SRA legal access challenge, reports and next steps

Following the conclusion of the SRA and Nesta Legal Access Challenge, joint reports from both the SRA and Nesta have been released which highlight the lessons learned and the future next steps that will be taken to support the development of innovation. The SRA report focuses on how the lessons learned from the challenge are influencing regulation, and how this can be used to support the development and responsible adoption of legal tech. Whilst the Nesta report gives an overview of the challenge, looking at what innovations were supported, and what was learned about the wider innovation environment in the UK.

The Legal Access Challenge was a £500,000 Challenge Prize, split across early stage digital technology solutions that could directly help individuals and small medium enterprises (SMEs) better understand and resolve their legal problems. The Challenge was made possible by a grant to the SRA from the £10m Regulators’ Pioneer Fund launched by The Department for Business, Energy and Industrial Strategy and administered by Innovate UK. The fund aimed to help UK regulators to develop innovation-enabling approaches to emerging technologies. The two final winners were announced in April. The winning teams were RCJ Advice for its collection of digital tools that enable survivors of domestic abuse to get legal support, and Mencap and Access Social Care for their virtual assistant which helps people to understand and exercise their social care rights.

The 18-month challenge has been seen as successful by both the SRA and Nesta, with both seeing potential for legal technology to improve legal access. The reports conclude that the SRA’s regulation is not a barrier to innovation, but that many find it difficult navigating overlapping regulatory regimes across, for example, legal services, financial services and information management. The Challenge also showed that innovation in public-facing legal technology is mainly coming from unregulated organisations.

The scale and diversity of interest in the Challenge – with 117 applications – resulted in the Regulators Pioneer Fund providing an additional £250,000 of funding.

Feedback on the Challenge from the eight finalists showed:

  • seven had seen the development of their solution accelerated
  • seven had been introduced to new and useful contacts, with five building new partnerships
  • six had support that they otherwise would not have been able to access.

The SRA report sets out its next steps, including producing guidance to help innovators understand its rules, the requirements of overlapping regimes and how they can design products that enable regulated law firms to interact with them. It will also continue to work closely with other regulators and build networks. This includes being part of recently announced Lawtech Sandbox developed by Tech Nation.

Anna Bradley, SRA Chair and Chair of the Challenge judging panel said:
“Too many individuals and small businesses struggle to access expert help when they need it. This can be the difference between someone losing their job, home or family; or a business succeeding or failing.”

I believe tech will be a game-changer for access to legal support. Covid-19 has brought into even sharper focus the importance of digital solutions. However, it’s clear that the adoption of technology has been slow when it comes to public facing legal services.

The Challenge showed the range of ideas out there, and the potential for it to help people in vulnerable situations. I was pleased that our own regulation is not seen as a barrier to the development of tech in the legal sector but we want to do more to support innovators to navigate what can be complex and overlapping regulation.”

See the SRA’s full report on the challenge.

See Nesta’s full report on the challenge. 

 

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Mayson Report: Final report published

The highly anticipated denouement of the Independent Review of Legal Services, which was first launched in October 2018, was published on the 11th June. The 340-page report which has been informed by a number of working papers, as well as an interim report, which has been fed into by a variety of actors in the legal sector is entitled Reforming legal services: Regulation beyond the echo chambers.

Professor Mayson has suggested in the report that all providers of legal services, should be registered and regulated by a single regulator, whether they are legally qualified or not. He suggested that regulation should move from the regulation of lawyers to the regulation of legal services, with different levels of regulation being applied depending on the public risk inherent in the work. By extension, this would mean that traditional legal qualifications would no longer be the sole entry point into the profession.

The report has been submitted to the Lord Chancellor, however, the Ministry of Justice in the UK has suggested that they currently do not plan to review the Legal Services Act 2007. Professor Mayson has therefore suggested shorter-term measures that can be introduced, as he feels that action must come sooner rather than later.

Professor Mayson suggested that especially as demand has moved online, the public are increasingly unaware of their rights in relation to regulated professionals, whilst lawyers are operating under a system where only a small percentage of their work is covered under the regulatory regimes they are supposed to work under. “The conclusion of this review is that the regulatory framework should better reflect the legitimate needs and expectations of the more than 90% of the population for whom it is not currently designed,” he wrote. The new framework would also allow for new provides such as lawtech providers to act within a regulated sector. 

Professor Mayson also described the current arrangement of 10 front-line regulators plus an oversight regulator as “cumbersome”, and recommended replacing it with a single, independent regulator – the Legal Services Regulation Authority (LSRA). “The requirement for flexibility, consistency, coherence and coordination across regulation within the legal services sector necessarily leads to a single regulator,” the report said.

Download a full copy of the report (PDF).

The response from regulators has been mixed with CILEx (read the CILEx response) and the Association of Costs Lawyers (read the Association of Costs Lawyers response) backing professor Mayson’s report, and the LSB (read the LSB response) saying that they will carefully consider his recommendations in relation to their ongoing work in reforming legal regulation. Whilst the Law Society (read the Law Society response) has suggested that given the ongoing COVID-19 crisis, now is not the time to discuss reforms.

Also see the article at Legal Futures for a further breakdown of the regulatory responses.

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LSB podcast on how education might adapt to technology

In its latest episode of the ‘Talking Tech’ podcast, the LSB interviews Dr Adam Wyner, Associate Professor of Law and Computer Science at Swansea University. The podcast focuses on how education and regulation might change to ensure legal professionals are better equipped to deal with and meet the challenges posed by a new tech-focused environment, as well as how these individuals can start to drive technological innovation.

Listen to the LSB podcast (42 minutes long)  and download the accompanying paper as a PDF.

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AI Regulation in Europe

Abstract

With the regulation of Artificial Intelligence (AI), the European Commission is addressing one of the central issues of our time. However, a number of core legal questions are still unresolved. Against this background, the article in a first step lays regulatory foundations by examining the possible scope of a future AI regulation, and by discussing legal strategies for implementing a risk-based approach.

In this respect, I suggest an adaptation of the Lamfalussy procedure, known from capital markets law, which would combine horizontal and vertical elements of regulation at several levels. This should include, at Level 1, principles for AI development and application, as well as sector-specific regulation, safe harbors and guidelines at Levels 2-4. In this way, legal flexibility for covering novel technological developments can be effectively combined with a sufficient amount of legal certainty for companies and AI developers.

In a second step, the article implements this framework by addressing key specific issues of AI regulation at the EU level, such as: documentation and access requirements; a regulatory framework for training data; a revision of product liability and safety law; strengthened enforcement; and a right to a data-free option.

Citation
Hacker, Philipp, AI Regulation in Europe (May 7, 2020). 

Download the full paper from the SSRN

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The Sandbox Paradox: Balancing the Need to Facilitate Innovation with the Risk of Regulatory Privilege

Abstract

In recent years, “regulatory sandboxes” have gained a great deal of attention from policymakers, regulators, and regulatory scholars. Regulatory sandboxes are closed testing environments in which specific firms are able to experiment with new and innovative business models or products with reduced regulatory burden or expedited regulatory decisions. Sandbox advocates support or defend regulatory sandboxes as a way to promote entrepreneurialism and innovation within the financial sector while still maintaining mechanisms for consumer protection and regulatory oversight. Opponents of sandboxes tend to focus on the potential risk to the consumers who use the services being tested in the sandbox. However, there is a third group affected by regulatory sandboxes: the competitors of firms in the sandbox. By definition, regulatory sandboxes grant certain advantages to specific firms without extending those same privileges to other firms. The goal of this paper is to examine the potential regulatory advantages sandboxes offer, consider the possible risks and costs associated with those advantages—including the potential to distort the market and incentivize cronyism—and propose best practices that policymakers could use to mitigate those costs.

Citation
Knight, Brian and Mitchell, Trace, The Sandbox Paradox: Balancing the Need to Facilitate Innovation with the Risk of Regulatory Privilege (March 26, 2020). South Carolina Law Review, Forthcoming; Mercatus Research Paper, 2020; C. Boyden Gray Center for the Study of the Administrative State Research Paper No. 19-36.

Available from the SSRN site.

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LSB publishes collection of articles on lawtech and regulation

The Legal Services Board (LSB) has published a collection of 11 focused on lawtech and regulation as part of its ongoing work in the area. The collection, entitled ‘Perspectives on Lawtech and Regulation’ includes contributions from Chris Handford, Director of Regulatory Policy at the SRA, discussing the regulatory challenges of lawtech; Mariette Hughes, Head Ombudsman at the Legal Ombudsman, discussing the use of big-data in decision making and Sir Geoffery Vos, Chancellor of the High Court discussing regulatory barriers of innovation.

The publication follows on from a series of papers and podcasts produced by the LSB last year, which included work from Alison Hook, discussing international approaches to regulating legal technology; Professor Roger Brownsword, discussing regulatory lessons from medicine and finance; Professor Noel Semple, discussing technological innovation and the Legal Services Act; and Dr Anna Donovan, on the regulation of blockchain.

The LSB has also announced that it plans to establish an expert reference group, made up of technology experts, practitioners and regulators, allowing individuals and regulators to share ideas and knowledge and engage with regulatory issues around technology collectively.

Matthew Hill, Chief Executive of the Legal Services Board has said:  “One of the Legal Services Board’s roles is to help foster a regulatory climate that supports innovation and increases access to legal services for everyone who needs them while maintaining high standards. The impact of COVID-19 has brought into even sharper focus the vital role that technology can play in keeping the wheels of justice turning. We want to remove barriers to innovation, and we encourage regulators to explore how we can use technology to reshape legal services to better meet the needs of society.”

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BRAK sets up new committee on legal tech

The 7th Statues Assembly, “the parliament of the legal profession” of the Bundesrechtsanwaltskammer (BRAK) held its inaugural meeting on November 4th 2019. Through a clear majority, the assembly voted to not only retain all previously established committees but also to set up a new 7th committee on legal technology.

For more information about the new committee, see the article on the BRAK site (in German).

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3 Female Lawyers Tackling Jurisdiction to Define The Cryptocurrency Ecosystem

Stable coins, the rise of custodial solutions and the recent announcement of Fidelity launching an institutional platform for Bitcoin and Ethereum are all designed to make it easier for institutional investors to partake in the cryptocurrency market.

Yet a number of questions arise as the cryptocurrency ecosystem continues to expand its reach to traditional financial markets. Trust must be built among new market participants, countries leading innovation need to respond to legal concerns and actions should to be taken to pave the way for both accredited and non-accredited investors to step foot into the cryptocurrency market.

As a result, lawyers specializing in cryptocurrency related matters have become key players for ensuring the success of the global adoption of digital assets. Three women lawyers in particular are taking action to help define legal uncertainties currently facing the evolving crypto ecosystem.

Read the full article here

*This article first appeared in Forbes magazine. 

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Regulating Artificial Intelligence: Proposal for a Global Solution

Given the ubiquity of artificial intelligence (AI) in modern societies, it is clear that individuals, corporations, and countries will be grappling with the legal and ethical issues of its use. As global problems require global solutions, we propose the establishment of an international AI regulatory agency that – drawing on interdisciplinary expertise – could create a unified framework for the regulation of AI technologies and inform the development of AI policies around the world. We urge that such an organization be developed with all deliberate haste, as issues such as cryptocurrencies, personalized political ad hacking, autonomous vehicles and autonomous weaponized agents, are already a reality, affecting international trade, politics, and war.

Paper Available Here

Olivia J. Erdelyi, University of Canterbury – College of Business and Law & Judy Goldsmith, University of Kentucky – Department of Computer Science

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