– Queen Mary University of London

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If implemented, the reform would see the legal recognition of business documents such as bills of lading and bills of exchange in electronic form rather than paper-only.

Miriam Goldby, Professor of Maritime, Insurance and Commercial Law at Queen Mary University of London, who has spent many years studying the digitization of international business processes, has been seconded to the Law Commission on a part-time basis to work on the project. This work was part of one of the impact case studies submitted by Queen Mary in REF 2021.

The impact of dematerialization

The trade and movement of goods across borders generates billions of paper documents each year. The International Chamber of Commerce has estimated that digitizing business documents could generate £25 billion in new economic growth by 2024 and unlock £224 billion in efficiency savings.

This reform would also align the UK with the global trend of initiatives to digitize business documents. In 2017, Working Group IV of the United Nations Commission on International Trade Law (UNCITRAL), of which Professor Goldby was a member, adopted the Model Law on Electronic Transferable Records. A number of countries, including Bahrain and Singapore, have already adopted legislation based on the Model Law and others, including the G7, have committed to adopt legislation consistent with the Model Law that allows the use of commercial documents in electronic form.

The report also identified significant direct and indirect environmental benefits of moving to electronic trade documents, including the reduction of the 28.5 billion paper trade documents currently in use each year.

Why was this not passed before?

Despite the size and sophistication of the international trade industry, many of its processes, and the laws that underpin them, are based on practices developed by traders hundreds of years ago. These practices involved linking the right to claim performance of an obligation (such as the obligation to deliver goods or pay a sum of money) to the possession of a paper document in which the obligation was recorded. . Under current English law, only tangible things can be possessed, which means that this function cannot be performed by an electronic document, although there are technologies that can link an electronic document to a single user, for example blockchain technology. The reforms advocated by the Law Commission aim to modify this state of the law, by making an electronic document possessed, provided that it meets certain requirements. The bill is currently undergoing the parliamentary adoption process.

Read the full report and Electronic Trade Documents legislation.

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