A landmark legal statement from a panel chaired by the Chancellor of the High Court has backed the use of smart contracts and has, at one stroke, signalled the potential death knell of conveyancing solicitors.
The announcement was made late yesterday by the UK Jurisdiction Taskforce (UKJT) of the Lawtech Delivery Panel, which is headed-up by Geoffrey Vos.
It says smart contracts, which are blockchain-based automatically-triggered agreements between two parties, should be given the same status as traditional house conveyancing contracts, making them enforceable under English Law.
The statement says smart contracts are set to revolutionise the processes of both conveyancing and applying for a mortgage.
Both will be significantly speeded up now that smart contracts have been confirmed as legally enforceable.
Following the announcement, buyer and seller could use such a contract without the need for ‘expensive services’ such as a solicitor and instead complete the sale between themselves.
“The worldwide smart contract market is expected to reach $300m by 2023 and the World Economic Forum predicts 10% of global GDP will be stored on the blockchain by 2027,” says Jenifer Swallow, (left) Director of the Lawtech Delivery Panel, which is a law industry initiative to prompt tech development within the sector.
“It is great to see the adaptability of our common law system to fast-changing technology, demonstrated in this landmark legal statement from the UKJT.”
Now that the way has been cleared following a lengthy consultation, it will take several years for the institutions involved in conveyancing and mortgage lending to adopt smart contracts, assuming they do at all, and for the tech to be developed. Smart contract have already been trialled as part of the Land Registry’s Digital Street project.