groundbreaking-rules-published-to-enable-rapid-resolution-of-blockchain-and-crypto-legal-disputes,-as-worldwide-smart-contract-market-expected-to-reach-$345.4-million-by-2026[1]

Groundbreaking rules published to enable rapid resolution of blockchain and crypto legal disputes, as worldwide smart contract market expected to reach $345.4 million by 2026[1]

 

The UK Jurisdiction Taskforce of LawtechUK, chaired by Sir Geoffrey Vos, Master of the Rolls, has today published its Digital Dispute Resolution Rules designed to enable faster and more cost effective resolutions to legal disputes relating to novel digital technology such as crypto assets, smart contracts, and blockchain applications, and foster confidence amongst businesses in the adoption of these technologies.

The use of these technologies in business has rapidly gained in popularity in recent years. JP Morgan, for example, is just one of many large-scale corporations already regularly taking advantage of the use of smart contracts (self-executing contracts run on blockchain technologies that automatically process transactions without the need for a third-party). The business benefits of smart contracts are wide-ranging, including enhanced security, improved efficiencies, and cost reduction in the implementation (and automating performance of) contracts between parties.

However, until now, there has been little consistency in how legal disputes relating to these types of technologies should be resolved, leading to lengthier and more costly processes.

Drafted in extensive public and private consultation with lawyers, technical experts and financial services and commercial parties, the Digital Dispute Resolution Rules published today are designed to facilitate the rapid and cost effective resolution of disputes arising in the context of these technologies, and to foster industry confidence in their use.

One important feature of the Rules is that they allow parties to resolve their disputes by an arbitrator, rather than by a judge in court (which can be a more time-consuming and costly process). They have also been drafted to provide maximum flexibility to adapt to as yet undeveloped technologies, and to reach a resolution to disputes quickly and efficiently by arbitrators with appropriate technical expertise and enabling on-chain implementation of decisions.

The UK has been at the global forefront of developing the legal infrastructure to support the deployment of these nascent and evolving technologies. In November 2019 the UKJT published its well-received legal statement on the status of cryptoassets and smart contracts under English and Welsh law. The legal statement was a significant step by the UK towards legal certainty for blockchain technology and crypto assets. Furthermore, English law provides an established and familiar framework by reference to which rights in respect of digital technologies can be effectively established and enforced, and has an impressive track record of dealing with and adapting to technological developments.

Master of the Rolls, Sir Geoffrey Vos, chair of the UK Jurisdiction Taskforce and LawtechUK Panel member, commented: “I am delighted to welcome the publication by the UK Jurisdiction Taskforce of the ground-breaking Digital Dispute Resolution Rules. International business is rapidly adopting the use of digital documentation and on-chain smart contracts. The Rules aim to provide a process for speedy and cost-effective resolution of disputes originating digitally. They will hopefully give global businesses greater confidence to adopt and utilise new digital technologies.

Jenifer Swallow LawtechUK Director at Tech Nation, comments: “Analogue ways of doing business will be widely restructured and digitised in the coming years, increasing efficiency and transparency.  The smart contracts market alone is set to reach $345.4 million by 2026. Methods of dispute resolution must keep pace. The Digital Dispute Resolution Rules are a step change in that evolution and in enabling wider confidence and adoption of these technologies – underpinning those readily-available today and capable of adapting to those yet to be developed. This is an exciting next step in the UK’s leadership at the forefront of business, law and technology, and also demonstrates how simple legal processes can be.

The UKJT will keep a close watch on how the  Digital Dispute Resolution Rules are used, and will aim to consider whether further development or revision would be valuable within the coming year, based on user feedback.

[1] https://www.prnewswire.com/in/news-releases/smart-contracts-market-size-to-reach-usd-345-4-million-by-2026-at-cagr-18-1-valuates-reports-832536081.html

The Digital Dispute Resolution Rules

The Rules are available for download here.

UK Jurisdiction Taskforce and LawtechUK

LawtechUK, a government-backed initiative within Tech Nation, is established to support the transformation of the UK legal sector through technology, for the benefit of society and the economy.  Established in 2018 by the Secretary of State for Justice, the LawtechUK Panel, then the Lawtech Delivery Panel, are a group of leaders and experts from the public and private sectors working to achieve that objective and acting as the advisory board to LawtechUK.

The UKJT was established by the Panel as a taskforce to demonstrate that English law and the jurisdiction of England and Wales together provide a state-of-the art foundation for the development of distributed ledger technology, smart contracts and associated technologies.

The members of the UK Jurisdiction Taskforce (UKJT) are:

Sir Geoffrey Vos, Master of the Rolls and Chair of the UKJT
Lawrence Akka QC, Twenty Essex
Sir Nicholas Green, Chair of the Law Commission of England and Wales, as an observer
Richard Hay, Linklaters LLP
Peter Hunn, Accord Project
Mary Kyle, City of London Corporation
Matthew Smith, Financial Conduct Authority
Sir Antony Zacaroli, Justice of the High Court

The drafting team:

David Quest QC, 3 Verulam Buildings
Lawrence Akka QC, Twenty Essex
Anne Rose, Mishcon de Reya
Dorothy Livingston, Herbert Smith Freehills
Rory Conway, Linklaters
David McIlWaine, Pinsent Masons

a-groundbreaking-initiative-in-israel’s-banking-system-–-a-bank-and-a-fintech-company-join-forces:-leumi-and-tarya-fintech-sign-strategic-partnership-agreement-to-jointly-develop-an-innovative-core-system-for-leumi’s-mortgage-operations

A Groundbreaking Initiative in Israel’s Banking System – A Bank and a Fintech Company Join Forces: Leumi and Tarya Fintech Sign Strategic Partnership Agreement to Jointly Develop an Innovative Core System for Leumi’s Mortgage Operations

 

Leumi (TASE: LUMI)  and Tarya Fintech have joined forces in a strategic initiative to develop and adapt Leumi’s (core) mortgage system, as part of the Bank’s modernization project. The synergy between Tarya Fintech’s innovative technology and unique DNA and Leumi’s technological leadership, experience and knowledge will lead to the creation of an innovative, agile and customizable digital mortgage platform. The system will be developed with a holistic view of customers’ needs and financial decisions at various stages of their lives.

Although mortgage credit is one of the major areas of activity in the banking system (more than 30% of banks’ credit portfolio is comprised of mortgages), the process of taking out a mortgage loan is often highly cumbersome. The new system will alter the way mortgages are obtained, giving customers a state-of-the-art, user friendly and transparent experience across the entire process, at the time and place of the customer’s choosing. The system will offer unique capabilities, new to the world of banking, with the aim of cutting red tape, shortening underwriting processes and simplifying the various approvals required – in order to offer customers a concise, speedy response, tailored to their needs.

The system, which is currently under development, will be available for use by Leumi and Tarya Israel in Israel; Tarya Fintech will be able to use the system to serve its customers worldwide.

Leumi, one of Israel’s leading banks, is considered a pioneering innovator in the field of banking: as early as 2016, it became the first bank in the country to use cloud technology; in 2017, it established PEPPER, Israel’s first digital bank; and recently, it launched a fully-digital mortgage loan, which also enables customers to obtain mortgage consulting services over Zoom. Jointly developing the system with Tarya will allow the Bank to make a groundbreaking leap in the field of mortgages.

Tarya was established in 2014 and has become Israel’s largest P2P  lending company. Tarya leads the market through its digital system for alternative investments, most of which are backed by real estate collateral;  among other things, the company has extended mortgages totaling approx. NIS 1 billion to the general public. Since its inception, over NIS 4.5 billion has been processed through Tarya’s platform. The company’s outstanding loans portfolio, backed by the company’s real estate collateral, totals over NIS 2 billion.

Founded by Eyal Elhayany, Varda Lusthaus and Assaf Shlush, Tarya has gained traction with a series of unique technological developments. Among other things, the company has developed a smart algorithm that generates a virtual credit rating that is able to predict the borrower’s repayment capacity.

In December 2020, it was reported that Tarya Israel is expected to go public, by way of a merger into public company skeleton Luzon Real Estate, controlled by businessman Amos Luzon.

Hanan Friedman, President & CEO of Leumi: “Leumi leverages its technological-digital strategy – which has proven itself over the past year – through collaborations with fintech companies. This is key to tomorrow’s banking, that is all the more relevant given the imminent entry of the open banking reform, which we regard as an opportunity. Leumi intends to be a leader in collaborations and  the first choice of fintech companies, in order to bring innovative service value to customers of all banks. The collaboration with Tarya will further strengthen our business focus on mortgages and allow us to take another leap forward in the rapid launch of disruptive products”.

Jaime Schcolnik, Head of Leumi’s Technologies Division: “Leumi is in the process of technological innovation, which includes building a technological architecture that enables a leap into the future. In this framework, we leverage technological collaborations with fintech, enabling them to connect to the Bank’s systems, as part of the open banking reform. The unique collaboration with Tarya will lead to the development of a modern mortgage platform that will provide a swift, varied response to customers’ needs”.

Tarya Israel CEO, Shahaf Erlich: “I welcome the important deal with Bank Leumi, which is reflective of the new world of banking. Together with Leumi, Tarya will develop a cutting edge technology to improve customer experience and revolutionize the mortgage market”.

Assaf Shlush, Founder and CEO of Tarya Fintech: “We are proud to lead the first-of-its-kind joint initiative between a fintech and a leading bank. For the first time in Israel, a fintech with a proven financial technology platform and extensive international experience joins forces with an Israeli bank which is at the forefront of substantial modernization, as a true fintech partner, to jointly develop a core system. We thank Leumi – which champions an innovative approach to digital banking – for choosing Tarya Fintech to lead the development of the core mortgage system. We believe that this joint initiative is the first step in a strategic cooperation aimed at leveraging strengths, boosting joint growth and creating significant added value for customers in Israel“.