Digital Legal Services: Technology for Effective Drafting and Execution

Title of presentation | 10 April 2015 | Page1

Providing Legal Services in a Digital Era? Technology for Effective Drafting and Execution Processes Peter Moran Principal Peer Legal

Overview My journey to a digital legal practice Legal issues regarding electronic contracting: Paperless contracts better than paper so get on board Electronic signing know (and prove) who is signing Clickwrap, browser wrap and sign-in wrap visible and available Deeds still a problem Williams v Crocker identification the key Texting/digital dictation a sleeper Privacy and Notifiable Data Breach Scheme still time to get on top of it Smart contracts watch this space Contract automation issues watch this space o o o o o o o o o Electronic Contract Service Offerings Contract Process Tools Providing Legal Services in a Digital Era? | 20 March 2018 Page 3

A digital legal practice - my journey 1. 2003 2009. Everything on hard copy file, most important emails also sent via snail mail. All contracts signed in hard copy. Bills only in hard copy. Court documents all hard copy only. 2009 2011. Emails filed electronically, everything else still hard copy. Contracts exchanged via email scan. Bills emailed and sent. Important emails sent via snail mail. Some basic court documents filed with court electronically but kept in hard copy on file. 2011 2017. Emails filed only electronically. Bills only sent via email unless client requests otherwise. Non-original hard copy documents scanned to file and shredded. Only open hard copy file if necessary (1 in 10). Some contracts and documents being executed electronically (Docusign). 2. 3. Providing Legal Services in a Digital Era? | 20 March 2018 Page 4

A digital legal practice - my journey Now. 1. 2. Everything in the cloud. The only paper in firm is that being sent to the firm or paper documents which we produce because of a third party requirement (or important deeds). Execute everything via Docusign where possible. No permanent hard copy files. Looking to roll-out contract process software. Court documents electronic wherever possible (affidavits the main problem). Conveyancing Aaarrgghh. 3. 4. 5. 6. 7. Providing Legal Services in a Digital Era? | 20 March 2018 Page 5

Legal issues regarding electronic contracting Paperless contracts Does the paperless contract provide clear evidence of the parties intention to be bound by its terms? Has the offeror stipulated a method of communicating acceptance that precludes doing so electronically? Eliason v Henshaw 4 Wheaton 225 (1819) (send answer by same wagon not mail). Consider adding a boilerplate provision to contracts which states that, in the event that the parties sign and exchange contracts electronically, the parties consent to the contracts being produced, signed and retained solely in an electronic form, provided that production, signing and retention otherwise complies with the relevant requirements of the Electronic Transactions Acts. This ensures the contract satisfies ss 9(1)(d), 9(2)(d), 10(1)(d), 11(1)(e), 11(2)(e) of the ETA Cth and ss 8(2)(b), 9(1)(c), 10(1)(c), 10(2)(c) of the ETA Vic. If not, ensure parties agree explicitly to method of execution and exchange. Providing Legal Services in a Digital Era? | 20 March 2018 Page 6

Legal issues regarding electronic contracting Electronic signing A signature, as a legal concept, bears no relationship to the popular conception of a name, on paper, in the signatory s own handwriting. A signature is not a thing but a process. If that process produces sufficient evidence that a person has adopted a document as his own, and that document before the court is the same document to which the process was applied, then the document has been signed. Prof Reed C, What is a Signature , 2000(3) The Journal of Information, Law and Technology (JILT). Cf Firstpost Homes Ltd v Johnson [1995] 1 WLR 1567 - the term signature must be given its ordinary linguistic meaning such that the parties must write their names with their own hands upon the document. Providing Legal Services in a Digital Era? | 20 March 2018 Page 7

Legal issues regarding electronic contracting Electronic signing Electronic Signatures - definition in Australia An electronic communication satisfies an obligation to provide a signature if: 1. a method is used to both identify the signee and indicate their intention; 2. the method is as reliable as is appropriate; and 3. the counterparty consents to the method used. Section 10 of Electronic Transactions Act 1999 (Cth) and section 9 of the Electronic Transactions (Victoria) Act 2000 (Vic) This largely follows the approach suggested by the UN in the UNCITRAL Model Law. See also, for US definitions of electronic signatures, section 206 of the Electronic Signatures in Global and National Commerce Act; section 1710 of the Government Paperwork Elimination Act and section 2 of the Uniform Electronic Transactions Act. Providing Legal Services in a Digital Era? | 20 March 2018 Page 8

Legal issues regarding electronic contracting Electronic signing J Pereira Fernandes SA v Mehta [2006] 2 All ER 891 a person typing his or her name into an email, including via typing an email address, into an email could be a sufficient signature for the purpose of satisfying the Statute of Frauds. See similar decision in Austral-Asia Freight Pty Ltd v Turner [2013] FCCA 298. Russells (A Firm) v McCardel [2014] VSC 287 The printed name Sam at the end of an email satisfies 2 (ie 9(1)(b)(i)) but not 1(ie 9(1)(a)) but a very context driven decision. Legal Services Board v Forster [2010] VSC 192 Emerton J held that the typed signature was intended to stand as the person s signature. He referred to common law authorities, such as Morton v Copeland, that a signature may be any mark which identifies it as the act of the party. Getup Ltd v Electoral Commissioner (2010) 189 FCR 165 The signing of an electronic document with a conventional signature but using a digital pen on a tablet is a method that satisfies a legislative requirement to provide a signed form. Providing Legal Services in a Digital Era? | 20 March 2018 Page 9

Legal issues regarding electronic contracting clickwrap and browserwrap and sign-in wrap Click affirmatively clicks to agree. Browse agrees through use/browsing. Sign-in agrees through registering/signing on Where a document is intended by the issuer to contain terms of the contract such as an exemption clause of other special condition, the issuer cannot rely on those terms unless, at the time of the contract, it did all that was reasonably necessary to bring the terms to the other party s attention Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197 Terms must be visible and available before the contract is entered into. Must be easily available. Harsher terms require more notice. Providing Legal Services in a Digital Era? | 20 March 2018 Page 10

Legal issues regarding electronic contracting clickwrap and browserwrap and sign-in wrap NAB V Dionys [2016] NSWCA 242 Booklet terms of conditions handed over to customer after account had been opened. Too late to incorporate new terms. Exclusion clause relied on was too harsh for there to be sufficient notice. Providing Legal Services in a Digital Era? | 20 March 2018 Page 11

Legal issues regarding electronic contracting clickwrap and browserwrap and sign-in wrap Gonzalez v Agoda Company [2017] NSWSC 1133 Ms Gonzalez booked hotel accommodation using Agoda website. Issue as to correct jurisdiction and whether exclusive foreign jurisdiction clause applied. Click on book button. Go to booking details page. Enter personal information then go to payment page which had link to terms and conditions. When clicking on Book Now, words I agree with the booking conditions and general terms by booking this room appeared above button. Exclusive jurisdiction clause was incorporated by signature and by reference. Providing Legal Services in a Digital Era? | 20 March 2018 Page 12

Legal issues regarding electronic contracting Deeds until there is legislative change, it would seem that an original version of a deed must be a signed and attested paper document. Seddon on Deeds [2.28] at page 98. Cf Section 10 (Vic ETA) and 11(Cth ETA) a requirement to produce a document that is in the form of paper is taken to have been met by an electronic form of the document. Section 14E of the VIC ETA: section 7 (which validates a transaction) applies the section to a transaction constituted by or relating to a contract. Section 9(3)(b) of the Electronic Conveyancing National Law re registry instruments. Providing Legal Services in a Digital Era? | 20 March 2018 Page 13

Legal issues regarding electronic contract Williams Group Pty Ltd v Crocker [2016] NSWSCA 265 Importance of verification of identity in e-signing. Crocker, director of customer of plaintiff. Personal guarantee signed using Hellofax e-signature system. No question as to being an effective signing process. But, was it signed by Crocker or with his authority. Crocker said someone else had signed for him without authority. Court held guarantee not enforceable because not signed. No ostensible authority or ratification. Perhaps distinguishable because Williams didn t know about system, therefore difficult ostensible authority case to make out. Ensure identity of signing parties verified two factor authentication. Eg - personal email address and mobile number. Providing Legal Services in a Digital Era? | 20 March 2018 Page 14

Legal issues regarding electronic contracting Texting and other informal writing Islamic Council of South Australia Inc v Australian Federation of Islamic Councils In [2009] NSWSC211 Constitution of AFIC required written notice from 4 state councils Vic emailed notice. Brereton J held that email constituted written notice. The purpose of requiring that notices and the like be in writing is usually at least twofold. One is to ensure that there is a formal act, so that doubt does not attend the intent of the party giving the notice. A second is often to avoid later disputation by ensuring that there is a permanent record of the notice. That said, the concept of writing is concerned with the form in which words are used, and not the surface on which they are written. Providing Legal Services in a Digital Era? | 20 March 2018 Page 15

Legal issues regarding electronic contracting Texting and other informal writing The fundamental distinction is between the written word and the spoken word. Simon Blount in Electronic Contracts (LexisNexis) expounds: Emails and by extension SMS text are ambiguous. They may approximate electronically written-up memoranda, or they may approximate electronic speaking. Whether or not an electronic communication satisfies a statutory requirement for writing will depend on the court determining the antecedent question of whether the communication approximates the spoken or written word. Providing Legal Services in a Digital Era? | 20 March 2018 Page 16

Security Email is inherently insecure Lavabit, PRISM, Wikileaks, WiFi, BYOD, passcodes. Your ISP (and your recipient s ISP) can examine all the data you send and receive via the internet as a side effect of providing your internet connection. Your email provider (and your recipient s email provider) can examine all your email simply as a side effect of providing your email service. Security is inversely proportional to useability: eg Tor, multi-factor authentication. Providing Legal Services in a Digital Era? | 20 March 2018 Page 17

Legal issues regarding electronic contracting Privacy Obligations Australian Privacy Principles If revenue over $3 million, may be applicable to law firms. APP 11: must take reasonable steps to protect personal information from misuse, interference and loss and from authorised access, modification or disclosure. APP 12: must provide access to a person's personal information upon request of that person. APP 8: If disclosed to an overseas organisation, can be responsible for the use of the information by the organisation. Providing Legal Services in a Digital Era? | 20 March 2018 Page 18

Legal issues regarding electronic contracting Privacy Obligations What is disclosure? Be very careful with cloud services. Not defined in Privacy Act. APP Guidelines say that an APP Entity discloses personal information when it makes it accessible to others outside the entity and releases the subsequent handling of the personal information from its effective control (B.64). Disclosure is to be contrasted with use . See 8.14 of APP Guidelines: For example, where an APP Entity provides personal information to a cloud service provider located overseas for the limited purpose of performing the services of storing and ensuring the entity may access the personal information, this may be a use provided: 1. there is a binding contract between the parties for the information to handled only for these limited purposes; 2. the contract requires subcontractors to agree to the same obligations; and 3. the contract gives the entity effective control of how the information is handled. Providing Legal Services in a Digital Era? | 20 March 2018 Page 19

Legal issues regarding electronic contracting Notifiable Data Breach Scheme Privacy Amendment (Notifiable Data Breaches) Act 2017 (Cth) came into effect on 22 February 2018. Applies to those subject to APPs, private health providers, those trading in personal information. All eligible data breaches must be notified to Australian Information Commissioner and individuals to whom the information related. Providing Legal Services in a Digital Era? | 20 March 2018 Page 20

Legal issues regarding electronic contracting Notifiable Data Breach Scheme An eligible data breach arises when the following three criteria are satisfied: 1. there is unauthorised access to or unauthorised disclosure of personal information, or a loss of personal information, that an entity holds; 2. this is likely to result in serious harm to one or more individuals; and, 3. the entity has not been able to prevent the likely risk of serious harm with remedial action. Providing Legal Services in a Digital Era? | 20 March 2018 Page 21

Smart Contracts Part (or all) of the process of the contract is performed by software without the need for human intervention. Arizona one of first states to define a smart contract: An event-driven program, with state, that runs on a distributed, decentralized, shared and replicated ledger and that can take custody over and instruct transfer of assets on Blockchain. Ethereum. Distributed Ledgers. DAO. Legal challenges: intention, identifying parties, notification of parties, enforcement, injunctive relief, confidentiality, privilege. that ledger. Providing Legal Services in a Digital Era? | 20 March 2018 Page 22

Contract automation Issues ETA permits automated contracts see s14C (ETA Vic) and s15C (ETA Cth). Meshing contract law principles (which allow for mistake) with an automated contract process (see also s14D and 15D of ETA Vic and ETA Cth re withdrawing from automatic contract with an error). Contract enforcement in an anonymous environment. Preventing insolvent trading and other inadvertent breaches. Legal challenges: intention, identifying parties, notification of parties, enforcement, injunctive relief, confidentiality, privilege. Providing Legal Services in a Digital Era? | 20 March 2018 Page 23

Electronic contract signing offerings e1.png e3.png Adobe Sign Providing Legal Services in a Digital Era? | 20 March 2018 Page 24

Electronic contract service offerings Docusign - http://www.docusign.com.au/ Part owned by Telstra, currently being adopted as internal e-contract standard for Telstra, appears to be dominant system in Australia and one of the market leaders in US. Adobe Sign http://www.acrobat.adobe.com/au/en/sign Major player incorporated with Adobe and Microsoft documents. Right signature https://rightsignature.com/ Citrix s offering reputation for security. Providing Legal Services in a Digital Era? | 20 March 2018 Page 25

Contract Process Tools Shake Logo www.shakelaw.com https://www.youtube.com/w atch?v=VXMYpdKL2iM codepact codepact Contract Express by Thompson Reuters Providing Legal Services in a Digital Era? | 20 March 2018 Page 26

Contract Express what is the big end of town doing? Providing Legal Services in a Digital Era? | 20 March 2018 Page 27

Contract Analysis http://www.contractprobe.com/ http://www.legalrobot.com/ Providing Legal Services in a Digital Era? | 20 March 2018 Page 28

Websites more reading www.liv.asn.au/Professional-Practice/Areas-of-Law/Technology-and-the- Law https://www.lawsociety.com.au/ForSolictors/Education/ThoughtLeadership /flip/VideoLibrary/1116862 https://www.icaew.com/en/technical/information-technology/business- systems-and-software-selection www.ethereum.org http://www.legalitprofessionals.com/ http://www.peterpmoran.com/ Providing Legal Services in a Digital Era? | 20 March 2018 Page 29

Questions? Peter Moran Principal Peer Legal