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Japanese researchers use blockchain to settle legal disputes

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Economic researchers in Japan are now looking to use blockchain technology in creating “digital courts” to settle legal disputes.

Aside from settling legal disputes, the concept also focuses on using blockchain methods in implementing agreements such as auctions, business contracts, and sales.

Blockchain has given birth to many technological innovations such as the Internet-of-Things (IoT) and smart contracts. Because of its security, immutability, and decentralized nature, blockchain can have a huge potential in the legal system.

Researchers have, in fact, demonstrated the use of blockchain in a new use case in digital courts.

“We designed a digital court which identifies and punishes parties who deviate from legal obligations such as commercial activities,” according to Professor Hitoshi Matsushima of the University of Tokyo.

How does it work?

“On suspected violation of some agreement, those involved post their opinions to this digital court. The court algorithmically aggregates the parties’ opinions and judges who violated their agreement. If the digital court judges that a party violated the agreement, the party is fined by withholding a deposit made during the initial agreement.”

According to the current draft of its whitepaper released last month, the digital court is a self-enforcing mechanism that does not rely on a trusted third party. It entirely depends on smart contracts to judge who among the parties involved in an agreement reneged on their end of the contract.

Only the communications and corresponding actions are performed outside the blockchain.

The researchers agree that because blockchain technology is unregulated and could be exploited for “nefarious purposes,” digital courts might face the same skepticisms as well.

Researchers maintain, however, that these issues can be resolved if regulators work with innovators and users to “collectively finds solutions” on such problems.

“Blockchains in some ways are a double-edged sword. But this kind of system signals the dawn of a new economic paradigm that must be embraced and explored rather than feared and ignored,” Matsushima said.

The researchers are hopeful that the blockchain infrastructure is already prepared to accommodate the digital court technology.

“A digital court could be built on current blockchain platforms such as Ethereum, and it could happen right now,” Matsushima concluded.

Is this the first time digital courts have been tried?

There are other projects that have been built around the same model.

China’s Hangzhou local government, for example, has been reported to adopt smart contracting in its judicial platform. It was set up in 2017 to settle disputes on e-commerce, online agreements, and copyright infringements.

Aragon has also tried the concept in Aragon courts. It was aimed at becoming the internet’s “de facto” jurisdiction, resolving disputes digitally with human jurors that form part of the Aragon community.

Featured image courtesy of PxHere

Errol Villorente

Covering topics on technology, finance, and cryptocurrency. Believes in the promise that lies in the blockchain and cryptocurrency to change the international financial landscape.

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Errol Villorente

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