Dispute Resolution for the Digital Economy

Abstract

The novel characteristics of distributed ledger technology (‘DLT’) and ‘smart legal contracts’ (‘SLCs’) make it essential for parties to think carefully about how disputes arising in this context will be resolved. Put simply, codification and self-execution of parties’ agreements will not do away with disputes, and conflict of law questions can be very complicated in the absence of express dispute resolution mechanics within the SLC itself or the governance framework of the relevant DLT ecosystem. Many users of DLT are keen to resolve disputes ‘on chain’, avoiding recourse to traditional courts or tribunals. This trend is diving a new wave of Online Dispute Resolution (‘ODR’) tools. However, notwithstanding the potential benefits of efficiently enforcing ODR decisions ‘on-chain’ as a matter of practice, it is crucial to consider how those decisions can be anchored (and enforced or protected) within a valid domestic or international legal framework. It is no good to have a self-executing ODR process ‘on-chain’ which can be wholly unwound if a dissatisfied party takes the matter to a domestic court. This chapter summarizes the basic concepts related to ODR, DLT, smart contracts, and SLCs, reviews the possibility of resolving DLT disputes through new and established ODR processes, and explores the promise and challenges of DLT-based ODR solutions currently available. It comments on the need for greater multi-disciplinary collaboration at the interface of law and technology to build legally robust ODR processes that are fit for the digital economy and will enable and promote more mainstream adoption of DLT.