UK Law Commission announcement re digital trade documents could be tipping point: Reed Smith

The recent announcement by the UK Law Commission with regard to the acceptability of digital trade documents could turn out to be a tipping point for the growing acceptance of electronic bills of lading and other shipping trade documents, according to Nick Austin, partner at legal firm Reed Smith, who was speaking at the firm’s webinar on technological developments in the shipping industry – part of London International Shipping Week 2021.

However, Austin noted that the Law Commission had called the current electronic offerings had been “workarounds”.

Alexander Goulandris, a maritime lawyer who had worked for maritime lawyer specialists FHM and HFW in the past, and who is co-founder & co-CEO at essDOCS, said that what the Law Commission had said was true. Because of the state of the law at the moment, current electronic document solutions were of necessity a workaround. He agreed that the ideal scenario would be the world recognizing electronic bills. A change to UK law would be massively impactful as the UK is a world centre in maritime law. It was seen as a country that drove the direction of legislative change. A change of law in the UK would undoubtedly make other commonwealth countries accelerate their work in this regard.

However, we also needed a critical mass of countries, but it is an important step forward.

Goulandris said that, while it was unlikely that all 200 countries in the world would pass compatible legislation on electronic documentation, that number of countries was not needed. Only 30 or 40 countries were needed – those being the leading maritime nations and the leading financial centres. “I think we can get to the point where we are 80% or 90% compliant”, he said, noting that support from the G8, the UN and the ICC had been helpful. “The momentum is there. Fraud has always been a key trade problem. We are still struggling to control massive amounts of cross-border fraud, and digitization would be a massive help in that”.

The webinar also discussed developments in autonomous vessels and blockchain.