The Master of the Rolls delivered a speech at London International Dispute Week 2022.
Exploring the benefits of digital justice, he explained how embracing the digital environment is essential for dispute resolution to maintain confidence and remain sustainable.
1. The theme of this year’s London International Disputes Week 2022 is “Dispute Resolution: global, sustainable, ethical?”. A year ago today, I spoke to LIDW about what we now call in England and Wales our Digital Justice System and about the changes in what we would be litigating about once the digital revolution truly took hold. It is a good time to take stock.
2. Today, I want to try to explain first the benefits of digital justice to national and international businesses and consumers, and secondly why the rapid uptake of digital technologies will necessitate changes in the way we resolve all kinds of dispute, from the very smallest to the very largest.
3. First, let me say something about what I mean by digital justice to set the parameters. Many lawyers think that the highest pinnacles of digital justice are achieved by using Teams, Webex, Google Meet or Zoom for a dispute resolution hearing, perhaps even involving arbitrators located in different countries. They might also think that the use of e-filing and PDF bundles or a digital document disclosure programme will turn the current systems into state-of-the-art automation of the dispute resolution process. I respectfully disagree. These things are, of course, all fine. But what I mean by digital justice is an entirely smart system that operates online, or even on-chain, to identify and resolve the issues between the parties in a far more streamlined and efficient way than the current pleading-based processes. Judges, arbitrators or experts will still be responsible for the ultimate decision making, but routine or interim processes may be automated and resolved by algorithms, always provided that the parties know what AI is deciding and retain the right of appeal to a human judge.
4. I have been heard to say some of this before. And many have asked: the simple question: why? Why do we need to go further than using technology to replace paper with electronic files, and to allow for remote hearing when it is inconvenient to gather together in one place for a face-to-face hearing? Surely, the well-established common or civilian law procedural processes guarantees the integrity and fairness of the delivery of justice itself. Surely, there is nothing wrong with the way we do things even if we do want to move on from sending things by post or from personal physical service of originating process. These are the questions I am going to try to answer this morning.
The benefits of digital justice
5. The underlying answer to all these questions is business and consumer confidence. But there is more to it than that. Judges, arbitrators and commercial lawyers in London and elsewhere want to do everything they can to make their dispute resolution systems as attractive as they can to their users in general and to the international business community in particular.
6. So the question is how does one make the provision of justice and the dispute resolution process attractive to users. It must be noted immediately that justice is not like other commodities. London has proven over many years that the cheapest, even the quickest, systems are not always either the best or the most sought after. Litigation in London’s Business and Property Courts in general, and specifically in the Commercial Court, can be very costly and can take quite some time, and yet successive generations of international parties have willingly agreed that English law and jurisdiction should govern their contracts and have sought to litigate or arbitrate here. They have done so because they have confidence in the quality of the process, the integrity of the judges and arbitrators available and the of the system itself.
7. Despite the fact that many of you, and certainly I, have grown up with – and perhaps some even love – the Civil Procedure Rules, London arbitration, and the common law itself, there will need to be changes made if that confidence is to be maintained.
8. The dispute resolution processes that are used today are essentially analogue. They can be converted into electronic files, as I have said, but the underlying structure of what is being done to resolve the dispute is analogue. In the adversarial process, we allow the parties to state their case in any form they want, provided it falls within acceptable but very liberal limits. In inquisitorial systems, there is an inquiry into the facts before they are determined, but that inquiry is conducted according to very strict analogue rules as to confidentiality and as to what does and what does not constitute evidence. Both processes were created for an era in which none of the internet, the blockchain nor even computer technology itself existed or was contemplated.
9. If we look for a moment at the current process of dispute resolution from the perspective of someone who has been brought up with the new technologies I have mentioned, a number of questions need to be answered.
10. First, why do we assume in our current systems that the decision-making tribunal knows nothing? As we all know, the internet provides access to a vast database of information. Some of it is, of course, unreliable, but much of it is completely accurate. We no longer need to prove facts that can be established in seconds by accessing the power of the internet. There will, of course, still be some facts to be determined, but many will before long be immutably recorded on the blockchain, and others will not seriously be capable of dispute. In other words, the facts to be found and the way fact finding is undertaken will be quite different in a digital age.
11. The second question is related. Why is so much time spent establishing basic facts that are already recorded on people’s mobile devices, social media communications or photographs, and will again soon be immutably recorded on the blockchain. The present process is directed towards identifying factual and legal disputes, when in most cases readily available data answers at least the factual questions immediately and incontrovertibly.
12. Thirdly, so far as the law is concerned, why do we continue to assume that the applicable legislative and precedential materials are available only to specialised lawyers, when legal databases can provide most, if not all, of the answers very quickly to anyone making an online enquiry. The new publicly available judgment database produced by the National Archives is called Find Case Law and is intended to be accessible to everyone everywhere and to be easy to read on smartphones and tablets. It is at www.caselaw.nationalarchives.gov.uk (external link, opens in a new tab) The same applies to the legislative database produced by The National Archives at www.legislation.gov.uk (external link, opens in a new tab)
13. Digital justice looks at all these questions from the other end of the telescope. It assumes that the decision-making tribunal understands the kind of dispute that it is being asked to resolve and the questions that need to be asked to get directly to the core issues that divide the parties. That issue may be as simple as how fast a vehicle was travelling in a road traffic case or did the parties actually make a contract in a commercial dispute. Either way, digital dispute resolution platforms can identify the question by a series of decision trees and can elicit and distil the relevant evidence even when the source materials are unimaginably voluminous just as is the internet itself.
14. Digital justice will use the smart processes that we use in every other aspect of our lives. Algorithms enable us to buy what we need and want to live, to communicate with our friends, families and work colleagues quickly and efficiently, and most importantly to get a reliable answer to almost any question we have ever thought of asking. We take the information sink that is the internet for granted, but it has actually changed the way people live – simply knowing millions of facts is no longer so valuable in our society – now the value is provided by information and data technology, programming and processing.
15. So, what then are the real benefits of a truly digital justice process to the consumers and businesses for which it is being created.
16. First, new generations brought up with the new technologies will, as I have said, not have confidence in dispute resolution systems that are based on assumptions that are, on analysis, invalid in the only world they know – a world of technology, data, the internet and blockchain.
17. Secondly, neither consumers nor businesses in the modern world will be prepared to pay disproportionate sums to determine either what they already know or can easily be established from the internet or is immutably recorded on the blockchain.
18. Thirdly, a smart digital justice system speaks to those who use their digital devices for literally every other aspect of their lives, whether it is banking, investment, energy supply, communications or medical treatment, to give just a few examples.
19. The fourth and perhaps most important benefit of digital justice systems is to deliver timely outcomes for consumers and businesses at a cost that is properly proportionate to the issues at stake. In essence, the digital justice system will provide access to justice for all. This is something that is more valuable to the economy than is commonly realised. When individuals or businesses are involved in disputes, they are concentrating on those disputes rather than on their work or their businesses. They are less productive. The longer the disputes take to resolve the greater the negative economic and psychological effect.
20. I cannot be interrupted since this is a pre-recorded speech. But I can, at least metaphorically, hear you ask whether the digital justice systems now in prospect will really provide these advantages. The answer is, of course, not immediately. But we need to be ambitious if anything at all is to change. The ambition is clear. Our digital justice system here in England and Wales will allow any civil dispute (whether civil, commercial, family or administrative – i.e. between the citizen and the state) to be initiated and pursued online. The whole process will, as I have said, be directed towards identifying the issues between the parties and the evidence and law available that bears specifically on those issues. The process will embrace algorithms and artificial intelligence whilst acknowledging that parties must have the ultimate right to challenge both the technology and any procedural or machine-made decisions before a human judge.
21. The digital justice system will not need to be told the same things over and over again as happens now. There will be a single data set for each dispute that will travel through the entire lifetime of the case and will not need to be recreated time and time again in endless paper, PDF or Word documents.
22. Finally and perhaps most importantly of all, the digital justice system will allow for integrated mediated interventions to suggest ways of resolving any kind of dispute at every stage. Our current structures make mediation an overly formalistic process, which is normally attempted only once, if at all, in the life of a dispute. The digital justice system will be capable of proposing and progressing consensual solutions at every stage of a dispute, whether in respect of intermediate decision-making or in respect of the overall dispute itself.
23. In the address I gave to this conference last year, I said that the digital dispute resolution system would have advantages for lawyers and litigants alike. I have given many of the reasons already, but the last two are important to repeat. I said then and I say now that it will create a dispute resolution system that will give confidence to overseas investors; as we all know, a healthy and effective justice system in which citizens and business can have full confidence is one of the central tenets of the rule of the law. Inward investment depends on it. I said then and I say now that the new digital justice system will allow solicitors and barristers to concentrate on those cases that are not straightforward and cannot be easily resolved within the online space. Lawyers will continue to earn good fees wherever they add value. Human legal advice will continue to be much needed and hugely valuable in the right kinds of case, just as human judges applying human values will still be needed within the decision-making process.
Why will the blockchain necessitate changes in the way we resolve all kinds of dispute?
24. All I have said thus far is premised on the change from analogue to digital, from paper-based knowledge to the internet. It has not explained specifically why the new digital technologies make the changes I have been discussing all the more urgent.
25. The commercial world is changing fast. Mr John Glen MP, the Economic Secretary to the Treasury, announced at the beginning of April 2022 that the UK Treasury intends to legislate to “bring certain stablecoins into our payments framework … creating the conditions for stablecoin issuers and service providers to operate and grow in the UK”. He said also that the UK Government will be looking at “regulating a broader set of crypto activities including trading of tokens like Bitcoin … and [will be consulting] on a world-leading regime for the rest of the crypto-market too … a regime that will facilitate safe and sustainable, and … rapid, innovation”. John Glen also said in the same speech that English law and UK legal services and courts could play a big part in making the UK an attractive hub for all things digital and for new technologies more generally.
26. In the US, President Biden issued an executive order on 9 March 2022 on the subject of ensuring the responsible development of digital assets. It announced measures to protect US and global financial stability and mitigate systemic risk.
27. In addition, in March 2022, the Law Commission published its report on electronic trade documentation together with draft legislation which would implement its recommendations to allow for the legal recognition of electronic trade documents such as e-bills of lading and e-bills of exchange.
28. The UK Jurisdiction Taskforce’s Legal Statement on the status of Cryptoassets and Smart Contracts under English law has already made clear that cryptoassets are properly to be regarded as property in English law, and that smart legal contracts are indeed legally binding contracts in English law. And the UKJT’s Digital Dispute Resolution Rules, intended for on-chain digital relationships and smart contracts, provide for arbitral or expert dispute resolution in very short periods, allowing arbitrators or experts to implement decisions directly on-chain using a private key.
29. All these developments will change the kinds of dispute that arise in both the financial, commercial and consumer sectors. Digital payment mechanisms and digital commercial documentation recorded on-chain will remove the scope for traditional evidence-based disputes about who said what to whom and whether transactions were concluded or executed at particular times or places. Indeed, it seems likely from what Mr Glen was suggesting that government will now be looking towards using digital systems itself, perhaps to provide digital share ownership recorded onchain, and possibly to levy taxes and customs duties on-chain as an integral part of digital transactions generally.
30. It would make no sense in such an environment to perpetuate an analogue system of dispute resolution that might take months or years to ascertain what was already immutably and incontrovertibly recorded on-chain.
31. Returning then to the theme of the conference, namely global, sustainable, and ethical dispute resolution.
32. It is obvious that the new technologies I have been speaking about are borderless. The blockchain is borderless and global, making no distinction between nodes in different national locations. Digital payment mechanisms are likewise borderless even if they may be regulated or backed by assets in national states.
33. As I have been trying to explain, dispute resolution will not be sustainable if it adheres to its analogue roots and shuns the digital environment. It will lose the confidence of the new generations of bankers, financial services providers, underwriters and even lawyers. It will also lose the confidence of consumers and SMEs, who will themselves demand affordable and proportionate methods of dispute resolution online or on-chain as these technologies are used in all other sectors.
34. I shall close with a question which may require further consideration. The ethics of dispute resolution surely require that it is accessible to all and that it is not excessively or disproportionately costly or time-consuming for anyone to vindicate their legal rights. Could an unreformed analogue dispute resolution system be really either sustainable or ethical in a world where everything else is obtained digitally?
35. Many thanks for your attention.