Smart contracts, a new approach to property rights tracking and transfers and a change in the way corporate governance is delivered are just three of the major changes commentators see coming our way from blockchain.
The themes are well captured in a recent blog post detailing the themes of a big US conference on blockchain and the law from Lauren Mack, a senior associate attorney at a firm called Riveles Wahab, LLP.
Smart Contracts
A “smart contract” is essentially a contract written in code, where obligations under the agreement can be triggered and performed automatically, says Mack. These self-executing contracts seek to solve some of the typical problems that arise with standard written agreements, such as interpretation and enforcement of provisions, since performance and any consequences under the agreement would be performed automatically. This means less argument over the meaning of an Oxford comma (or lack thereof) and potentially decreased lawyer involvement in everyday contracts, which could give the average person greater access to enforceable legal agreements.
Property Rights Tracking and Transfers
Ownership of intellectual property rights is notoriously difficult to track. The transfer of a copyright, trademark, patent or other intellectual property right from one party to another generally must be shown by a written contract, and it is difficult to prove ownership or any transfer without that written proof. Using blockchain technology’s secure, distributed ledger would make keeping track of what rights are owned by whom and where they originated much easier. Transactions such as the licensing or purchase of a music recording could also be automated using blockchain technology. The purchase and transfer of tangible property that is typically registered with the government could also benefit from blockchain technology. Deeds to land, motor vehicle registrations and pet licenses could be more easily and securely tracked. For example, in many jurisdictions, someone must perform a title search by physically tracing the ownership of land through paper records in the basement of a government building in order to confirm that the seller of the land has the right to sell it to the purchaser. If the ownership and transfer of that land was made publicly available on a secure ledger, then confirming true ownership of the land would take seconds instead of hours.
Governance
Blockchain technology also could solve the challenges many governments face in maintaining and securing public records data. Governments could use blockchain technology for a variety of functions, such as allowing for secure voting, tracking census data, collecting taxes and more. In theory, all of a person’s interactions with the government during his or her lifetime could be securely stored on the blockchain, including issuance of a birth certificate, driver’s license, marriage license and death certificate. Common bureaucratic problems such as extensive and redundant paperwork, lost files, lack of communication between agencies and human error could be reduced or even eliminated.
Mack is a also cofounder and director of Legal Hackers, a global movement of lawyers, policymakers, designers, technologists and academics who explore and develop creative solutions to some of the most pressing issues at the intersection of law and technology.
If you agree with Mack and other commentators that the law sector needs to pay more attention to these issues, then you may be interested in our upcoming Think AI For Legal 2018 conference, which will specifically debate blockchain and its impact on the profession: go here for the agenda and here for the easiest way to secure your place.
