How smart contract help settle disputes in decentralised dispute resolution platforms

Transcript

foreign hello everyone my name is Jamila thank you so much for introduction and thank you for having me um I will indeed talk about how smart contracts uh bring or may help to bring justice so I wanted to start by telling that I'm first year PhD student at Paris

to University and my PhD research is based on legal issues and governance of decentralized dispute resolution systems I work as a researcher at Claris which is essentially digitalized dispute resolution system and today uh hope that by presenting my topic which is part of my research I would spark some conversation I would be happy to you know discuss it and get some feedback from you often so um let's start um current justice system we can't talk about all countries but I've studied law in three different countries and when I was a law student my objectives were I

was dreaming to become a judge because I was driven by so many stories and I really I was really determined to bring Justice and facilitate that but then I became a little bit disappointed in the realities of justice system um I was doing my bachelor's degree back in Russia and then I just at the time I graduated I understood that while there are so many problems that are yet to be resolved So eventually I chose different paths now I'm in Academia but generally when we refer to you know traditional means of Justice we would say that it mostly very time consuming it could

be very costly especially if you are hiring lawyers and you know you go through those procedures and lack of trust it's something that refers to lack of confidence in the traditional justice system that many people face or just as simple as inability to reach to that Justice and just inaccessibility to that and execution of the decision that's something that also uh tied to you know traditional justice system uh even if the argument and the was settled and the decision was rendered there's a lot of

problems uh of actually when does that decision come into force or how do we actually facilitate the accusation of such decision so um smart contracts eventually help through technological solutions and but before I jump into decentralized dispute resolution systems I wanted to give a brief overview that of the Alternatives that exist there so first of all is alternative dispute resolution or ADR so it's a process that is referred to um you know neutral party neutral third party participating in the argument between two parties and basically helping and facilitating those parties

to come to uh an agreement so mediation and arbitration are usually the most common types of alternative dispute resolution and through mediation uh usually neutral parties try to help to discuss uh eventually come to consensus and uh in arbitration on that hand there is uh other primary form of alternative dispute resolution where the neutral third party serves as a judge who's resp who is responsible for resolving the the matter so um when it comes to online dispute resolution right it I would personally

put it into a subcategory of alternative dispute resolution because I mean if any of you've used eBay and uh or any other internet platform that allows those uh dispute resolutions you would know that well um it is relatively easy now to settle a dispute if you have let's say we've I don't know we've a potential buyer or consumer within the platform and eBay was one of the examples that like facilitated that new era of online dispute resolution back in the 90s so and then um we have decentralized dispute resolution and that's something that sparked a lot of interest with the

development of blockchain technology and not just the developments per se but also uh you know popularity among the general public because um as we know the blockchain technology was you know present back in the 90s and even before the development of internet but then uh when it actually comes to you know uh being something that is popular amongst the public I would say that it started to develop in 2000 I don't know 15 16. um so as I mentioned I work in Claris and Claris is a decentralized dispute resolution system that offers a solution uh to settle your disputes so um just a brief introduction to people

who might have never heard of it um it's one of the actually first uh decentralized dispute resolution systems that were launched back in 2017 2018 Dean and it continues to serve the public and it continues to grow the amount of cases that is being resolved so back in 2017 2018 there were a lot of Alternatives but uh even before I joined the team which happened uh not long ago I I followed the project and for me one of the criteria for joining was to see some project that is actually viable and that continues to grow work on the features and something that actually

stays in that actually people can use it's not just a theoretical idea but it could be used in you know in practice as well so um let's say I'm just because I have a legal background I have to give that little background and overview of how the just you know the legal overview of the regulation that is present around decentralized dispute resolution systems and alternative dispute resolution system in general so there is a convention on recognition and enforcement of foreign and it

provides that um you know like the foundation and basically was aimed to draft uh AIDS in an enforcement of domestic courts of awards granted in foreign countries so that's kind of the um legislative framework that we usually refer to when we talk about alternative dispute resolution systems there's always uh of course National laws that should be taken into consideration when we talk about the how for instance any case that is resolved in digitalized disputes uh resolution platforms would be interpreted in local you know

legislative framework by local courts and we're going to look at it and there's of course the uncitrol model law on International commercial arbitration and I mean we don't have unfortunately time to go into details I would love to discuss that but basically clarison fits into these legislative framework of course like the New York convention that was set in 1958 it doesn't have the direct uh you know reference to blockchain technology but what is interesting and what I hope to cover today is that what we see governments do is actually they try to facilitate Innovation not just legislating like legal smart contracts and saying well

now we accept blockchain-based evidence in court but also going further and facilitating uh means and tools to maybe help the uh you know traditional Judicial System it has to be said though that in my personal opinion I'm doing my research I do not view alternative dispute resolution systems or chord on blockchain I don't really like the external chord on blockchain because it refers to you know traditional coordinate traditional sense but I see it as a great additional tool that can actually help courts because um we know that many courts in many countries they are

overloaded with cases and when it comes to small claims which does not require necessary like physical presence or people might be into different countries they don't want to or they can't travel it could be a great additional solution so it shouldn't be viewed as a replacement to any traditional judicial system or a replacement of any you know present traditional means to resolve the justice but as rather an additional tool that could be utilized and could help so many people so what you see here is uh World Justice project and um basically it's an independent multi-disciplinary organization and

works to create knowledge build awareness and stimulate action to advance the rule of law worldwide but I wanted to draw your attention to the world Justice Project's rule of law index as you can see and you can check on the website well it provides kind of the rating including the countries which um you know the green they have like the strongest adherence to the rule of law where we can say uh affected areas like uh yellow orange and red one would be you know the worst so uh the one case in particular I want to talk about is Venezuela Venezuela in accordance to this index is in last place on 139

and um one of our colleagues uh Mr Roberta hung I've had a pleasure to chat with him in regards to issues that Venezuela faced in terms of uh you know traditional justice system he's a lawyer researcher and academic and he is originally from Venezuela so I thought it's you know the person to talk to um so basically the race the situation in Venezuela is um in terms of you know accessibility of justice is quite problematic and uh you know the index approves that point um so there are actually like local legislation that governs the arbitration

for instance commercial arbitration law and there's also even centers for arbitration two most known ones are Caracas chamber arbitration Center and the Business Center for consolation and arbitration of the Venezuelan American can Chamber of Commerce although you know Venezuela could be one of those use cases when people for instance seek a resolution of their dispute and they may not have access to justice system and then we can actually you know implement this smart contract technology that uh essentially facilitates fast and cheap and Anonymous dispute resolution by the third party of

the jurors that were drawn and it facilitates impartiality and that could be something that would be so great in in addition for instance the use of I don't know anything from Escrow Services from crypto Bank lending to you know decentralize dispute resolution so many things that could potentially help people and that's just my fault that when I was thinking well it's great that we have this means and people who are you know native with blockchain technology uh they can use that and they are using it actually uh not just to settle their dispute but also participate as a juror and potentially you know earn some money

because you know the clitoris system is based on game theoretical uh principles and uh you know there is an economic motivation for jurors to participate but that's all another topic I'm happy to discuss it later so um yes um however I was we were talking and I was like well what is the problem like uh why can't we let's say bring people who need uh decentralized justice and the technology and how can we connect that to things so and what's one thing that is obvious that even if theoretically we have legal um

foundations to implement decentralized distributed uh justice when it comes to you know practical means sometimes it's very problematic because uh you know just levels of corruption levels of Education because uh you can talk about theoretical uh use of decentralized uh I decentralized justice but if people for instance don't have any knowledge of blockchain Technology it would take some time to actually like do the onboarding or you know just introduce that concept to people at all so that would they even consider you know um using that technology

so um the challenges that decentralized uh dispute resolution face as I said public awareness local regulation and recognition uh one thing that I really wanted to talk about is the Mexican court and that's one of the means that when Mexican Court actually ratified the decision uh that was rendered using clarets Justice and um I don't have time to go in details but basically very short there were two parties in the agreement and one of their Clauses in the recent traditional agreement was well shall we have a dispute it's not uh you know direct quotation but

we will use basically like Claire's technology so there was an uh third party that was appointed and that third party has taken the dispute and put it into Clara's Court when decision was rendered the pool of Judges was gathered everything like the whole procedure was finished the Mexican Court ratified that decision and that was one it was it happened last year and that's one of the actual practical cases when we see local courts uh acknowledge the technology and you know uh basically not legalizing but setting uh precedence which we can use for further development

so um if you are interested in the problems of decentralized dispute resolution and just the current place of Claris for instance that it uh I I would suggest you to take a look at the report that was written by Mauricio virus it's based on the Mexican court case um yes please to take photos um yes it's very interesting it discusses the place of digitalization resolution systems and uh maybe you know potential Solutions how how we can breach and you know connect like the problem and the

solution to essentially help help people who need that tool so um very short when we talk about what is the current state of the international regulation and I would love to draw my attention to you know there are many it's just one of those examples of um you know bills and guidances that were issued by governmental bodies and I really want to uh like focus on the UK jurisdiction because um I was just not long ago giving a token regular framework of smart contracts and uh I was

um you know kind of pleased to find out that UK yet again support the development of innovation and technology so we have a law commission and UK jurisdiction task force that issue guidelines is that provide that essentially legal smart contracts fits into the current English system and provides reasonable um you know description how uh English common law can facilitate uh smart contracts but that's not uh the most important thing today the most important thing is the digital dispute resolution rules which were

developed and issued in 2021 and yes it provides certain definition which is very important to you know just to have the understanding of basic terms and um yeah if if you if you're interested I advise you to take a look and if you see that UK jurisdiction task force has yet again stated that currently there are no um you know at least from governmental side there are no um kind of problems of implementing technology of course it's not easy it's not that

straightforward but at least seeing governmental bodies institutions cooperate and just uh you know actively support that it's something it's very important so in terms of research right I I'm definitely not the first who would take that topic as a research issue there are a lot of um interesting papers that are dedicated to decentralized Justice as because I'm currently doing the research based on digitalized dispute resolution systems one of the main points I want to raise in my dissertation is how we can Bridge

basically like blockchain technology and people who might actually need it and by that I mean people who may not have many other alternative dispute resolution um tools so um that's an open question which I don't have an answer yet I hopefully maybe in three years by the end I finished my dissertation I'll be able to you know analyze and hopefully come up with some suggestions how the current situation can be improved um yes uh one of the obvious things which we can do is basically like

um raise awareness because as I said uh there's no use of saying well theoretically uh smart contracts can help people from unprivileged uh you know jurisdictions if we can't actually uh you know practically understand how those people living in specific countries would use the technology then uh continuation of growing numbers it's also something that's very important whenever you look at the project uh there are many beautiful startups but you have to take into consideration whether you know uh it's something that essentially you know makes people

believe and trust and have confidence in that technology and one of the reasons I don't Claris yes they have a thousand and hundred more cases now and the cases are keep growing and that's something that's something that proves the you know through um the confidence in the platform at least yes and as I said policy initiatives and support from lawmakers and uh an open question because I would love to hear your perspectives if you've had maybe any experience in arbitration or maybe you're coming from technical side I would love to hear from you um that's the current problems uh that I

see and yes I think um the time is up and thank you so much I would love to answer any questions okay okay so if there are any questions there's Kellen here with the roving mic it'd be great to have uh the questions on the live stream as well there's a question here Kevin Thomas um so you mentioned Clarence has the

1100 cases so far roughly what would be the high level breakdown um like you know how they look like um and um what what are your thoughts whether from Clara's experience or from your you know I know it's still beginning an ongoing research but uh you know in integration um Solutions like Claris with uh escrow payments whether whether on chain or of chain oh yes thank you for your question um actually Clarence uh is uh bigger than just uh dispute resolution uh court is one of the depths and uh there is escrow a service that you can use and essentially if you for instance using a

nice car service provided by Claris uh in case you have any dispute that uh you know just being ruled by Clarence court so um whenever I actually you know just to give like the understanding whenever I refer to Clara's cases and how people actually initiate like dispute resolution on the platform I personally that might be not right but I personally it categorized into two groups the first one is when it kind of like goes organically so we have um you know partnership with prediction markets with other platforms and then in case like escrow and then um if the dispute arises from those Services they automatically end up in

Clara's court and there is another group of disputes that are brought non-organically by that I mean that they don't go uh automatically from for instance escrow it's when people bring their dispute uh you know to Clara's platform something that happened with Mexican case for instance so um yeah and for now the second group is the minority of cases most of them they are being resolved when they are brought organically yes I hope I answered your question great oh yeah we can chat later yeah another question here in the middle uh hi I'm Julian hi so uh maybe it's a

naive question people because that's probably a problem with um uh every this dispute resolution system but if there is no escrow if this is like as you said like um something that comes from outside world to you which is of course needed if it is to scale and be more important then you know there is always someone unhappy with the resolution almost in most of the times so how you how you make can we make sure that this enforced and that does not need to end in a in a cart anyway because if if there is like a dispute resolution then that needs to be reconfirmed by the by the Like official legal system this is in in a way that doesn't make sense yeah I get it thank

you so much for the question so there are different types so what he I think mentioned and like essentially Mexican case this is kind of a hybrid system when you have your dispute resolved in Clarisse and then you have a chord like verify it um so that's just one of the use cases that I think essentially more um easy to like give as a use case um so I also wanted to say that Clara's uh platform is I mean I think it's great great but I'm Vice but it cannot resolve all the you know uh justice problems for instance criminal law family law anything like that no it deals with very specific

types of cases and it's good for that and then uh also additionally to answer into a question there is an episcopility of appeal which you know for instance in uh traditional arbitration might not be always the case in Claris there is always party that is not happy and anyone the beauty of it if that anyone can facilitate the appeal so the uh the case would be overruled in the new pool of jury would be essentially drawn and yes yeah hello thanks for your great sharing about the Clara system uh I have several

questions regarding on this uh actually the first question is so claro so the implementation of Clarence is based on the fact that the party says already initially used uh cryptos exchange method in the payment or something so that they can automatically apply clarus as the dispute resolution and my understanding right because if it's in the outer world like in a real world you pay with USD then using implementing Clarence will not be that enforceable if you you invest you pay with USD right okay so Claris has their own token which is pin K token so if you were let's say to

participate in a court as a juror you'd have to stake certain amounts to be drawn and then if your decision rules to be in majority you would have like reward for you know the right decision if not you will lose the stake amount that's just from the jurors side when you want to take your case to Claris you don't have to actually own pnk so uh it actually depends like how you do it yes most of the cases as I said like organically Broad in terms of people uh you know are either familiar with technology or they but they don't really have to know much about blockchain that's one one of my points that now yes it's probably used mostly by people who

are familiar native but it doesn't have to be that way in like I'm sorry that I'm referring to that but like in cases with Mexico people didn't didn't do like they had a third arbitrator that posted the dispiron Claris and didn't own any cryptocurrency didn't I don't know what their level of you know um kind of knowledge but it doesn't have to be that way and one of my objectives in my research is how to actually we take those like small amount of cases that are uh basically being brought by people from non-blockchain uh community and how can we actually make it more

scalable okay I think we're done for time thank you thank you very much Amelia