Blockchain or Buzzchain?  Some early considerations of blockchain’s use in legal services

Date: February 8, 2018


HBA Legal’s risk and cyber security experts have been enjoying some robust discussion about the potential merits and pitfalls of blockchain technology applied in the legal industry. Amid the flurry of stories about how this technology will – or won’t – change the world, what do we need to consider in relation to delivering legal services?

HBA’s risk management and cyber security lead Rosan Santangelo said: “The use of blockchain technology will come with its own risks and rewards for industries such as insurance, finance and health; which all handle sensitive personal information.  The dichotomy of transparency and security gives rise to divergent concerns.  This is particularly so when it comes to the sharing of information between different entities.

“A new type of common interest privilege specific to this type of platform may develop over time.  At the very least, the courts, at some stage, will need to consider whether publication on such forums is placing the information in the public domain. “

HBA Solicitor Sandra Raub, recently returned from the Internet Governance Forum in Geneva last December, said some practical considerations for legal firms dealing with blockchains for transactions are:

  1. The trust in blockchain lies in the fact that hundreds if not thousands of people have a copy of the chain on their computer and verify the chain through mining the chain. In a smaller blockchain for smart contracts, the pool of individuals using the chain is smaller. Does this make smaller blockchains less secure as there are less vulnerable actors to target?
  2. As blockchains grow larger, they are increasingly difficult to store due to their size. If clients are expected to store the chain that contains their own smart contract, will they pretty much have to dedicate an entire computer to storing an entire chain that contains lots of smart contracts, including theirs, for the sake of being able to verify?
  3. While the blockchain itself is virtually unhackable due to its decentralized structure, (and that fact that it stores multiple copies of itself in different places), would wallets or other access points be increasingly vulnerable?
  4. While international cyber law is a hot topic, how far will it need to consider jurisdiction and privacy?

“We see Buzztechnology when people are looking for applications for technology, rather than trying to solve problems,” observed Craig Lee, HBA’s ICT Solutions Engineer.

“Blockchain is great for large public distributed datasets (like cryptos) but has limited application in a customer/service provider environment. A digital file’s authenticity and integrity can already be guaranteed through the use of digital signatures.   For example, a legal service provider could sign a document with a private key and then another party could verify it and add their signature. That document can then not be interfered with and is as secure as one in a block chain and much simpler.

“How blockchain is applied to smart contracts remains to be seen.”

Clearly there will be some development before the evolving legal industry will turn to blockchain, but with the industries shifting focus to IT solutions to aid faster, cheaper client service, it may not be that far away.



Rosan Santangelo, Partner

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Disclaimer: This article is intended for informational purposes only and should not be construed as legal advice. For any legal advice please contact us.

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