Fourth Industrial Revolution

Is the law as we know it still fit for purpose?

New technology throws up new challenges for the legal system Image: REUTERS/Pichi Chuang

Eduardo Leite
Chairman Emeritus and Senior Partner, Baker McKenzie
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Fourth Industrial Revolution

The opportunities and challenges of the fourth industrial revolution will be widely discussed at the World Economic Forum's Annual Meeting at Davos this week. Many of us believe the new industrial revolution has the capacity to vastly improve our lives. We will be able to communicate better, have an increased understanding of the world we live in and we can hope for a longer, more healthy life. But at what cost to the rights of the individual and of intellectual property?

As lawyers we are already grappling with some of the challenges of the fourth industrial revolution. What are the implications of 3D printing, how can you balance rights of privacy with concerns about security, who 'owns' the medical device inside your body and what are the liability concerns around driverless cars?

These and many more issues raise the question whether the rule of law as we know it is 'fit for purpose' in such a volatile age. If not - what needs to change? How can the rule of law be an enabler not a blocker of the fourth industrial revolution?

I believe it can evolve, is evolving already, with some basic age-old principles at its heart.

First of all change is not new. After all the legal profession has dealt with the first three industrial revolutions. Twenty years ago lawyers had to grapple with this new thing called the internet and the early days of e-commerce. A hundred and twenty years ago it was Kodak and their new so-called 'instantaneous photographs'. The difference now is the pace of change.

And with that speed of evolution the key is to maintain an equitable balance between the three constituents - individuals, business and the State. How can each party be protected without gridlock?

For the rule of law to adapt to the fourth industrial revolution the focus needs to be on principles based regulation and legislation. I believe if we have a mind-set that is prescriptive, that ticks boxes, that focuses on the letter of law not the spirit we will be in trouble. We will always be dealing with yesterday's problem, fighting the last war, not preparing ourselves for the upcoming challenges.

Personally I also think the nature of the divide between Civil and Common Law will change. Coming from a Civil law background system myself there are many advantages with the code - it is more stable and in some ways 'fairer' because laws are stated explicitly and are easier to discern. But there is no denying the flexibility of Common law is better at dealing with rapid, technological change without the need for often slow, government intervention. In the future, legal systems will have to take the strongest components of the two traditions, giving them the best of both legal worlds.

Regardless of which system, the days of predominantly national legal oversight, particularly for any heavily regulated industry, are disappearing fast. Legislative frameworks have to be supranational to fit both the demands of technology but also the desire for deeper integration of many cross border institutions be it the EU or ASEAN and to simply recognise the increasingly global nature of society. One interesting recent example is how the OECD drove the introduction of new global rules on tax. Without their commitment and drive to engage with every major nation the initiative would have been considerably weaker.

Finally there is the principle of justice itself. Past industrial revolutions have empowered the many, not the few. The rule of law has a place in ensuring on the one hand mass privacy rights are balanced fairly with security concerns, while on the other, the potential vast improvements or even extensions to our lives are available to the many, not just the privileged few.

So I believe the rule of law can evolve to meet the challenges of the Fourth Industrial revolution, but it must be practical, transparent, flexible land above all rapid. And that is the responsibility of the institutions supporting the rule of law around the world, which must themselves modernise and quickly embrace technology without losing sight of the principles underpinning their purpose.

Author: Eduardo Leite is the Chairman of Baker & McKenzie.

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