LegalTech in commercial traffic

The appearance of the legaltech concept in the legal world is causing a real commotion, having generated a heated debate on whether it is going to contribute to an automation of legal tasks that could lead to the disappearance of legal operators (judges, prosecutors, lawyers, notaries, registrars, etc.), which would be replaced by bots and artificial intelligence (AI) systems. We do not know if this will ever happen, but for the moment, the reality is that legaltech is the natural evolution of the growing application of technology that has been implemented in this century to all aspects that concern the human being. , among them, also to the legal world.

And, in fact, technology has been introduced into legal activity for years, so that today it would be inconceivable to make writings with self-copying paper or search for sentences in volumes of jurisprudence as was done in the past. Well, given that the contribution of technology to Law is unquestionable, legaltech intends to go one step further, facilitating the performance of certain tasks that can be standardized, since their artisanal performance does not provide any added value and, on the contrary, can entail the commission of involuntary errors that a computer system would never commit, providing legal certainty.

This would be the case of the “smart contracts”, which are not documents with agreements transcribed to a physical or digital medium, but rather a software programmed with blockchain technology, designed to be executed automatically when a previously defined milestone occurs through the command of programming “if-then” (if-then), without the need for any additional intervention. The application of this type of contract can be very broad, especially with regard to standard stipulations in which the same conditions are collected for a large number of users, so that any eventual breaches would be objective and would entail the same consequences.

That said, it cannot be ignored that, as we said, one of the questions that is in the air is how this technification of legal activity in the sector is going to affect and to what extent competition can affect the practice of traditional law. In this sense, the ruling of September 9, 2021 of the Bundesgerichtshof (Federal Court of Justice) has already been pronounced in Germany, which established that a legal publisher (Wolters Kluwer Germany) can market “Smartlaw”, a software that generates digital contracts using a repertoire of templates fillable with the data provided by the users; which does not constitute an act of unfair competition, nor does it imply a restricted legal service for lawyers according to the provisions of the Teutonic regulations, as it is not considered a legal advice service.

Therefore, although the action of the publisher is not considered illegal, the criterion would be established to establish the line that would separate what is permitted from what is prohibited in this area, which would go through the provision of legal advice, which could only be carried out by lawyers; The function of the software must be limited to creating drafts, whose correctness would not be guaranteed, as they have not been reviewed by a qualified professional. The now-defunct “Ross” worked along these lines, the “robotic lawyer” presented in 2016 by the North American law firm Baker & Hostetler, which, in reality, was limited to being an AI system that combined information from the internet, from its database data and their own experience to offer lawyers possible solutions to the legal questions raised.

In traditional contracts

But legaltech is also applied in traditional contracts that are signed every day in commercial traffic, since there are many drawbacks of manual signing, which requires the parties to be physically together and, in case of question the authenticity of the signatures, it would be necessary to resort to an expert calligrapher. In this way, it is becoming more and more common for contracts and documents to be signed through technological means, either by electronic signature or through platforms that must be based on a trusted digital certificate, since, otherwise, the authenticity of the signature and its authorship.

Legaltech is also applied in traditional contracts that are signed every day in commercial traffic

This was the case examined by judgment 74/2021 of the Provincial Court of Lleida of January 29, 2021 (Rec. 158/2020), which did not admit the signing of a credit agreement through the DocuSign system as evidence, considering that it is an electronic signature platform through which the document is sent to an email and returned signed manually, without there being any proof that the person who signed is who they say they are and without authentication of the account, and that the claimant financial entity bears the procedural burden of expertly proving that the heading corresponds to the defendant, which did not occur.

And it is that the use of technology also entails dangers that force us to be prudent and adopt preventive measures. In this sense, it is important to remember the importance of proper custody of keys and passwords, since the fact that a person who has legitimately had access to them retains them and refuses to hand them over would not constitute a crime. This has been established by the recent ruling 358/2022 of April 7, 2022 of the Criminal Chamber of the Supreme Court (Appeal 2125/2020), which analyzed a case in which members of a religious association created a new web page and registered another brand, after which they changed the access passwords to the Paypal account and the Internet domain, preventing access to the association, and redirected the donors to their new domain.

In this way, said sentence established that seizing the Internet domain does not fit into the crime of misappropriation typified in article 253 of the penal code, considering that a domain name, even if it has economic value, is not a business asset susceptible to appropriation, and, furthermore, because the acts occurred when the defendants were still members of the association. Consequently, it is essential that the owner of a domain, social network profile, platform account, etc., maintain control over the access codes at all times.

What is indisputable is that legaltech is here to stay and will have a growing importance in the commercial field, finding a great ally in the Metaverse, not only because of the intrinsic use of technology in the legal activity carried out in this cyberworld and the facilities and advantages that it will provide for holding events (business meetings, notarial signatures, shareholders’ meetings, etc.), but also because the law firms will have virtual offices and will provide their services in this environment, so the use of technology is not an option, but a necessity.

By Javier López, partner of Écija