Concept model for a distributed dispute resolution mechanism: a theoretical application on a use case scenario

The advancement of different distributed ledger technology (DLT) networks has raised issues not only in terms of compliance with data protection and privacy of natural persons, but also in terms of the enforceability of smart contract code decentralised applications, in particular in the area of dispute resolution between peers and parties to value transfer transactions.

Through the course of the research project a legal and technical feasibility study is set to be carried out for the design of a concept model, whereby two interoperable DLT networks are integrated, one for smart contract code –based transactions, respectively the other for self-sovereign identity management through incorporation of decentralised identifiers (DIDs). A distributed network of operating computer nodes controlled by a community of legal professionals is additionally plugged in for the provision of a number of services. These include on-ledger validation in order to ensure data integrity and to avoid double spending, off-ledger storage of personally identifiable information (PII), and merit -based settlement of disputes.

Parties to transactions, who would ex ante opt in for such a dispute resolution mechanism, would be bound by the terms and conditions of the legal agreement pointed to by its corresponding smart contract code.

The governance aspect of the network of community of legal professionals would be defined by traditional organisational law, i.e. in the form of a partnership, in combination with an algorithmic protocol for selection of arbiters enabled by a decentralised autonomous organisation (DAO). 

The presentation will demonstrate a theoretical applicability of the proposal model on a use case scenario.

Golnaz Jafari is a PhD researcher at the Institute for Interdisciplinary Legal Studies, Lucernaiuris, at the University of Lucerne, Switzerland. She is also an associate researcher at the Würzburg Centre for Social and Legal Implications of AI, SOCAI, at the University of Würzburg, Germany. She is currently spending a 12-month fellowship at the NRCCL, coordinated by the Swiss National Science Foundation, SNSF.