The Use of Blockchain Technology in Legal and Justice Systems

One of the advantages of blockchain technology is the opportunity to put a digital tag onto objects and document allowing to track movements either physically or online. This feature opens huge possibilities in the joint work of blockchain and law, one of them being the proof of service. For instance, the court sends written instructions to a party of a lawsuit when they are induced to attend the court. In this process, a proof-of-service document is the affidavit to the court that the individual received. Generally, the companies that resort to the service of papers are known as process servers, and ServeManager is one of them. In the beginning of the year, ServeManager partnered with a blockchain company called IntegraLedger. The companies focused on testing a proof of concept with the help of the IntegraLedger blockchain to ensure the service documents delivery and ultimately act as reliable proof that these papers were delivered.

Criminal Cases

Legal system could also benefit from blockchain using it to improve the criminal justice system with distributed ledger architecture. Therefore, law enforcement, prosecution, courts, probation, defense attorneys, and corrections organizations would be able to access criminal charges shared and tracked in a ledger. When charges are added or dropped, that information would be posted to the ledger as well, with the faster result and overall more efficient administration of justice.

Smart Contracts

The legal industry highly relies on legal documents, be it the contracts between companies or the statements from witnesses and victims. However, there is a need to sign and store a document in order for it to be binding, which is a time-consuming process that does not exclude human error. Blockchain technology might be the solution to this issue, incorporating accessibility to the documentation process and potentially even allowing the removal of a third party (a lawyer) from it. Nevertheless, it shows how such a change could be a threat to individual lawyers, although being beneficial for the industry on a large scale. Frequently smart contracts become the center of discussions regarding blockchain and law. There are different reasons why such contracts cannot currently replace a standard legal contract by themselves. For instance, sometimes there are new situations that come up, but no one was thinking about them when negotiating the contract. However, blockchain is permanent, so amending smart contracts that were not programmed for further modifications could be way more challenging than it currently is in the offline world. Most importantly, a smart contract alone is just the execution of a particular agreement, not the agreement itself. Therefore, even if a smart contract executes the agreed terms, the contract itself still calls for the involvement of a courtlawyer.

Notarization and Intellectual Property

In general, blockchain is able to perform the same role as a notary since biometric data would allow a more solid authentication of a presence than the use of a private key which can get stolen. For example, BlockNotary uses blockchain for verification and witnessing of transactions and data as it offers “timestamps and fingerprints for media files”. However, no government has yet agreed to replace a notary public with blockchain since it is an official government role. Intellectual property law covers copyrights, patents, and trademarks. Therefore, by recording ownership of intellectual property people create a permanent and immutable record of ownership that they could use if there is a need to resolve the related dispute. The use of blockchain is quite frequent in the protection of copyrights. The examples are KodakOne covering photographic work, and a collaboration between Microsoft and EY about gaming. Besides, despite the obvious huge efficiency that comes from the integration of blockchain into legislation, it brings benefits beyond just ownership protection. For instance, the registration and licensing of all intellectual property (IP) rights are on a blockchain-based record, so the due diligence procedure will become easier and faster than it is now.

Blockchain technology can also be very useful in managing licensing rights. For example, a party that wants to acquire licensing rights to IP could purchase them through digital tokens, having a record of the transaction that is immutable and helps in any subsequent dispute resolution. It gives IP owners a previously unavailable level of control. Such music platforms as Ujo Music, PeerTracks, and Bittunes are already taking distribution and monetization onto the blockchain.

The Future of Blockchain in Law

It was inevitable that a huge rise in popularity of Bitcoin and cryptocurrencies in general would draw the interest of regulatory bodies and governments. They are now starting the release of guidelines and in some cases even legislation. Considering this is new ground, lawyers are playing a crucial role in the navigation of appearing regulations.

Blockchain is a unique opportunity for them to position themselves as trusted strategic advisors to clients navigating the myriad legal, regulatory, and logistical webs surrounding the technology and its applications.

Overall, blockchain and law working together might bring many exciting and beneficial possibilities. However, as the contributing editor at New Statesman Tech Sooraj Shah says, “While it’s clear blockchain is a technology that will affect the legal industry, the repercussions are still unclear. ” Some members are even forming into consortia to keep up with the novelty together but we will cover the benefits for enterprises in Part II. Indeed, legal sphere is notoriously steady and hard to change, but the change is inevitable. As the saying goes, “Justice delayed is justice denied”, and digitization tends to increase efficiency. Therefore, legal and justice systems should take advantage of the benefits of new technology.