3 Lawyers on How Decentralized Law Will Impact Transactions Worldwide
Top lawyers reveal the potential of Decentralized Law (DeLaw) in a $26.7 trillion global e-commerce market
Key Takeaways
- Decentralized Law (DeLaw) could transform a $713 billion legal industry by leveraging blockchain technology to resolve disputes in hours rather than the current global average of 650 days, potentially saving up to 1% of GDP annually in countries with inefficient justice systems.
- Three legal professionals — a FinTech lawyer, wealth management specialist, and dispute resolution expert — agree that DeLaw offers promising solutions for cross-border transactions and international disputes, but caution that human judgment remains crucial for complex cases.
- Smart contracts could revolutionize international business agreements, while VAIOT’S decentralized dispute resolution system may dramatically reduce the time and cost associated with settling legal matters, especially in the $26.7 trillion global e-commerce market.
Addressing Global Legal System Inefficiencies
In 2016, the United Nations Commission on International Trade Law (UNCITRAL) Working Group III concluded its efforts to create a global online dispute resolution platform without reaching a consensus. This setback, however, didn’t diminish the growing momentum for innovative legal solutions in an increasingly digital world. Here is where Decentralized Law, or DeLaw comes in — a concept that’s gaining traction among legal professionals and technologists alike.
The idea behind DeLaw is to envision a process that can work within the confines of online dispute resolution, and business operations but on an international level, without necessarily being tied to a single governing body like the UN, explains Silvia Calls, a Fintech lawyer with 15 years of experience.
But why is DeLaw gaining attention now? Piotr Cedro, an expert in dispute resolution, points to a pressing need:
“Currently, we have so many issues with complicated procedures in business matters, especially across borders. It’s neither time nor cost-effective. DeLaw could potentially resolve disputes in days or even hours, compared to the months or years traditional systems often require.”
As businesses and individuals increasingly engage in cross-border transactions, the limitations of traditional legal frameworks become more apparent. According to a 2022 World Bank report, cross-border data flows grew by 20 times between 2007 and 2017, and predicted to grow 4 times more in the upcoming years, yet legal systems have struggled to keep pace. DeLaw proponents argue that this new approach could close the gap, offering a more responsive and adaptable legal framework for our interconnected world.
But what exactly is DeLaw, and how might it reshape our legal landscape?
To explore these questions, we’ve spoken with three legal professionals at the forefront of this emerging field…
What is DeLaw?
Silvia Calls brings a unique perspective to DeLaw, drawing from her extensive experience in Fintech:
“Decentralized law has its roots in decentralized finance (DeFi), which is built on blockchain technology. It’s about peer-to-peer transactions without intermediaries, backed by trust in the system rather than centralized authorities.”
Silvia highlights that DeLaw is not just about cryptocurrencies but extends to various aspects of legal practice. “Smart contracts, for instance, are a crucial component of DeLaw. They’re self-executing contracts with the terms directly written into code,” she elaborates.
How is The Legal Landscape Adapting to DeLaw?
According to Silvia, governments and regulators are slowly catching up.
“In Spain, for example, the market value regulation now acknowledges DLT (Distributed Ledger Technology) operations for settlements and accountability. This is a significant step forward,” she notes.
She also points out the growing acceptance of tokenization in business contexts. “In Spain, you can now establish in a company’s bylaws that its shares can be tokenized. This opens up new possibilities for asset management and investment.”
Despite the significant growth of the legal tech market in the past 3 years and the industry projections, access to justice remains a critical issue worldwide.
The World Justice Project reports that 5.1 billion people (World Justice Project, 2024) — two-thirds of the global population — lack meaningful access to justice.
Against this backdrop, Decentralized Law (DeLaw) is emerging as a potential solution, leveraging blockchain technology to address longstanding challenges in the legal sector.
What Exactly is Driving This Shift Towards DeLaw?
Silvia explained:
“The momentum for DeLaw stems from the same forces that propelled Online Dispute Resolution (ODR) for consumer disputes. There’s a pressing need for accessible, efficient legal processes, especially for cross-border transactions and disputes.”
This need becomes particularly apparent when considering the global nature of modern commerce. According to the United Nations Conference on Trade and Development, global e-commerce sales hit $26.7 trillion in 2019, highlighting the potential for international disputes that traditional legal systems may struggle to handle efficiently.
The Mechanics of DeLaw
To delve deeper into the implications of DeLaw, we also spoke with Tomasz Krzywanski, an attorney specializing in wealth administration and tax planning, and Piotr Cedro, an expert in dispute resolution. Their insights, combined with recent data and trends, paint a picture of a legal landscape on the brink of significant change.
DeLaw isn’t merely about digitizing legal processes; it represents a fundamental shift in how law and business operations are conceptualized and delivered.
At its core, DeLaw leverages blockchain technology and smart contracts to create a more transparent, efficient, and accessible legal system.
Piotr Cedro elaborates, “The key difference is that we have the ability to have specific, content-oriented DeLaw resolution systems. It’s not about replacing traditional courts, but about creating specialized platforms for different types of legal matters.”
The potential of this approach becomes clear when we consider the current inefficiencies in traditional legal systems.
For instance, enforcing a contract takes an average of 650 days globally, with costs often exceeding 30% of the claim value.
DeLaw proponents argue that blockchain-based smart contracts could dramatically reduce both time and costs.
How Can DeLaw Leverage New Technologies to Modernize The Legal Industry?
One of the most promising applications of DeLaw is in the use of smart contracts.
These self-executing contracts with terms directly written into code have the potential to improve business transactions and law enforcement.
Tomasz Krzywanski sees immense potential here, particularly for international transactions.
To put this in perspective, consider that cross-border transactions often involve multiple legal systems, languages, and currencies.
A report by Activa Capital found that traditional cross-border payments can take 2–5 days to settle and cost up to 10 times more than domestic payments. Smart contracts, by automating and standardizing these processes, could significantly reduce both time and cost.
But perhaps the most transformative potential of DeLaw lies in dispute resolution.
Piotr Cedro envisions a future where disputes can be resolved much more efficiently:
“With DeLaw, we could potentially resolve disputes in days or even hours, compared to the months or years it can take in traditional courts.”
This efficiency gain could have substantial economic implications. The EU Justice Scoreboard reports that inefficient justice systems can cost up to 1% of GDP annually.
By streamlining dispute resolution, DeLaw could potentially save billions in economic output.
Challenges in DeLaw
Every great idea or solution might have to overcome some challenges before implementation and regularization.
In the case of DeLaw, Tomasz Krzywanski notes, “Countries and international institutions might be reluctant to cede power to decentralized systems. Enforcement of DeLaw judgments across borders could be challenging without prior agreements.”
This observation is supported by the slow progress in international regulatory frameworks for cryptocurrencies and blockchain technology.
Cultural differences also pose a challenge. As Piotr Cedro points out,
“If we connect people from different parts of the world, they may have different views of what’s fair, of what is just, of what the outcome of the dispute should be.”
This concern echoes findings from comparative legal studies, which highlight how cultural and legal traditions can significantly influence perceptions of justice and fair process.
Despite these challenges, the pressing growth of the market need for these solutions as well as the steady adaptation from governments are signs that the legal industry is changing. Thus, DeLaw will be a key player in this change.
A future full of possibilities
Silvia Calls emphasizes the importance of human judgment, especially in complex cases: “AI can be a powerful tool, but decisions that significantly affect human lives should still involve human judgment.”
This is why mechanisms developed by VAIOT such as DDRS which involves expert panels of Jurors pose the perfect balance between AI innovation and human interaction.
Looking ahead, our experts see a future where DeLaw coexists with traditional legal systems, each complementing the other. Tomasz Krzywanski advises legal professionals to prepare for this future:
“Lawyers need to be less conservative and more open to change. We need to shift our focus from being legal advisers to becoming legal analysts who can understand and work with blockchain logic, smart contracts, and decentralized systems.”
This shift is already beginning to manifest in legal education. Several top law schools, including Harvard and Stanford, have introduced courses on blockchain and its legal implications.
The American Bar Association has also recognized the importance of technological competence, making it an ethical duty for lawyers in many states.
The Future of Law
As we stand at this juncture in legal history, it’s clear that DeLaw is not just about technology — it’s about reimagining the very nature of law and justice in our increasingly interconnected world.
While challenges remain, the potential benefits in terms of efficiency, accessibility, and global standardization are too significant to ignore.
As Piotr Cedro puts it: “We want law to understand us, not law to shape us.”
In the coming years, we can expect to see continued innovation in this space, with DeLaw potentially transforming everything from routine legal tasks to complex international disputes.
For legal professionals, policymakers, and indeed anyone interested in the future of justice and governance, keeping abreast of developments in DeLaw will be crucial. The future of law is decentralized, and it’s unfolding right before our eyes.
Check the full interviews with these steamed law professionals and join our community to learn more about VAIOT and DeLaw!
The Legal Expert, Silvia Calls: AI and Blockchain in the Legal Industry
The Legal Expert, Piotr Cendro: This is Why Decentralized Law Will Transform Business Disputes
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