Technology disrupting law

Here are two interesting developments in the always-trending world of the impact of hi-tech on the legal profession.

Many lawyers are sick of reading about how disruptive technology is going to ruin their lives. But the topic is now so embedded in the mainstream that the Organisation for Economic Co-operation and Development (OECD) has written a paper all about it, called Protecting and promoting competition in response to “disruptive” innovations in legal services.

It is not good news for those who want the subject to go away. Essentially, the paper is a call to competition authorities in the member governments of the OECD - including ours - to use the benefits brought about by new tech to introduce more competition, for example, to allow unregulated providers into the market. I suspect ours does not need this advice, since it has already acted on it.

But here is the sort of thing that the OECD is saying (doubtless the Legal Services Board staff and members are dancing around the office to their Amy Winehouse songs): ‘The exclusivity enjoyed by legal professionals, and the precise scope of activities to which it applies, is becoming unclear as unlicensed entrants offer a widening range of services.…  legal professional self-regulators may be unable, or ill-suited, to identify accommodations that permit innovative entrants to serve consumers … [Competition] authorities can play a role in advocating for regulatory systems that reflect current market realities and ensure market access for pro-competitive disruptive innovations.’

The paper tries hard to assess the potential problems of the brave new world as well. On online legal advice, it admits that: ‘Consumers of automated services, including legal professionals, may be unable to assess the quality of algorithms or systems design due to a lack of technical knowledge.’

On lawyer rating, while seeing that it reduces some of the old information asymmetry, by giving consumers some knowledge in advance about a lawyer they might consult, it introduces its own new information asymmetry: ‘It may not always be transparent whether reviews are paid advertisements, if a reviewer is withholding information that would be relevant to a consumer’s decision, or if reviews are manipulated by service providers.’

The paper was prepared as background for a meeting of the OECD Working Party No.2 on Competition and Regulation on 13 June 2016. At this stage, the document principally asks questions, but the trend is clear. Even the OECD is devoting time to this subject now.

The second development is a case which has been referred to the European Court of Justice for decision – Case C-99/16 Lahorgue. It raises an issue which was always going to crop up, as a result of the increasing use of online methods for filing court proceedings. Many jurisdictions now have systems where, at least for some proceedings, only online methods can be used between the lawyer and the court.

This is the case in France for certain areas of work. As a result, when a lawyer registered in Luxembourg wanted to undertake work in this virtual area, by exercising his freedom to provide a temporary service across borders in accordance with the provisions of the lawyers services directive (77/249/EC), he requested the right to access the French Virtual Private Network of Lawyers (RPVA) router and be provided with an authentication key.

His request was denied, on the grounds that he had to act in conjunction with a local lawyer - which is a permitted restriction under the directive - and only local lawyers had access to the system. So he went to court in Lyon. The court referred the question to the European Court of Justice for a preliminary ruling on the matter.

The court has already ruled in two previous cases about what ‘acting in conjunction with a local lawyer’ means (but before the virtual world was invented) – Case 427/85 Commission of the European Communities v Federal Republic of Germany and Case 294/89 Commission of the European Communities v French Republic. It took a very liberal line in both.

In essence, it said that, even if home (here French) lawyers had to go through lawyers registered with a particular court in order to file proceedings, that did not apply to cross-border lawyers (because they could never be registered with any court in that country). And, in any case, no strict framework should be laid down for ‘acting in conjunction with’, since lawyers are professionals subject to ethics and should be regarded as capable of agreeing on a form of cooperation appropriate to the client’s instructions.

We will see whether the court will continue this liberal line of interpretation in the new world, but I would be surprised if it did not. Surely, if something was already possible in the real world, new restrictions should not be imposed following the introduction of a virtual system?

Jonathan Goldsmith is a consultant and former secretary-general at the Council of Bars and Law Societies of Europe, which represents around a million European lawyers through its member bars and law societies. He blogs weekly for the Gazette on European affairs