The Courts and Tribunals Judiciary website has published a speech given by Sir Geoffrey Vos to the ISDA Virtual Annual Legal Forum on 10 March 2021. The speech focussed on the technological challenges currently facing both English law and the judiciary generally, especially against the backdrop of rapid developments in smart contracts and distributed ledger technology.
The speech referenced previous remarks made on the legal status of cryptoassets and smart contracts, on-chain payment methods for the wholesale banking markets, and dispute resolution processes in relation to smart contracts and blockchain.
In terms of progress, it was noted that the UK Jurisdiction Taskforce’s (UKJT) ‘Legal Statement on the Status of Cryptoassets and Smart Contracts’ published in 2019, providing an authoritative view that cryptoassets could be regarded as property and smart contracts regarded as legally enforceable, has witnessed global approval in the courts of England and Wales, New Zealand and Singapore. The UKJT also recently concluded its public consultation on its draft Digital Dispute Resolution Rules, intended to be incorporated into on-chain digital relationships and smart contracts. However, it was also noted that developments in a Central Bank Digital Currency (CBDC) have been slower than envisioned, particularly since the Bank of England’s discussion paper on the opportunities, challenges and design of Central Bank Digital Currency released in March 2020.
Outlining future developments, Sir Geoffrey Vos highlighted the work currently being undertaken in relation to the digitisation of commercial records. Key to the endorsement and implementation of smart contracts is ensuring that electronic documentation can be used and transferred safely and reliably, without risk of duplication. In this regard, it was noted that English law is fully capable of adapting to new technologies, and that the ultimate goal is to position the jurisdiction as a highly attractive jurisdiction for international financial markets and digital trade.
London’s operation as a centre for international dispute resolution was also cited as a key strength of our legal system, remaining resilient despite Brexit. This was epitomised in the recent Covid-19 business interruption insurance case making its way to the Supreme Court and decided within just six months. Future innovation will focus on the digitisation of court proceedings extending to all civil claims and the role of “lawtech” in helping businesses and individuals vindicate their legal rights more quickly and at a lower cost.
Above all, Sir Geoffrey’s speech highlights that the UK’s legal frameworks are well placed to adapt to ongoing technological developments right through industry, commerce and financial services. In the context of increasing threats of protectionism globally and the possible risk of dislocation or interruption to trading patterns, it is a salient - and welcome - reminder that structures and economies can and do adapt.
Written by Brandon Wong and Martin Cook
"The judiciary intends to do all it can to produce a legal system in England and Wales ... that embraces new technologies, and allows disputes arising from the financial markets of tomorrow to be resolved quickly and efficiently and at proportionate cost." The Right Hon. Sir Geoffrey Vos, MR