The government came bearing gifts. Courts and legal services minister Sarah Sackman KC this week announced a £1.5m lifeline for efforts to nurture and promote legal technology under the LawtechUK programme, which had been due to wind up this month after more than six years of work. She also revealed that legal services and lawtech would form part of the government’s forthcoming industrial strategy.
‘Lawtech and continued innovation are essential to the continued success of the legal services sector and bolstering the UK’s global competitiveness,’ Sackman said.
It is possible that the master of the rolls had an early sight of the announcement, made at the UK Lawtech Conference in Mansion House, London, this week. Opening the event, Sir Geoffrey Vos – never one to underplay the potential of new technologies – told delegates: ‘Now, more than ever, we need to support UK initiatives to utilise AI and machine learning in the delivery of legal services and, perhaps even more importantly, to find ways to unlock international digital trading.’
With the right support, the MR said, the UK could become a serious competitor to the US in the $30bn global lawtech market.
Much has changed since 2018 when the Ministry of Justice, under David Gauke, first nailed its colours to the lawtech mast by setting up the LawtechUK Panel. That, of course, was before the arrival of the game-changer generative AI.
At first sight, a ‘lawtechUK ecosystem tracker’ published by the programme this week portrays a thriving sector. The tracker counts 376 lawtech businesses in the UK, 270 of which were founded here. UK-founded lawtech companies have raised £1.7bn in total investment.
Three-quarters of this investment, however, went into companies operating in the established and potentially lucrative ‘documents and contracts’ market. Ventures attempting to create access to justice find it much harder to raise funds: only 8% of LawtechUK startups are classed as business-to-consumer ventures.
‘Lawtech and continued innovation are essential to the continued success of the legal services sector’
Sarah Sackman KC, legal services minister
At the conference, Sackman spoke of the potential of technology to help citizens ‘solve their legal problems by themselves’. This clearly aligns with the MR’s ambition to create an ecosystem of online dispute-resolution services. ‘LawtechUK should be seen alongside the creation of the Online Procedure Rule Committee, the digital justice system and the initiatives that are inspiring lawyers to make practical valuable use of AI systems to improve and reduce the costs of the legal services they provide for their clients,’ Vos told the event.
In its next phase, the LawtechUK programme will seek to continue nurturing access-to-justice ventures through its training, mentoring and networking activities.
The bulk of the MR’s speech, however, concentrated on another arm of the programme – the UK Jurisdiction Taskforce, which he chairs. The taskforce aims to remove impediments to the adoption of new technologies by clarifying the law: it has already tackled crypto-assets, digital securities and insolvencies. One fruit of this work is a two-clause bill going through the House of Lords to establish property rights in a third category of ‘legal thing’, digital assets which do not meet the criteria of ‘choses in possession’ or ‘choses in action’.
The taskforce is tackling three new projects, Vos said. One, at the request of the government, is to produce guidance on the concept of ‘control’ of third-category assets. This will be ‘vital’ in providing the market confidence needed for the adoption of English law in transactions involving digital assets.
Another project – ‘perhaps the most exciting’ – is the formation of an international taskforce bringing together some of the best legal thinkers in the digital space from the main private law jurisdictions around the world.
However, the project likely to attract the most attention drags the MR’s taskforce into the cauldron of controversy around artificial intelligence regulation. This will be a statement on the law concerning liability for harms caused by AI, ‘with an eye to whether or not statutory intervention or underpinning is required’.
Such a statement is urgently needed, he said, citing ‘genuine market uncertainty about how and when developers of AI tools and those who use them might incur legal liability when things go wrong’. The EU is already working on a liability directive which would introduce a ‘presumption of causality’, he noted.
All things considered, the taskforce and LawtechUK ‘still have a long way to go’, Vos said. But, given the right help and – in contrast to ‘excessive caution’ in other countries about embracing technology in the law – ‘LawtechUK can be an example to the world in unlocking the economic advantages of digital trading, digital legal services and online dispute resolution’.
We shall see if the Treasury’s generosity endures.
