Applying smart contracts in online dispute resolutions on a large scale and its regulatory implications
This chapter identifies and illuminates the feasible regulatory space to help understand how smart contracts for ODR platforms can possibly be regulated and embedded within current law systems. The chapter first defines smart contracts and explains their relationship to blockchain. It presents their capabilities and limitations and how they are different from conventional, more centralized approaches, thereby highlighting a unique contribution that is of great help for future ODR platforms: the enforced transparency of the dispute process. Based on this technical analysis, the chapter proposes an approach how smart contracts can be useful in ODR platforms as they are used today, such as the EU ODR platform, by outlining the principles applying to arbitrators and definitions of access control, e.g., the need for access for state actors. The chapter presents possible approaches to apply smart contracts to standardize the procedures of lodging cases on a large scale and handling disputes in an efficient manner. The proposals are based on lessons learnt in the last few years in the development of smart contracts on the Ethereum blockchain, currently the only major blockchain that supports smart contracts. The chapter concludes with an analysis of implications for future regulation and legal compliance.