While the reliability of decentralized networks has long been a source of distrust, Blockchain technology has provided a sufficiently credible technological response to not only support numerous industrial use cases but also interest legal professionals.
At Archipels - a platform operated on a trusted permissioned blockchain - we answer many questions from our partners and customers on how blockchain technology, armed with APIs that are as flexible as they are robust, can be used to certify and verify data and documents of evidential value.
If my technophile hat often leads me to answer these commercial questions, it is more the new legal issues raised by decentralized registries that have been my specialty for several years now.
I know how easy it is for a lawyer who is not initiated to Blockchain technology to get lost in it and this is why I decided to take the pen to remove the doubts that may exist on the evidential value of this technology. I invite you to take a look at these concrete elements to satisfy your curiosity or to feed your reflection on the use of Blockchain in your business needs.
Blockchain is already recognized as an evidentiary mechanism
Let's start with an obvious point that I think is too often overlooked: Blockchain technology represents a universal evidentiary mechanism. More specifically, the technical means of generating and obtaining evidence are uniform throughout the world, thus transcending national borders and regulations. The trust lies in the technology.
From a regulatory point of view, some countries have decided to go beyond this technical reality and go even further in the recognition of this technology.
For example, China has legally recognized blockchain as an evidentiary mechanism. In a decision by the Hangzhou Court on June 28, 2018, the electronic data contained in the blockchain was recognized as evidence in a court dispute. This decision was based on the credibility of the technical means used to obtain the evidence, as well as the integrity of that evidence. A decision that called for others like in Italy or in the State of Vermont in the United States.
But let's go back to Europe for a moment, since that's the area we're interested in: on the Old Continent, the proposed regulation for the establishment of a European digital identity (or EUid regulation - which you can find, by the way here) includes a section creating a new trust service related to the operation of an electronic registry (section 11 of the proposed regulation mentioned above). The definition of electronic registry is broad enough to include decentralized applications, such as the Blockchain or other decentralized registry.
In particular, the proposed regulation provides that data recorded in a qualified electronic registry shall be presumed to be unambiguous, authentic and immutable. If this regulation is adopted, it will confirm the evidential value of certain blockchains in European law. Permitted blockchains - such as Archipels - will be able to benefit from these presumptions.
For the time being and in France, the legal recognition of blockchain is still sectorial. However, more and more areas of law include blockchain, thus becoming part of a trend of official recognition of the evidential value of this technology:
- The French Monetary and Financial Code legally recognizes the existence of blockchain technology with Article L.223-12, which states that it is a " shared electronic recording device allowing the authentication of transactions ". Moreover, Article L.223-13 of the same code states that the registration in a blockchain of a transfer of minibonds constitutes a transfer of ownership and takes the place of a " written contract for the application of Articles 1321 and 1322 of the Civil Code" .
- The PACTE law introduces "Initial Coins Offerings" ("ICOs") and describes them as fundraising operations carried out on Blockchain resulting in the issuance of tokens.
- More recently, an article in the proposed law to modernize the fight against counterfeiting proposes the use of the Blockchain to improve the fight against counterfeiting, particularly in terms of traceability and assistance to the work of customs.
The Archipels blockchain: a permissioned blockchain ensuring the legal security of actors
In Blockchain, evidence is generated by signature and authentication processes. electronic seal, d'electronic timestamp and hash functions. Signed, timestamped or hashed data are useful evidence in litigation or to prove compliance to a regulator.
Today: the legal value of the digital footprint Archipels
Today, the evidence generated by the Archipels blockchain can be legally produced in court. The Ministry of Justice has thus affirmed that the provisions of the Civil Code on evidentiary matters were applicable to blockchain and therefore that evidence generated by this technology could, as of today, be legally produced in court, thus giving blockchain technology the legitimacy and credibility it deserves (Ministerial response, n 22103: JOAN 30 Jul 2019, p10774).
Let us take this opportunity to remind you that in French law there is a principle of freedom of proof in commercial matters (article L. 110-3 of the Commercial Code) and in criminal matters (article 427 of the Code of Criminal Procedure) and that legal facts and private deeds - the amount of which is less than 1,500 euros - can be proven by any means.
The evidence generated by Archipels, for example in the context of a procedure to study the conformity of a client's address, can thus be used as proof. A judge or a regulator will not be able to dismiss this evidence just because it is digital.
Tomorrow: the legal value of electronic certificates Archipels
As previously described, regulatory developments are underway that will reinforce the evidentiary value of blockchain technology as well as associated services such as the issuance of electronic certificates of attributes.
In European law, the proposed EUid regulation establishes a new trust service for the provision of electronic attestations of attributes. An attribute is defined as a characteristic or quality of a natural or legal person or entity, in electronic form. It is foreseen that the qualified electronic attestation of attributes will produce the same legal effects as the attestations legally delivered on paper.
Thus, by 2023, the provision of a qualified electronic certificate by Archipels will have the same legal value as a paper certificate in a customer knowledge file.
In French law, the French Federation of Blockchain Professionals (FFPB) is currently working on a proposal to modify the Code des Postes et des Communications Électroniques to generally recognize the evidentiary value of the Blockchain.
The regulatory changes underway at the European and French levels will further strengthen the legal security offered by the Archipels blockchain.
Ensuring the transition from today to tomorrow: an agreement on evidence systematically concluded in all Archipels contracts
Since blockchain evidence can be legally produced in court, the judge will have to assess its probative value, without being able to dismiss it on the sole grounds that it is digital. However, the conclusion of an evidence agreement will facilitate the work of the judge but also ensure the legal security of the actors before the adoption of the EUid regulation.
As a reminder, the proof agreement is a tool according to which the parties aim to replace a control and/or a heavy formalism, by a process recognized as opposable to each, and according to which they grant it all their confidence. It is the law of March 13, 2000 that integrated the principle of contractual freedom in evidentiary matters into the Civil Code, the ordinance of February 10, 2016 then retained a principled validity of the evidence agreement by a new article 1356 of the civil code consecrating a constant jurisprudence on the possibility of the parties to conclude contracts on evidence.
With a view to always reinforcing legal security, the use of the Archipels blockchain makes it possible to offer sufficiently defined governance to conclude an agreement of proof between its users.
Only the use of a permissioned blockchain such as Archipels makes it possible to set up this contractual tool. At the level of the Archipels blockchain, it is a matter of establishing an agreement on the admissibility of blockchain evidence processes and their probative force. This agreement guarantees that the parties undertake not to contest the admissibility, admissibility, opposability or probative force of the elements generated and registered in the Archipels blockchain.
For this reason, all Archipelago contracts now include a convention on evidence.
To summarize, Blockchain is a universal evidentiary mechanism and will soon be recognized in law in all its evidentiary value, thus making the verification of data in customer journeys compliant with the legal provisions that frame the activity of companies.
Don't hesitate to ask me directly on LinkedIn to talk about blockchain! To learn more about Archipels' certification solutions, based on Blockchain technology, we can also be reached via our contact page.
This article was originally published by Paola Heudebert, Legal Director at Archipels, on LinkedIn. You can find the article on this link.