Technology has already transformed the way in which commerce and trade flow around the world. Will our courts be able to keep up with the businesses of the Fourth Industrial Revolution (4IR)?
For more than 15 years, the World Bank has been studying how long it takes for companies to get their commercial disputes resolved through a local first-instance court. At one end of the spectrum lie countries with some of the world’s fastest courts, such as Singapore. There, it takes 164 days on average to progress a dispute from filing and service to trial, judgment and enforcement. At the other end lies Canada, for example, where the same steps require 910 days on average.
So, what gives? Part of the problem is that our systems of justice are older than democracy itself. While international commerce is forging ahead, our legal institutions are lagging behind. In many countries, public courts are underfunded, overworked and lacking necessary infrastructure.
An even more fundamental problem is at play: courts have to abide by basic principles of state sovereignty, which ignores the transnational nature of multinational businesses and finance. This state-centrism is dangerous for global business, especially since there are hundreds of thousands of multinational enterprises engaged in international business around the world, each with their own foreign affiliates.
A growing network of international commercial courts are seeking to challenge the status quo. As a hybrid of 'delocalized' arbitration and traditional courts, these courts are more attuned to the needs and realities of international commerce. Designed to operate outside of jurisdictional silos, they employ both international rules and procedures, as well as an international workforce, including, often, an international (travelling) judiciary.
These courts operate in English and permit foreign-trained lawyers to appear before them. In doing so, they maintain their independence while attracting international caseloads. Incidentally, the majority of international commercial courts also lie outside of Western countries, including in cities such as Singapore, Shenzhen, Doha, Dubai, Abu Dhabi and Astana. Below we share three examples of technologically-savvy international commercial courts that are aiming to disrupt business as usual.
The Dubai government’s ambitious blockchain strategy seeks to run 100% of applicable government transactions on blockchain technology by 2020. To this end, the Dubai International Financial Centre (DIFC) Courts and Smart Dubai have begun working together to create the world’s first blockchain-enabled court.
Their taskforce is looking to develop a blockchain-enabled scheme for the verification of monetary court judgments that can be enforced across borders. Subsequently, they hope to tackle disputes arising out of private and public blockchain technology encoded within smart contracts.
These efforts are the culmination of years of work already undertaken by the DIFC Courts in delivering service and innovation excellence, as well as network connectivities stemming from a grid of more than 30 memoranda they have bilaterally signed with other courts around the world. In 2018, the courts are hosting a global conference on court excellence and innovation, just one year after launching the Courts of the Future Forum.
Have you read?
In comparison, China’s interest in strengthening international judicial cooperation for businesses stems from its Belt and Road Initiative (BRI). If the launch of China’s 24-hour internet courts wasn’t enough, the country has also established two international commercial courts, one in Shenzhen, Guangdong and the second in Xi’an, Shaanxi. A third tribunal is expected be launched in Beijing to play a coordinating function.
These courts are linked up with China’s Smart Courts initiative, which includes the largest court database in the world. To enable cross-border exchange and mutual learning, the country is now turning its attention to expanding its database to include judgments from some 65 countries spanning the BRI, as well as any other countries that may influence decision-making in international commercial disputes.
China’s ultimate goal is to to create courts which will provide efficient and 'intelligent' services, by integrating artificial intelligence, conducting big data analysis, using voice recognition in trials, generating electronic files and using other smart case-handling systems. To aid this vision, China’s Supreme Court has recently ruled that evidence authenticated and presented using blockchain technology is binding in legal disputes.
The country is similarly harnessing technology to construct future-ready courts. Singapore’s ‘Courts of the Future Taskforce’, established in 2016, conceptualized a total of 15 key IT initiatives and three overarching objectives in its five-year technology blueprint. Adopting the intelligent use of court data is a particular priority in Singapore, which hopes to regain its position in legal tech to be able to compete with China.
While projects relating to the development of new capabilities for online dispute resolution and virtual hearings are already being actualized, the Singapore International Commercial Court (SICC) has begun encouraging its international judges to use tele-conference and video-conference facilities in early case management conferences. This means that judges can help disputing parties significantly narrow contested issues without physically being in the same room as them.
Other court technologies used in the SICC include electronic filing service platforms (complete with SMS alerts); advanced litigation technology, including evidence and trial management systems with the potential to give evidence through video-conferencing; and digital transcription services, such as audio recordings and the preparation of real-time transcripts.
Whether they succeed or not, these initiatives highlight an important reality. In order to remain relevant, courts must break from the attitude that the judicial institutions and legal cultures shaped thousands of years ago will continue to work in the future. Courts in the 4IR will involve virtual supply chains, blockchain-encoded smart contracts, AI-enabled judges and lawyers, and digital currency-based fines and payments. More than ever, court users need judicial institutions that are effective, cheap and secure, regardless of the city or country in which they operate.