Author Archives: hksar gov

     Following is a question by the Hon Starry Lee and a reply by the Secretary for Constitutional and Mainland Affairs, Mr Patrick Nip, in the Legislative Council today (June 6):

Question:

     In November last year, the Government published a Consultation Paper on Review of Electoral Arrangements, launching a public consultation on three issues related to elections, including the polling hours. The consultation report was released last month. In this connection, will the Government inform this Council:

(1) as some members of the public are of the view that the existing polling hours and the time taken in counting votes are unduly long, causing impacts on society, the electors and the candidates, but the consultation report proposes that the polling hours of the Legislative Council (LegCo) and District Council (DC) elections be maintained, of the authorities’ measures to alleviate the relevant impacts;

(2) as the Government has indicated in the consultation report that it will study the making of arrangements to enable those civil servants who serve as polling staff or are on shift on the polling day to cast their votes in advance, and to enable eligible electors who are Hong Kong permanent residents working or residing on the Mainland to cast their votes in advance at the offices of the SAR Government on the Mainland, whether such studies can be completed expeditiously so that the relevant arrangements can be implemented in the 2020 LegCo general election; and

(3) whether it will review the vote counting arrangement for the election of District Council (second) functional constituency seats in LegCo, such as by drawing reference to the vote counting arrangement for geographical constituencies in which a polling station will be converted into a counting station immediately after the close of poll for counting votes on the spot; whether it will conduct a feasibility study on introducing electronic counting to LegCo and DC elections; if so, of the details; if not, the reasons for that? 

Reply:

President,

     My reply to Hon Starry Lee’s question is as follows:

     The Constitutional and Mainland Affairs Bureau published the Consultation Paper on Review of Electoral Arrangements in November last year and launched a public consultation that last for about seven weeks on three issues related to electoral arrangements. The public consultation period ended in late December last year. Having collated and analysed the views received, we have published the Consultation Report in mid May to set out the outcome of the consultation and our proposed way forward for the three issues. 

     In respect of the polling hours of Legislative Council (LegCo) and District Council (DC) elections, as mentioned in the Consultation Report, among the written submissions received during the public consultation period, the political parties which supported slightly shortening the polling hours pointed out that Hong Kong’s polling hours were the longest as compared to other countries and regions. The advantages of shortening the polling hours are that the relevant counting work can commence earlier, thereby enabling the venues of the polling stations to be returned as early as possible on the day after the polling day, alleviating the fatigue suffered by the stakeholders concerned, as well as lessening the disturbance caused to the neighbourhood of the counting stations. On the other hand, some political parties and quite a few members of the public who opposed to shortening the polling hours pointed out that if the closing time of the poll was advanced, some electors may not be able to or find it inconvenient to vote because the revised polling hours may conflict with their working hours. After carefully considering all the views and recommendations received for the public consultation, we proposed that the present polling hours of LegCo and DC elections should be maintained for the time being before the Government completes a holistic review on other issues related to polling hours. 

     We will study a host of issues related to polling hours, including the feasibility of extending the time of procurement of venues for setting up as polling and counting stations, use of information technology in the counting process, and formulating alternative arrangements for electors who are unable to go to polling stations in person on the polling day to vote due to the shortening of polling hours, etc. We will critically examine the various operational details and legal issues involved, with an aim to ensuring that elections are conducted in a fair, open and honest manner. 

     During the public consultation period, we also received proposals from political parties and LegCo Members on arranging advance polling for civil servants who serve as polling staff and who are on shift on the polling day, and allowing eligible electors who are Hong Kong permanent residents working/residing in the Mainland to cast their votes at the offices of the Government in the Mainland. While examining the proposal on formulating advance polling arrangements for civil servants who serve as polling staff and who are on shift, we must carefully consider the storage and safe-keeping of the marked copies of the final register, ballot papers and ballot boxes between the commencement of advance polling and the actual polling day, and how to regulate exit polls conducted on the advance polling day, so as to prevent electors’ voting preference on the actual polling day from being influenced by the results of these exit polls. Besides, to ensure that elections are conducted in a fair, open and honest manner, any proposed arrangements for polling outside Hong Kong must be critically examined, such as how the polling and counting process could be effectively monitored by candidates and their agents, transportation of ballot papers and ballot boxes to and from polling stations outside Hong Kong, as well as the relevant arrangements during polling and counting and application of Hong Kong’s relevant electoral legislation and regulation during the process, the risks involved in the process and ways of handling any emergency and unforeseen incidents occurred at polling stations outside Hong Kong, etc.

     As regards expediting the counting procedure, the Registration and Electoral Office is proactively studying ways to introduce electronic counting of votes for the DC (second) Functional Constituency (DC (second) FC) in future LegCo elections, taking into account the technical aspects, work flow and cost-effectiveness, etc. We have examined the feasibility of counting the votes of DC (second) FC in polling stations. We consider that this option would involve much operational difficulty as polling staff are already responsible for the counting of votes of the geographical constituency, and most of the polling stations need to be returned to the venue management in the early morning on the day following the polling day. As for DC elections, since the number of ballot papers for respective constituencies is comparatively smaller, the implementation of electronic counting of votes may not significantly reduce the counting time and achieve cost-effectiveness. As such, we do not recommend the implementation of electronic counting of votes in DC elections for the time being. We will continue to review the relevant procedures and examine whether there is any room for streamlining the counting procedure.

     The raft of measures mentioned above, if implemented, would help facilitate early announcement of election results and alleviate the fatigue suffered by relevant stakeholders. We will proactively study and follow up on these issues, with a view to realising some of the measures as early as in the 2020 LegCo election. 

     Thank you Mr President. read more

The following is issued on behalf of the University Grants Committee:

     The Task Force on Review of Research Policy and Funding launched a consultation exercise today (June 6) to solicit views from stakeholders on its preliminary recommendations.

     At the invitation of the Chief Executive as announced in her Policy Address in October 2017, the Task Force was set up under the aegis of the University Grants Committee (UGC) to take a holistic review on the existing research support strategy and the level and allocation mechanism of research funding for the higher education sector in Hong Kong. Having studied the prevailing research landscape in Hong Kong and making reference to the experience of the Mainland and jurisdictions overseas, the Task Force has consolidated its review findings and preliminary recommendations in an Interim Report for Consultation (Interim Report).

     The salient preliminary recommendations include increasing research funding; setting up a Research Matching Grant Scheme to boost private research and development expenditure and donations; introducing three fellowship schemes to support the training of research talents; incentivising cross-institutional/cross-disciplinary collaborations; and strengthening the liaison among research funding bodies. The Interim Report has been endorsed by the UGC and uploaded to the UGC website: www.ugc.edu.hk.

     In addition to conducting briefings for the heads of UGC-funded universities, heads of self-financing degree-awarding institutions and members of the Research Grants Council and a symposium for administrators, academics and researchers, the Task Force is reaching out to gauge views from other stakeholders on the issues covered in the Interim Report to converge insights for the betterment of Hong Kong’s development in research. Members of the public are also welcome to tender their views to the Task Force.

     The Chairman of the Task Force, Professor Tsui Lap-chee, appealed for views from stakeholders to facilitate the finalisation of recommendations with a view to building a stronger foundation for the research work of the higher education sector, enabling the research community to flourish, and promoting the development of innovation and technology, in order to meet the needs of the development of Hong Kong in the long run.

     The consultation exercise will close on July 10, 2018. All views collected will be studied and duly considered by the Task Force for incorporation as appropriate in its final Review Report for submission to the Government later this year. read more

     Following is a question by Hon Wilson Or and a written reply by the Secretary for Transport and Housing, Mr Frank Chan Fan, in the Legislative Council today (June 6):    Question:      The Hon… read more

     Following is the speech by the Secretary for Financial Services and the Treasury, Mr James Lau, at 2018 Annual Conference of In-House Lawyers hosted by Law Society of Hong Kong today (June 6):
 
Thomas (President of Law Society of Hong Kong, Mr Thomas So), Maggie (Chairlady of In-House Lawyers Committee, Ms Maggie Tsui), distinguished guests, ladies and gentlemen,
 
     Good morning. I am very excited to join you all at today’s conference. Technology is very close to my heart as I studied computer science at the University of Waterloo many years ago. With the revolutionary advances in technology especially in the last few years, we have seen Industrial Revolution 4.0 and your conference theme of Technology and Law is a very apt choice.
 
     The world is in the midst of an unstoppable wave of innovation and technology that has unprecedented reach on a global scale, causing disruption and disintermediation. For the legal field, there are many new opportunities and challenges and such discoveries require the legal professionals to keep pace with the latest technological developments.
 
     Let me illustrate briefly with two aspects of the new technology, i.e. Artificial Intelligence (AI) and Blockchain or Distributed Ledger Technology.
 
     First, on AI. While there are those who worry that advances in AI may diminish the role of lawyers or even replace them altogether, others see AI as a tool that allows lawyers to focus on higher value work that is more complex and more intellectually stimulating. Indeed, while McKinsey estimates that 22 per cent of a lawyer’s job and 35 per cent of a law clerk’s job can be automated, the picture is not all that bleak for those who can adapt and use AI as a helpful tool. To my mind, in future there might well be more cross-over between law nerds and tech geeks.
 
     In litigation, for now, it would be difficult to imagine a robot lawyer replacing a barrister at court. But who knows maybe in future the junior counsel seated next to a barrister at courts could be a robot that did all the basic research and can do speedy retrieval of information, analysis and argumentation as and when required. Actually, AI can be a truly helpful tool that would help barristers or trial lawyers prepare for cases. From now on, I am going to cite some examples of how AI has been applied in your field. I would however refrain from citing the names of firms or products in order to maintain neutrality here. In fact, some these firms are seated among the audience and speakers too.
 
     So, my first example is about a startup that has designed a software riding on AI to apply natural language processing to millions of court decisions to find trends that would be helpful for the trial case in question. For instance, the software can determine which judges tend to favour plaintiffs, summarise the legal strategies of opposing lawyers, and determine the arguments most likely to convince specific judges.
 
     Some of you might have seen a recent TV series from the United States, currently showing in Hong Kong. It is about a legal consultant using de facto AI in choosing jurors, forming a panel of shadow jurors, and choosing witnesses that would help turn the stance of the jurors in the court by checking the reaction of the shadow jurors. You might well think that this TV series is really over-dramatising things. Actually, I agree with you on that one but who knows what future might hold? My guess is that in future the legal consultant does not need to take pains to find shadow jurors that resemble the real jurors in terms of education and professional background, political or moral inclination, like or dislike etc. This is because AI can rely on big data to find all one can possibly find about the nature or habits of the real jurors, and AI can simulate a panel of jurors to predict their inclination and reaction in the course of trial.
 
     And AI is also assisting judges, and not just lawyers, in certain court systems. In the United States, there are instances of AI assisting judges in deciding whether to detain or release a defendant before trial. A company has developed three different risk assessment algorithms to assess the risks that a released defendant will fail to appear for trial, commit a crime while on release, or commit a violent crime while on release. This methodology is currently in use in about 40 cities, counties and states across the United States.
 
     In April this year, the designer of these algorithms announced that it would seek to develop a deeper understanding of the effectiveness and impact of risk assessment. Over the next five years, a group of national pretrial researchers will work with 10 selected, diverse jurisdictions to understand the impact on a jurisdiction after it is fully implemented. They will also broaden the study of the accuracy of the prediction, develop and test new potential algorithms, establish offence-specific risk assessment models, particularly for drunk driving, domestic violence and sex crimes, and deepen the field’s understanding about the impact pretrial detention has on defendants’ lives. This would appear to be a step forward in improving the process of utilising AI in the court system.
 
     In corporate law, a number of successful applications in AI suggest that technology can relieve transaction lawyers of hours and hours of data intensive, time consuming and repetitive work.
 
     One example is an AI tool developed by a law firm. This solution was developed in response to the need to classify different entities into ones that fall within the definition of a “financial institution” under the new bank ringfencing reforms, and ones that fall outside the definitions of the relevant legislation. The tool can sift through 14 UK and European regulatory registers to determine whether client names fall under the definition of a “financial institution”, quickly processing thousands of names in a fraction of the time a junior lawyer would need to spend on the same task.
 
     Another leading law firm has partnered with a Big Four accounting firm to create a tool that codifies the law in various jurisdictions and automates drafting of certain documents to help banks cope with post financial crisis regulations for the over-the-counter (OTC) derivatives market. With uncleared OTC derivatives being subject to margin rules under the European Market Infrastructure Regulation (EMIR), all counterparties to derivatives contracts which are not cleared through an authorised clearing system will have to provide additional margin for their net exposures. This tool handles the drafting of tailored documents based on an automated legal analysis, reducing the time for each document from three hours to just three minutes.
 
     Yet another international law firm developed its own AI platform to read and analyse clauses in loan agreements. The system emulates the decision-making process of a human being, extracting, reviewing and analysing key contract risks, and connecting lawyers to relevant templates, documents and precedents at the right moment.
 
     In addition to law firms, a large tech company has also moved into Lawtech by developing a robot lawyer that performs legal research. The application allows one to ask questions in plain English, as one would to a colleague. The robot then reads through the entire body of law and provides specific, analytical answers that include topical readings from legislation, case law and secondary sources. All of the above examples reflect the potential of AI to be a helpful tool for corporate lawyers.
 
     In fact, some have predicted that robots and algorithms could help make legal aid more accessible and widespread, especially to the less privileged. Some proponents argue that cases can get navigated through an AI computer system first, and legal aid lawyers would only get involved at the very late stage when it was really necessary.
 
     So it seems that AI applications can generally help to process and analyse data, structured or unstructured, in a much faster and efficient manner, and probably be more accurate and comprehensive than an average human being. Let me now cite some examples how AI can help end consumers understand legal issues and defend themselves. There is a system that was originally designed to contest parking fines in London and New York. It has a chat-like interface to guide users through a series of simple automated questions to gauge whether a parking appeal is possible.
 
     After asking questions such as “Were the signs clearly marked?” and “Were you parked illegally because of a medical emergency?”, the system generates a letter that can be filed with the appropriate agency. The system also helps people demand compensation from airlines for delayed flights and file paperwork for government housing assistance. All these sound very normal and probably familiar in a litigious society.
 
     Another potential area for Lawtech applications that target the end consumer is the provision of legal advice on divorce. Divorce disputes typically require navigating lengthy and confusing cases that have been interpreted in thousands of previous decisions. Some believe that robot lawyers could analyse possible exceptions, loopholes and historical cases to determine the best path forward. Already, a website is providing such services. After getting clients to fill in a form and provide information, it uses algorithms to try to predict how the divorce will progress and provides services to their clients based on that prediction.
 
     So far, it sounds like AI is really a fantastic, impartial tool that can cut down the mundane work and improve the quality of life for lawyers and barristers. But there are problems with AI applications too. One concern is that the use of robots and algorithms may result in discrimination and bias. Each predictive algorithm is inevitably based on a series of subjective decisions on the part of system designer on what data to use, include or exclude, and how to apply weighting to the data on the degree of their importance. In addition, a programmer’s personal history, incentives and motivations would potentially affect the design of the algorithm. The transparency of the process of algorithmic design and assessment of its effectiveness after its implementation is thus crucial. This is particularly true for the cases like the one I mentioned earlier, where AI assists judges in deciding whether to detain or release a defendant before trial.
 
     In other words, at least for the present there is apparently a challenge to come up with a truly bias absent or neutral AI technology solution. Incidentally, globally there is now a movement toward exploring the role of ethics in AI. The European Group on Ethics in Science and New Technologies, an advisory group to the President of the European Commision, released a statement on AI, Robotics and Autonomous Systems in March this year, highlighting the need for a collective, wide-ranging and inclusive process of reflection and dialogue on the role of technology in human values. So the ethical development of AI is a huge subject that requires the debate and participation of professionals from all industries and all walks of life, including those in the legal field.
 
     Let me now turn to my second topic on blockchain, a type of distributed ledger technology. Blockchain is a digital ledger of transactions, contracts and agreements that is distributed across hundreds or even thousands of computers around the world. The benefits of blockchain technology include mainly security and transparency. Some say speed is also a blockchain advantage but that really depends on the design of the blockchain. In many public chain applications, where a large number of participating nodes need to validate a transaction entry before it can be added to the blockchain, processing speed can hardly be claimed to be an advantage as it could take several minutes to validate the transaction in question.
 
     Security is generally accepted as an advantage because the information contained within the distributed ledger is tamper proof. If the ledger is shared across 1 000 nodes and a hacker wanted to change information in one of the blocks, the hacker would have to hack all 1 000 nodes simultaneously. And transparency because all nodes in the chain can see changes to a block, and decide whether it is an authorised change. But this authentication takes time to process and this is often cited as the scalability or speed problem associated with public chains like that for Bitcoin which I am sure you have heard of.
 
     There are a number of potential applications of blockchain technology in law. One area is land registration, where blockchain promises to be an effective and secure method to store the data essential for property rights, such as land ownership and the details of when it changed hands. Indeed, there is potential for a distributed ledger to replace a paper-based land registration system.
 
     A number of jurisdictions around the world are already exploring the use of blockchain technology to modernise, add security to and speed up the land registration process. In the United Kingdom, their Land Registry recently announced its intention to embrace new technology, including blockchain technology, in what could be the most “far reaching transformation in their 150 year history.”
 
     In Sweden, the land registry authority has been testing a way to eliminate paperwork, reduce fraud and speed up transactions through recording property transactions on a blockchain. It is estimated that this could potentially save Swedish taxpayers more than €100m a year.
 
     In the Middle East, Dubai is developing a system that would record all local real estate contracts on a blockchain as part of an overall plan to secure all government documents on a blockchain by 2020. And in India, legal experts have also spoken about the potential benefits of a public distributed ledger to digitise land records and set the precedent for future transactions, ensuring a legitimate, government-approved record of transactions.
 
     Apart from land registration, another potential application of blockchain in the legal field is in alternative dispute resolution, including arbitration. While arbitration is often used for resolving disputes in international business, the process is lengthy and costly. A blockchain platform could provide a secure and transparent platform for capturing negotiations, agreements, and the terms of a resolution, where every fact and detail would be available and traceable to relevant parties.
 
     In March this year, a US legal technology startup unveiled a blockchain application specifically for the international dispute resolution community. The application intends to utilise blockchain technology to eliminate the need for couriers, hard copies and mailing in the arbitration process. This blockchain portal is held by an arbitral institution and claimants can file requests for arbitration through the portal. Documents can be drafted, finalised and submitted directly, and all of the involved parties will be able to access the data associated with the proceedings. Claimants will also be able to view their final award on the portal.
 
     Yet another way blockchain technology could potentially transform legal processes is in relation to notaries public. Currently, notaries public confirm and verify signatures on legal documents, such as deeds and contracts. This is an important process in the court system. For example, in the United States, courts require a specific set of rules to be followed when submitting and verifying evidence such as emails, documents and records in legal proceedings.
 
     This is where blockchain comes in, since the technology can record and authenticate evidence securely by preserving them as part of a digital ledger. In the United States, Vermont is the first state to legislate the use of blockchain technology to verify records and information. Already, a company has developed several products that apply blockchain technology to legal documents, thereby eliminating the need for the rubber stamp of a notary public.
 
     While blockchain technology is promising, it is not without its perils. One general concern is the lack of identity verification through “Know Your Client” or KYC processes. In conventional transactions, intermediaries such as banks conduct identity verification and are responsible for building trust between two parties. Some blockchain applications skip this process altogether through anonymous transactions, although some applications do claim that they enforce rigorous KYC, as I had heard from some cryptocurrency exchange operators.
 
     Another challenge is the cross jurisdictional nature of blockchain because the nodes on a blockchain can be located anywhere in the world. In a conventional banking transaction, if the bank is at fault for a transaction, the bank can be sued and the applicable jurisdiction will most likely be contractually governed. However, in a decentralised environment, it may be difficult to identify the appropriate set of applicable governing rules and laws.
 
     Yet another challenge is the legal status of Decentralised Autonomous Organisations (DAO), which are essentially digital entities that record activity on the blockchain and require minimal to zero human input into their operations. Questions would naturally arise on the legal power of such organisations. For example, would they be regarded as a corporation or a legal entity? Should they have the power to enter into legal contracts, to sue and to be sued? And who would be responsible if laws are broken? And the triggering of smart contracts in the blocks of Ethereum also raises the question of responsibility for the actions by such smart contracts and who should be responsible for picking up the pieces in such a distributed environment when a smart contract malfunctions or the block is hacked. The above are examples of concerns that need to be addressed by governments and regulators in consultation with industry players and the public at large. For those of you familiar with the cryptocurrency Ether that is associated with the Ethereum platform, Ethereum is based on this DAO construct. So DAO problems as mentioned above are real issues to be addressed, when there are more and more of users of Ethereum or similar platforms.
 
     Ladies and gentlemen, in conclusion, the intersection of technology and law is a fascinating topic that has economic, social, legal as well as ethical implications. I hope I have illustrated well for you how AI and blockchain present a maze of opportunities as well as challenges for the legal field.
 
     One challenge I should mention is cyber security, which is going to gain headline attention and probably provides fertile ground for court cases involving such perpetration of cybercrime. Another challenge is data privacy, which is of course not a new subject but it is going to gain more prominence in the new tech world, especially when so many social media platforms and apps of all sorts collect so much personal data, with or without the data subjects realising it. And some news reports in the last few days mentioned that some data sharing had been done deliberately, even though the data subjects had already opted to refuse third-party sharing of data. Data would be a central element of the new economy and the profit driver of many new business models. And I would suggest that data could well be the source of many legal disputes in future.
 
     Well, I hope the above would help to whet your appetite to dig deeper into this subject of technology and law. Your conference has a rich agenda to be covered by many eminent practitioners in the field. And I encourage you all, as lawyers, to embrace technology. This is not to avoid losing your practice to AI, robotics or other areas of new technology but to take on the challenges posed and assist the legal community to find possibly new or refined legal frameworks to tackle such new legal issues and problems. And perhaps some of you might become so interested that you wish to cross over to the tech field and become truly tech savvy legal professionals too. Let me wish you all a fruitful conference. Thank you. read more

     Following is the speech by the Secretary for Financial Services and the Treasury, Mr James Lau, at 2018 Annual Conference of In-House Lawyers hosted by Law Society of Hong Kong today (June 6):
 
Thomas (President of Law Society of Hong Kong, Mr Thomas So), Maggie (Chairlady of In-House Lawyers Committee, Ms Maggie Tsui), distinguished guests, ladies and gentlemen,
 
     Good morning. I am very excited to join you all at today’s conference. Technology is very close to my heart as I studied computer science at the University of Waterloo many years ago. With the revolutionary advances in technology especially in the last few years, we have seen Industrial Revolution 4.0 and your conference theme of Technology and Law is a very apt choice.
 
     The world is in the midst of an unstoppable wave of innovation and technology that has unprecedented reach on a global scale, causing disruption and disintermediation. For the legal field, there are many new opportunities and challenges and such discoveries require the legal professionals to keep pace with the latest technological developments.
 
     Let me illustrate briefly with two aspects of the new technology, i.e. Artificial Intelligence (AI) and Blockchain or Distributed Ledger Technology.
 
     First, on AI. While there are those who worry that advances in AI may diminish the role of lawyers or even replace them altogether, others see AI as a tool that allows lawyers to focus on higher value work that is more complex and more intellectually stimulating. Indeed, while McKinsey estimates that 22 per cent of a lawyer’s job and 35 per cent of a law clerk’s job can be automated, the picture is not all that bleak for those who can adapt and use AI as a helpful tool. To my mind, in future there might well be more cross-over between law nerds and tech geeks.
 
     In litigation, for now, it would be difficult to imagine a robot lawyer replacing a barrister at court. But who knows maybe in future the junior counsel seated next to a barrister at courts could be a robot that did all the basic research and can do speedy retrieval of information, analysis and argumentation as and when required. Actually, AI can be a truly helpful tool that would help barristers or trial lawyers prepare for cases. From now on, I am going to cite some examples of how AI has been applied in your field. I would however refrain from citing the names of firms or products in order to maintain neutrality here. In fact, some these firms are seated among the audience and speakers too.
 
     So, my first example is about a startup that has designed a software riding on AI to apply natural language processing to millions of court decisions to find trends that would be helpful for the trial case in question. For instance, the software can determine which judges tend to favour plaintiffs, summarise the legal strategies of opposing lawyers, and determine the arguments most likely to convince specific judges.
 
     Some of you might have seen a recent TV series from the United States, currently showing in Hong Kong. It is about a legal consultant using de facto AI in choosing jurors, forming a panel of shadow jurors, and choosing witnesses that would help turn the stance of the jurors in the court by checking the reaction of the shadow jurors. You might well think that this TV series is really over-dramatising things. Actually, I agree with you on that one but who knows what future might hold? My guess is that in future the legal consultant does not need to take pains to find shadow jurors that resemble the real jurors in terms of education and professional background, political or moral inclination, like or dislike etc. This is because AI can rely on big data to find all one can possibly find about the nature or habits of the real jurors, and AI can simulate a panel of jurors to predict their inclination and reaction in the course of trial.
 
     And AI is also assisting judges, and not just lawyers, in certain court systems. In the United States, there are instances of AI assisting judges in deciding whether to detain or release a defendant before trial. A company has developed three different risk assessment algorithms to assess the risks that a released defendant will fail to appear for trial, commit a crime while on release, or commit a violent crime while on release. This methodology is currently in use in about 40 cities, counties and states across the United States.
 
     In April this year, the designer of these algorithms announced that it would seek to develop a deeper understanding of the effectiveness and impact of risk assessment. Over the next five years, a group of national pretrial researchers will work with 10 selected, diverse jurisdictions to understand the impact on a jurisdiction after it is fully implemented. They will also broaden the study of the accuracy of the prediction, develop and test new potential algorithms, establish offence-specific risk assessment models, particularly for drunk driving, domestic violence and sex crimes, and deepen the field’s understanding about the impact pretrial detention has on defendants’ lives. This would appear to be a step forward in improving the process of utilising AI in the court system.
 
     In corporate law, a number of successful applications in AI suggest that technology can relieve transaction lawyers of hours and hours of data intensive, time consuming and repetitive work.
 
     One example is an AI tool developed by a law firm. This solution was developed in response to the need to classify different entities into ones that fall within the definition of a “financial institution” under the new bank ringfencing reforms, and ones that fall outside the definitions of the relevant legislation. The tool can sift through 14 UK and European regulatory registers to determine whether client names fall under the definition of a “financial institution”, quickly processing thousands of names in a fraction of the time a junior lawyer would need to spend on the same task.
 
     Another leading law firm has partnered with a Big Four accounting firm to create a tool that codifies the law in various jurisdictions and automates drafting of certain documents to help banks cope with post financial crisis regulations for the over-the-counter (OTC) derivatives market. With uncleared OTC derivatives being subject to margin rules under the European Market Infrastructure Regulation (EMIR), all counterparties to derivatives contracts which are not cleared through an authorised clearing system will have to provide additional margin for their net exposures. This tool handles the drafting of tailored documents based on an automated legal analysis, reducing the time for each document from three hours to just three minutes.
 
     Yet another international law firm developed its own AI platform to read and analyse clauses in loan agreements. The system emulates the decision-making process of a human being, extracting, reviewing and analysing key contract risks, and connecting lawyers to relevant templates, documents and precedents at the right moment.
 
     In addition to law firms, a large tech company has also moved into Lawtech by developing a robot lawyer that performs legal research. The application allows one to ask questions in plain English, as one would to a colleague. The robot then reads through the entire body of law and provides specific, analytical answers that include topical readings from legislation, case law and secondary sources. All of the above examples reflect the potential of AI to be a helpful tool for corporate lawyers.
 
     In fact, some have predicted that robots and algorithms could help make legal aid more accessible and widespread, especially to the less privileged. Some proponents argue that cases can get navigated through an AI computer system first, and legal aid lawyers would only get involved at the very late stage when it was really necessary.
 
     So it seems that AI applications can generally help to process and analyse data, structured or unstructured, in a much faster and efficient manner, and probably be more accurate and comprehensive than an average human being. Let me now cite some examples how AI can help end consumers understand legal issues and defend themselves. There is a system that was originally designed to contest parking fines in London and New York. It has a chat-like interface to guide users through a series of simple automated questions to gauge whether a parking appeal is possible.
 
     After asking questions such as “Were the signs clearly marked?” and “Were you parked illegally because of a medical emergency?”, the system generates a letter that can be filed with the appropriate agency. The system also helps people demand compensation from airlines for delayed flights and file paperwork for government housing assistance. All these sound very normal and probably familiar in a litigious society.
 
     Another potential area for Lawtech applications that target the end consumer is the provision of legal advice on divorce. Divorce disputes typically require navigating lengthy and confusing cases that have been interpreted in thousands of previous decisions. Some believe that robot lawyers could analyse possible exceptions, loopholes and historical cases to determine the best path forward. Already, a website is providing such services. After getting clients to fill in a form and provide information, it uses algorithms to try to predict how the divorce will progress and provides services to their clients based on that prediction.
 
     So far, it sounds like AI is really a fantastic, impartial tool that can cut down the mundane work and improve the quality of life for lawyers and barristers. But there are problems with AI applications too. One concern is that the use of robots and algorithms may result in discrimination and bias. Each predictive algorithm is inevitably based on a series of subjective decisions on the part of system designer on what data to use, include or exclude, and how to apply weighting to the data on the degree of their importance. In addition, a programmer’s personal history, incentives and motivations would potentially affect the design of the algorithm. The transparency of the process of algorithmic design and assessment of its effectiveness after its implementation is thus crucial. This is particularly true for the cases like the one I mentioned earlier, where AI assists judges in deciding whether to detain or release a defendant before trial.
 
     In other words, at least for the present there is apparently a challenge to come up with a truly bias absent or neutral AI technology solution. Incidentally, globally there is now a movement toward exploring the role of ethics in AI. The European Group on Ethics in Science and New Technologies, an advisory group to the President of the European Commision, released a statement on AI, Robotics and Autonomous Systems in March this year, highlighting the need for a collective, wide-ranging and inclusive process of reflection and dialogue on the role of technology in human values. So the ethical development of AI is a huge subject that requires the debate and participation of professionals from all industries and all walks of life, including those in the legal field.
 
     Let me now turn to my second topic on blockchain, a type of distributed ledger technology. Blockchain is a digital ledger of transactions, contracts and agreements that is distributed across hundreds or even thousands of computers around the world. The benefits of blockchain technology include mainly security and transparency. Some say speed is also a blockchain advantage but that really depends on the design of the blockchain. In many public chain applications, where a large number of participating nodes need to validate a transaction entry before it can be added to the blockchain, processing speed can hardly be claimed to be an advantage as it could take several minutes to validate the transaction in question.
 
     Security is generally accepted as an advantage because the information contained within the distributed ledger is tamper proof. If the ledger is shared across 1 000 nodes and a hacker wanted to change information in one of the blocks, the hacker would have to hack all 1 000 nodes simultaneously. And transparency because all nodes in the chain can see changes to a block, and decide whether it is an authorised change. But this authentication takes time to process and this is often cited as the scalability or speed problem associated with public chains like that for Bitcoin which I am sure you have heard of.
 
     There are a number of potential applications of blockchain technology in law. One area is land registration, where blockchain promises to be an effective and secure method to store the data essential for property rights, such as land ownership and the details of when it changed hands. Indeed, there is potential for a distributed ledger to replace a paper-based land registration system.
 
     A number of jurisdictions around the world are already exploring the use of blockchain technology to modernise, add security to and speed up the land registration process. In the United Kingdom, their Land Registry recently announced its intention to embrace new technology, including blockchain technology, in what could be the most “far reaching transformation in their 150 year history.”
 
     In Sweden, the land registry authority has been testing a way to eliminate paperwork, reduce fraud and speed up transactions through recording property transactions on a blockchain. It is estimated that this could potentially save Swedish taxpayers more than €100m a year.
 
     In the Middle East, Dubai is developing a system that would record all local real estate contracts on a blockchain as part of an overall plan to secure all government documents on a blockchain by 2020. And in India, legal experts have also spoken about the potential benefits of a public distributed ledger to digitise land records and set the precedent for future transactions, ensuring a legitimate, government-approved record of transactions.
 
     Apart from land registration, another potential application of blockchain in the legal field is in alternative dispute resolution, including arbitration. While arbitration is often used for resolving disputes in international business, the process is lengthy and costly. A blockchain platform could provide a secure and transparent platform for capturing negotiations, agreements, and the terms of a resolution, where every fact and detail would be available and traceable to relevant parties.
 
     In March this year, a US legal technology startup unveiled a blockchain application specifically for the international dispute resolution community. The application intends to utilise blockchain technology to eliminate the need for couriers, hard copies and mailing in the arbitration process. This blockchain portal is held by an arbitral institution and claimants can file requests for arbitration through the portal. Documents can be drafted, finalised and submitted directly, and all of the involved parties will be able to access the data associated with the proceedings. Claimants will also be able to view their final award on the portal.
 
     Yet another way blockchain technology could potentially transform legal processes is in relation to notaries public. Currently, notaries public confirm and verify signatures on legal documents, such as deeds and contracts. This is an important process in the court system. For example, in the United States, courts require a specific set of rules to be followed when submitting and verifying evidence such as emails, documents and records in legal proceedings.
 
     This is where blockchain comes in, since the technology can record and authenticate evidence securely by preserving them as part of a digital ledger. In the United States, Vermont is the first state to legislate the use of blockchain technology to verify records and information. Already, a company has developed several products that apply blockchain technology to legal documents, thereby eliminating the need for the rubber stamp of a notary public.
 
     While blockchain technology is promising, it is not without its perils. One general concern is the lack of identity verification through “Know Your Client” or KYC processes. In conventional transactions, intermediaries such as banks conduct identity verification and are responsible for building trust between two parties. Some blockchain applications skip this process altogether through anonymous transactions, although some applications do claim that they enforce rigorous KYC, as I had heard from some cryptocurrency exchange operators.
 
     Another challenge is the cross jurisdictional nature of blockchain because the nodes on a blockchain can be located anywhere in the world. In a conventional banking transaction, if the bank is at fault for a transaction, the bank can be sued and the applicable jurisdiction will most likely be contractually governed. However, in a decentralised environment, it may be difficult to identify the appropriate set of applicable governing rules and laws.
 
     Yet another challenge is the legal status of Decentralised Autonomous Organisations (DAO), which are essentially digital entities that record activity on the blockchain and require minimal to zero human input into their operations. Questions would naturally arise on the legal power of such organisations. For example, would they be regarded as a corporation or a legal entity? Should they have the power to enter into legal contracts, to sue and to be sued? And who would be responsible if laws are broken? And the triggering of smart contracts in the blocks of Ethereum also raises the question of responsibility for the actions by such smart contracts and who should be responsible for picking up the pieces in such a distributed environment when a smart contract malfunctions or the block is hacked. The above are examples of concerns that need to be addressed by governments and regulators in consultation with industry players and the public at large. For those of you familiar with the cryptocurrency Ether that is associated with the Ethereum platform, Ethereum is based on this DAO construct. So DAO problems as mentioned above are real issues to be addressed, when there are more and more of users of Ethereum or similar platforms.
 
     Ladies and gentlemen, in conclusion, the intersection of technology and law is a fascinating topic that has economic, social, legal as well as ethical implications. I hope I have illustrated well for you how AI and blockchain present a maze of opportunities as well as challenges for the legal field.
 
     One challenge I should mention is cyber security, which is going to gain headline attention and probably provides fertile ground for court cases involving such perpetration of cybercrime. Another challenge is data privacy, which is of course not a new subject but it is going to gain more prominence in the new tech world, especially when so many social media platforms and apps of all sorts collect so much personal data, with or without the data subjects realising it. And some news reports in the last few days mentioned that some data sharing had been done deliberately, even though the data subjects had already opted to refuse third-party sharing of data. Data would be a central element of the new economy and the profit driver of many new business models. And I would suggest that data could well be the source of many legal disputes in future.
 
     Well, I hope the above would help to whet your appetite to dig deeper into this subject of technology and law. Your conference has a rich agenda to be covered by many eminent practitioners in the field. And I encourage you all, as lawyers, to embrace technology. This is not to avoid losing your practice to AI, robotics or other areas of new technology but to take on the challenges posed and assist the legal community to find possibly new or refined legal frameworks to tackle such new legal issues and problems. And perhaps some of you might become so interested that you wish to cross over to the tech field and become truly tech savvy legal professionals too. Let me wish you all a fruitful conference. Thank you. read more