LawtechUK Progress Report - May 2022

LawtechUK is a government-backed initiative within Tech Nation, established in 2019 with a £2 million grant to support the transformation of the UK legal sector through technology, for the benefit of society and the economy.

Two and a half years on from the inception of LawtechUK, we set out below a summary of what has been achieved so far, across five key areas.

• To fast-track the development of innovative products and services, we established the Lawtech Sandbox, which provides pioneering lawtech companies with access to data and decision-makers needed to grow their offering. This includes a first of its kind forum of 13 cross-sector regulators to navigate regulatory regimes, which has supported more than 75 lawtechs since its inception and produced joint guidance. Lawtech Sandbox pioneers accredit the LawtechUK initiative with accelerating their product development and headcount growth, by as much as six times.

• To demonstrate how technology can be deployed within the legal system to support faster, more affordable and business-friendly access to justice, we developed a proof of concept online dispute resolution platform, tackling the £23bn in SME late payment debt, with a roadmap to resolve over 200,000 cases accounting for £3.4m in debt value over a initial development period. This is now being pursued by industry.

• To consolidate the UK as the international legal standard for new technologies, we developed a series of publications including the Legal Statement on Cryptoassets and Smart Contracts, which addressed legal uncertainty surrounding digital assets and smart contracts, the UKJT’s Digital Dispute Resolution Rules that facilitated rapid and cost-effective dispute resolution in the digital space, and the Smarter Contracts Report, that demonstrates how smarter, technology-enabled ways of contracting and working with structured data add value across commercial, financial and consumer sectors. The Legal Statement has been cited in court judgements around the world and contributed to the Law Commission’s work in updating legislation.

• To improve awareness of lawtech and technical literacy of legal practitioners, we created a free online learning and resource hub and hosted a series of events and publications, such as our Shaping the Future of Law Report. The LawtechUK Hub has had over 40,000 views and 3,500 course completions. Along with Remote Courts Worldwide, our knowledge sharing site to support the global justice community to embrace remote justice during Covid-19 restrictions, these resources and events have reached people in more than 160 countries.

• To encourage the legal sector to embrace the use of and shared access to data to increase innovation, productivity and risk management, we developed the Legal Data Vision and a range of practical resources, backed by industry. This includes demonstrating new compliant methodologies for shared data access between multiple parties towards common justice and business aims.

The LawtechUK programme has been supported by a network of hundreds of cross sector experts and collaborators, including legal professionals and firms, technology startups, policy makers, academics and regulators, to create a sense of shared purpose and urgency around the development and opportunity of lawtech. An independent economic review confirms the economic benefits of accelerating the growth of lawtech, and finds that LawtechUK delivered value for money.

Recent data shows the market opportunity for lawtech is £22bn annually and that with the right support, lawtech can be a significant contributor to the economy, growing 50% year on year to 2026, on a similar trajectory as UK fintech. The success of the programme to date has laid the foundations for further work to support this growth and transformative innovation, beyond the current market focus on digitising existing practices, which remain expensive, slow and inaccessible, and which result in the current £11.4bn in annual unmet legal needs for consumers and small businesses.

Alongside this will be further work to ensure the UK’s leadership position in providing legal certainty and a flexible, ethical framework for those embracing emerging technologies.

Outgoing Director of LawtechUK, Jenifer Swallow comments: “The opportunity for growth and disruption through lawtech is significant. It is important not to lose sight of the task at hand and the shared purpose of all in the legal community - to serve society. Fresh thinking and harnessing the state of the art is critical to delivering on that purpose. We are only in the foothills of what is possible through the work of LawtechUK and ensuring the UK takes a leadership role globally in the future of law.”

Professor Richard Susskind, Technology Adviser to the Lord Chief Justice: “In just two years, LawtechUK has played a central role in establishing the UK as a leading global hub for technology and law. In a series of ambitious yet practical projects, the team has, for example, offered invaluable support to lawtech start-ups; it has shown how online dispute resolution techniques can be used to help and even save small businesses; and, in removing legal uncertainty over digital assets and smart contracts, it has promoted English law as an international legal standard for emerging technologies.”

Sarah Green, Law Commissioner comments: “The LawtechUK initiative is a unique crucible of expertise that has provided ideas, solutions and assurances that simply would not otherwise have existed. In conjunction with legal developments, it has made a highly significant contribution to establishing an invaluable basis of certainty in UK law for those wanting to use and transact with innovative technologies.”

Sir Geoffrey Vos, Master of the Rolls comments: “LawtechUK has been instrumental in removing impediments to the adoption of new technologies underpinned by English and Welsh law. It will continue, in the future, to reinforce the legal foundation for the use of blockchain technologies across legal, financial and industrial sectors. LawtechUK makes the case for the massive value of English law as blockchain and smart contracts continue their exponential growth”.

Tracy Vegro, Executive Director Strategy and Innovation at the Solicitors Regulation Authority comments: “LawtechUK drives leadership in lawtech through collaboration, facilitating the growth of the lawtech sector and building awareness of the benefits of utilising new technology in legal services, for both the profession and consumers. The SRA is proud to have contributed to the initiative.”

Paul Mosson, Executive Director of Member Services and Engagement, Law Society of Scotland comments: "What LawtechUK’s Regulatory Response Unit is uniquely placed to do is take a problem, very fast and very succinctly right to the heart of regulation across the United Kingdom, irrespective of practice area, discipline or jurisdiction. There is no other organisation than LawtechUK that has achieved that. No one else has that convening power across all three U.K. jurisdictions."

Minesh Patel, CEO of Amplified Global comments: “Without the Lawtech Sandbox, we would have found it really difficult to be working, or even engaging, with a telecoms giant and the cross section of stakeholders and regulators that we did. The LawtechUK programme has rapidly accelerated our growth and helped us to get the product to market quicker than we could have ever imagined.”

Helen Dodds, Director of LegalUK, and former Global Head of Legal, Dispute Resolution at Standard Chartered Bank comments: “In 2020 LawtechUK set out on the road to transform the UK legal sector through tech. LawtechUK’s achievements so far and in the future will be a key factor in underpinning a rapid and effective transition to a fully tech enabled legal sector for the UK, ensuring that the nation retains its place as a world leader in this field.”

Tara Waters, Partner, Head of Ashurst Advance Digital: “As the legal industry continues to mature its digital and data capabilities, the need for intra-industry collaboration has become ever more apparent. Participating in the LawtechUK programme helped us to frame our own data challenges within the context of the wider industry, as well as to gain hands-on experience with the technologies available to accelerate our ability to extract greater value from our data.”

Comments from the independent impact evaluation:

Lawtech pioneer comments: “Being part of the Sandbox has hugely accelerated progress. It would have taken us a lot longer to get to where we are now. The valuation of our company has increased threefold following the Sandbox.”

Lawtech expert comments: “A great demonstration of a new approach to solving problems in the justice system using technology.”

Regulator comments: “LawtechUK has solidified the standing of the UK in terms of legal services and legal technology… it has shown the UK to be forward thinking, which will attract inward business and talent.”

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• LawtechUK Independent Impact Assessment 2022
• Frontier Economics 2021 report on the economic impact of lawtech
• LawtechUK Shaping the Future of Law Report 2021