Sarah Green, Law Commission


“…were the question simply to be what medium would be the best vehicle in practical terms of recording and transferring rights, obligations, liabilities and assets, paper is simply not the answer”

Nobody wonders why we no longer use clay tablets to communicate in written form.  At one point in history, such media would have been transformative and indeed an ingenious means of recording information.  They were, presumably, things to inspire wonder and awe, and people must have wondered after a few lunar cycles how they ever managed without them.  And yet now they are so practically unsuitable for the job that any suggestion of using them would invite ridicule.  This is a point so obvious as to sound vacuous.  And yet, the same is arguably true of the use of paper in trade in 2024.  That is, were we to ask ourselves today what is the best medium for conducting international trade transactions, paper would not be top of the list, everything else being equal.  In other words, were the question simply to be what medium would be the best vehicle in practical terms of recording and transferring rights, obligations, liabilities and assets, paper is simply not the answer.  Paper is easily destroyed and its contents quickly forged; it is slow to transport and its use at scale is environmentally damaging.  But, and it is a big but, it is familiar, it is trusted and, to varying degrees across the world, it is legally required.  So, despite the fact that paper is no longer as a matter of fact the best tool for the job, it remains widely used and regarded as the default medium for trade transactions. 

The best tool for the job is of course digitalised documentation.  The benefits of digitalisation as compared to paper are obvious:  digital documents and electronic execution are more efficient, more resilient to fraud, more robust, more environmentally-friendly and more user-friendly than their tree-derived counterparts.  And now, increasingly, initiatives and reforms across the world, such as the UNCITRAL Model Law on Electronic Transferable Records (MLETR), the ADGM’s Electronic Transactions Regulations 2021, the recent amendments to the Singapore Electronic Transactions Act, and the Electronic Trade Documents Act 2023 in the UK (not to mention a few other exciting prospects on the immediate horizon) mean that the legal barriers that used to mandate the use of paper are being removed at an ever-increasing rate.  This is seismic. 

Seismic but not sufficient.  Legal reforms are of course necessary in order to facilitate changes in behaviour, but they can only provide opportunities.  What has permission now needs commission.  Of course, this is easier to say than it is to do.  But it is also easier to do than it has ever been before.  As with anything new, digitalisation brings with it a set of unfamiliar risks.  And cognitive dissonance means that these risks are harder for us to accept than familiar risks, even if, as in this case, the latter are actually greater in number and gravity than the former.  The sooner digitalisation is adopted, the sooner its attendant risks will come into proper perspective.  It will then be clear that trade is worth more than the paper it has for so long been written on. 

It is not only the legal effect of these reforms that points towards greater digitalisation.  The very fact that the law in so many major jurisdictions is changing to accept digital documents is remarkable in itself.  Since the law is responsive rather than predictive (and commercial law in particular is a cautious beast), these reforms prove that technology has now reached a stage at which it can (at least) faithfully replicate the functionality of paper.  As a law reformer, take it from me that these reforms would not have been possible had the technology not been proven to be at least as good as paper.  (The fact that digital paper is actually an improvement was of course a bonus.)  But the message is clear:  if the gatekeepers of commercial law are convinced that something is worth changing, it undoubtedly is.  That threshold for persuasion is vertiginously high.  At the same time, it is worth remembering that that, really, there is nothing new under the sun.  A digitalised document is just paper, but better.

  • In Conversation with the Law Commissioner on Digital Assets Official Monetary and Financial Institutions Forum,
  • Arbitration Act 1996 Amendment Bill Special Public Bill Committee Principal Witness, House of Lords
  • Why We Need the Electronic Trade Documents Act Trade Finance Distribution Initiative
  • Opening up the International Dispute Resolution Toolbox:  are Existing Methods Fit for Purpose?  London International Disputes Week
  • The Law and Digitised Assets Keynote, Manchester Law and Technology Conference
  • The Law and Tokenisation Bank of England
  • The Work of the Law Commission London Maritime Arbitrators’ Association Annual Dinner