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Also, wrongly known as decentralized ledger technology, blockchain is becoming a vital element that could disrupt every sector of life. The technology first came into the limelight in 2009 with the release of Bitcoin. Today, blockchain shows great use cases in almost every industry, such as finance, healthcare, agriculture, and supply chain.
Blockchain impacts continue to spread across industries, with the latest target being legal institutions. Legal systems are among the slowest industries when it comes to the adoption of new technology. Blockchain, however, is a wave too hard to ignore. This article looks into different blockchain use cases in legal systems and its adoption in various jurisdictions across the world.
Applications of Blockchain in Courts
Decentralization, distribution, immutability, consensus, and transparency are the main features of blockchain technology. When applied in legal systems, they can help in:
Securing Legal Registries
Legal registries include commercial registers, share registers, civil registries, land registries, patent, and copyright registers. Blockchain cryptographic hash value can be used for secure storage of registries and digital evidence while ensuring authenticity.
The immutability feature of blockchain requires no data to be erased unless a consensus is reached through a majority vote. Immutability helps in accountability and ending judicial corruption.
A smart contract is a computer program that automatically executes when certain conditions are met. Smart contracts help improve justice systems while reducing huge paperwork in courtrooms.
Blockchain Use in Global Courts
The adoption of blockchain in courts is dependent on a country. The major problem is that in most countries, legal systems are older than independence itself. While other industries are forging ahead, legal institutions lag way behind.
Additionally, in many jurisdictions, courts are overworked, underfunded, and lack the necessary infrastructure. Most of these courts are state-centric and ignore international justice standards. It’s dangerous, especially with current globalization.
Luckily, several countries have discovered a better way of serving justice to the public. These countries challenge the status quo to adopt “young” blockchain in solving the problems that face judicial systems.
Below we look at five of these technologically-savvy jurisdictions leading in the pathway to revolutionizing legal systems using blockchain technology.
China is at the forefront of the adoption of blockchain in legal systems. It all started in June 2018, when China’s Hangzhou Internet Court launched its blockchain judicial platform. The first accepted blockchain-based evidence was between Hangzhou Huatai Yimei Culture Media Co. Ltd. (plaintiff) vs. Shenzhen Daotong Technology Development Co. Ltd. (defendant). The case involved the unlicensed republication of an article on Daotong owned “First Female Fashion Network” website.
The ruling took a blockchain path of verifying the chain of evidence concerning the Huatai’s legal position. The plaintiff presented screenshots of the article on the website whose authenticity was proven using blockchain-based Baoquan.com. Blockchain hashes, and timestamps also played an important role in helping the judge make the final judgment.
China’s Supreme Court’s acknowledgment of the first blockchain-based case opened the door for other institutions to follow, including Jiangsu High Court and Beijing Internet Court.
In the US, the states have the residual power of implementing their legislation. Several states like New York, Illinois, Vermont, Washington, Virginia, Arizona, and Ohio have legislation in place which regulates the acceptance of blockchain evidence in court.
The states are increasingly assessing the potential of blockchain in transforming their justice systems. For example, Illinois’ Blockchain Technology Act House Bill 3575, insists that blockchain evidence such as smart contracts cannot be excluded in court proceedings.
UK’s journey to blockchain evidence in courts began in 2018 with the pilot project’s announcement of using a distributed ledger technology (DTL) in courts by Her Majesty’s Courts & Tribunals Service (HMCTS). The project aimed at assessing the applications of DLT in simplifying and streamlining UK court processes.
In November 2019, UK Jurisdiction Taskforce (UKJT) ascertained the legality of cryptocurrencies and smart contracts through a legal statement. A part of the statement read, “a smart contract can be identified, interpreted, and enforced using ordinary and well-established legal principles.”
Adopting blockchain evidence in Italian courts officially began with law no.12/19 dated January 11, 2019. The law is relative to public and enterprise administration simplification and seeks to include blockchain electronic timestamping’s legal effects. As the law states, “storage of a computerized document through the use of technologies passed on distributed ledger creates the same legal effect as ‘electronic timestamp.’“
On smart contracts, the law states their applicability where the court requires a written contract as long as the parties can be identified digitally. This makes smart contracts as valid as blockchain timestamps in Italy courts.
In July 2019, a French member of parliament, Mr. Daniel Fasquelle, challenged the government by explaining blockchain technology and it’s potential. According to Daniel, blockchain has proved reliable, and many countries have already recognized its legality. In this Regard, Mr. Daniel wanted to know whether the French government was planning to provide a blockchain’s legal structure.
In response to this, through its lower house, the French parliament passed that digital evidence recorded on a blockchain cannot be denied in any French court. However, the judges have a mandate to assess the evidence probative value.
In the future
The above are just examples of how blockchain technology is being adopted in various nations. It’s indeed motivating that the technology is already finding its way to “lazy” adopters within a few years of existence.
With several cases already determined based on blockchain evidence, the China Internet Court is a great landmark for every country across the globe to emulate.
The reality of amending blockchain legislation with a nearly similar definition of smart contracts and crypto-assets is already a great gesture for the other four countries. That said, there has never been a better time to have blockchain. Our courts are now in a better position as we enter the 4th industrial revolution (4IR) to see cases take a new dimension.