Blockchain: An Unlikely Key to Improving Access to Justice?

Par Katarina Daniels, avocate et Josh Shapiro, Student

Josh Shapiro, Student, McGill University

Katarina Daniels, Lawyer, Liaison Librarian at Nahum Gelber Law Library, McGill University

Among all legal technologies revolutionizing the practice of law, blockchain may represent the least understood, while ranking among those with the most potential for the future. Therefore, it is well worth examining a number of uses of blockchain in law.

Former Chief Justice Beverley McLachlin has pointed out that one way Canadians must improve their justice system is by using legal technology to increase accessibility.[i] Christian Lang defines legal technology as technology that helps facilitate the practice of law and helps consumers access justice. This is precisely what blockchain can accomplish, in a number of ways.

While initially closely associated with cryptocurrencies, blockchain’s applications have grown tremendously thanks to an increased understanding of one of its most useful functions, its capacity to act as a ledger and keep track of transactions. Blockchain stores data in a decentralized manner, distributing data across a network, and maintains a digital record of all transactions in this way. These records are resistant to alteration, requiring consensus from the network, and can therefore be verified. Blockchain’s impact on the financial, legal, and real estate sectors has already been seen in everything from financial asset management to smart contracts, and most recently to land registries.

Land registries on blockchain 

In 2017, the nation of Georgia transferred its land registry to the blockchain. In Georgia, public confidence in the land registry had eroded due to a history of corruption, where authorities had manipulated land title and ownership. The use of blockchain has increased transparency, as citizens can now view each transaction. Furthermore, citizens can be confident in the accuracy and legitimacy of the records, since the decentralized nature of blockchain makes it essentially impossible to manipulate without getting caught. The Georgian blockchain registry now covers “sale of land titles, registration of new titles, mortgages, rentals and notary services”, and has effectively brought access to these more trustworthy resources to the Georgian public.

Land registries are just one example of how application of blockchain technology can allow citizens to assert their rights. To date, aside from Georgia, Bermuda, Brazil, Ghana, Honduras, India, Russia, and Rwanda – countries where corruption has previously led to mistrust in the land registry system – have all implemented blockchain-based land registries. In addition, the states of Wyoming and Vermont, the Netherlands, Sweden, the UK, Colombia, and Dubai have all either established partnerships with blockchain companies, indicated a plan to move their registries to the blockchain, and/or started storing some land-related transactions on blockchain.

Jury selection on blockchain

Importantly, applications made with blockchain are trustless; they work through consensus-validated collection of data, where transactions are verified by a number of actors. As we have discussed, this means that blockchain is readily applicable in functions where the public may have previously been skeptical. (Blockchain was indeed created in part due to a lack of trust in prevailing methods and the need for trustless alternatives.) Therefore, blockchain raises important possibilities in the realm of jury selection, as notably seen in Argentina.

Argentina is a major adopter of blockchain technologies in more than one realm. Argentina, like Georgia, has had difficulties with corruption, specifically and perhaps most notoriously in its court system. New technology has helped ameliorate this problem, as blockchain has enabled juries to be created virtually. More recently, a number of Argentinian organizations have recently joined to create a blockchain-based platform, the Federal Blockchain of Argentina, in an effort to increase government accountability and ledger access for citizens. It will operate with the help of government bodies, and likely improve a number of public processes, by using blockchain’s ability to provide reliability, transparency and efficiency. This once again demonstrates that blockchain’s applications in the legal field are wide-ranging, not limited to the private or public spheres alone. As the ideas of blockchain-based land registries and jury selection pick up across the world, another use for blockchain is just being recognized: ODR.

ODR on blockchain

Online dispute resolution operates on the premise that “[m]odern technology generates many new and innovative disputes but there are only limited opportunities to resolve them fairly, cost-effectively and quickly.”[ii] This results in a “digital justice gap”, where state courts and alternative dispute resolution methods cannot be easily employed. Online dispute resolution providers have stepped in to aid in solving common disputes and to provide other forms of support in this area.

While online dispute resolution was made popular before the advent of blockchain, this new technology has recently entered as an encouraging tool to improve upon existing platforms. In particular, blockchain enables ODR platforms to connect users with crowdsourced jurors, which ensures fairness of process. Kleros, a company offering “fast, secure and affordable arbitration” for virtually any product or service, is one entity that has harnessed this functionality of blockchain.

Considering the wide-ranging applications of blockchain, it should come as no surprise that major investments are being made in legal technologies involving blockchain. Australian legal technology company Legaler has recently raised $1.5 million with views to building a blockchain-based platform “aimed at bridging the global gap in access to justice.” Companies from Walt Disney to Walmart are beginning to explore blockchain, as are all ten of the world’s largest public companies. No doubt, legal applications are foremost among many of these investments, including applications in the fields of tax, corporate transactions, and securities.

Blockchain has already had a strong impact on the practice of law, and this impact will only continue to grow over time. The field will present significant opportunities for the legal community and public at large, making it vital for lawyers to understand how blockchain can be applied.

Interested in some of blockchain’s applications? Be sure to attend this year’s Legal.IT conference, which includes a session on blockchain in the media industry.

[i] Beverley McLachlin, “Accès à la justice et marginalisation: l’aspect humain de l’accès à la justice” (2016) 57:2 C de D 341.

[ii] Braegelmann, Tom H, “Online dispute resolution – ODR” in Markus Hartung, Micha-Manuel Bues & Gernot Halbleib, eds, Legal Tech (Munich: Verlag C H Beck oHG, 2018) 233 at 233.

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