Co-lead of the Blockchain Group at Mishcon de Reya and Founder of Techland and Advocates, Blockchain’s Legal and Regulatory Group. Today, I’m delighted to be joined by Simon Davis, President of the Law Society and we’re here to discuss distributed leisure technologies and its impact on the legal profession. I see 2020 as a breakthrough year for distributed leisure technologies. Organisations that have historically been slow to embrace change, lawyers included, are now of necessity making great strides to innovate and are looking to emerging technologies such as Blockchain to help them do so. So what do you think are the main factors which could result in a proliferation of Blockchain Applications.

Simon Davis

I don’t see what’s happening right now and I don’t see the factors right now as leading to a massive revolution. But what I do see is that what we already had to an extent, now there’s going to be a massive impetus into using them properly as the legal sector in terms of its contribution to the GBP/GBA of this country, whichever acronym you want. We’re now heading towards – perhaps even exceeded – some £60 billion. We want to make sure that as we come out of this crisis, that people stand back and look at what we’re doing in this jurisdiction and say, ‘Is this a jurisdiction which is using technology, using Blockchain, using distributed leisure’s most effectively for its clients?’ and if we get that right, and the answer is yes, then I think the future for the profession and our clients looks extremely rosy.

Anne Rose

One of the points that came out from PWC’s recent global Blockchain survey, it identified regulatory uncertainty as one of the single biggest barriers to adoption of some of these technologies, including Blockchain, for its respondents.

Simon Davis

The Law Society consistently carries out all kind of surveys to work out what sounds a bit hackneyed, what opportunities and challenges there are and in relation to distributed systems then regulatory uncertainty was right up there which may be preventing development and adoption of the technologies. I think it was very welcome in relation to the work which Geoffrey Vos and his team did so far as crypto-assets are concerned. What was enormously helpful was to say, ‘This is another class of asset’.

Anne Rose

Yes.

Simon Davis

And that you can see they already have a regulatory regime and a legal regime which is perfectly able to deal with one of the consequences and risks in relation to the exploitation of various kinds of assets.

Anne Rose

And I notice as well, you mentioned Sir Geoffrey Vos and one of the things that he’s noted, in my view rightly, is that Lawyers need to become familiar with concepts such as distributed leisure technologies, smart legal contracts and crypto-assets. Both conceptually and functionally. But do you think that Lawyers should be considering for instance to learn to code or anything else and how important do you think it is that Lawyers adopt new technologies?

Simon Davis

No, I wouldn’t think that it’s necessary for the Lawyer of the future, for example, to start going on coding courses but the main point is you must make sure as a Lawyer, if you are on the transactional side you must be able to understand how the constituents parts work and what are going to be the risks, uncertainties and obviously the advantages of that particular piece of kit? You cannot say, ‘Well, this is all very interesting, I don’t really understand how it works.’ So, therefore make sure you understand how the technology works and what it can do for you even if you might not be the person who might not be inputting and designing. 

Anne Rose

How important do you think it is that Lawyers should be adopting new technologies?

Simon Davis

Certainly, you would expect any modern Lawyer to be doing two things. The first is to be making the use of technology to support the service they are supplying. But also then starting to look at what kind of technologies you have which are perhaps more loosely under the banner of AI. I can certainly see a future if not a present where Lawyer’s machines are effectively drafting contracts as part of the team. 

Anne Rose

I think that’s the key thing though, as part of a team, I don’t think machines are going to be able to do it themselves.

Simon Davis

Lawyers will always be needed as long as Anne, Lawyers remember that they’re not robots.

Anne Rose

Yes, exactly.

Simon Davis

What is the value you’re adding which a robot cannot? Such as, empathy – putting yourself in the shoes of the client.

Anne Rose

And do you think that the pace at which technology’s going at could revolutionise how we practise as Lawyers?

Simon Davis

The revolution which we’re going to have now is people analysing their practices and working out, ‘What part of my service requires me to have a relationship – human relationship, empathetic relationship – with the client?’ And then work out in terms of your revolutionise which parts of your practice can and should be done by machines or indeed by human beings who may not actually need to be anywhere near the office. What you want – if you – from a good Lawyer, first of all is a Lawyer who listens and as part of that – the guide. Who is so important because it means the Lawyer won’t need to waste time by worrying about missing something.

Anne Rose

Yes.

Simon Davis

That the guide will be crucial for them them as a guide but also as reassurance. 

Anne Rose

I would like to thank Simon for his time. It’s been a really interesting discussion and I hope this inspires you all to go and read the guidance.

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