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Legal Tech and Its Foray into the Indian Legal System

By Ms. Vasundhara Shankar.

It will not be an exaggeration to say that technology has transformed the way the world functions, in every possible manner. From how we access basic information, make payments, communicate, shop, to how we are treated, profiled and perhaps even located.

India has been the hub for software development since the late 20th Century. With massive technology based work happening in the country in sundry industries, it is upsetting to see the lack of integration of law and technology. For a country which has produced startups which facilitate ordering milk to one's doorstep every day to ones facilitating transactions worth millions within seconds, the lack of available and relevant data is also disappointing.

For a democratic country like India, having a robust and effective justice system is imperative. The world's most populous democracy and its legal system are facing huge magnitudes of legal issues such as massive pendency in courts, delayed justice, difficult access to justice, ineffective laws, etc. While setting up more courts, appointing more judges and judicial officers are perhaps some effective ways of dealing with some of these issues, the solutions seem to be too little, too slow for the current situation we are in.

Right now, seems to be an opportune time for technology's foray into the legal and justice system of the country. While the country has seen several legal-tech products sprouting over the last few years, most of them lack the propensity to sustain and survive due to either lack of required resources, an effective enough product or owing to the legal industry's hesitation regarding venturing into the "unknown" world of technology.

In a country with a population of 1.3 billion people and industries worth a trillion perhaps, how does one effectively set up a justice system which is not plagued with pendency and delays? Is building management solutions for practice & smart-docketing for documents sufficient? Without vilifying the importance and efficiency of these products, we must acknowledge that the system needs a disruptive change, and now seems like the perfect opportunity.

The first step to help individuals would be to perhaps set up products which make access to legitimate legal information easier. India's legal framework, laws and rules are complex, elaborate and difficult to understand for a layman. Easier access to laws will make it more convenient for an individual to understand and know of their rights. Building a self-help bot using artificial intelligence models and Natural Language Processing as well as Machine Learning to train bots so they become efficient enough to understand context of a question posed by a user, process its meaning and scope, and generate responses that will be helpful to guide an individual towards the right approach to a problem. While this product will perhaps not cure the legal system, it will perhaps help individuals filter litigious and non-litigious matters.

An automated platform for individuals where they can effectively have smaller issues such as challans/tickets issued to them, small-ticket consumer protection matters, insurance claims, customer service claims, small recovery amounts etc. would be a game-changer. It will not only reduce the number of cases being registered before the courts, but will also provide them quick resolution of their cases which would’ve otherwise taken years to be resolved.

An effective, technology driven closed-circuit alternate dispute resolution product would also create a massive impact. A holistic technology product which facilitates an ecosystem for all parties to a dispute resolution including the claimant, the defendant and the neutral third party mediator or arbitrator. This product could provide a secure repository for documents, a smart reading of the problem statement, claim, facts at hand, and uses technology to suggest possible solutions considering the facts, laws applicable and relevant judicial precedents.

The effect of technology has been changing the way communication is done, transactions are completed, business is carried out, etc. Over a period of time, technology has impacted all walks of life. While growth of the legal-tech segment has been slow and sporadic in the Indian ecosystem, there have been substantial developments over the past few years. With only 4% of lawyers using any kind of technology in India, the need for better legal-tech synergies is greater than ever.

With growing pendency, there is an urgent need to find methods that can help create optimum solutions. While technology is being used to handle and docket cases through case management solutions, these developments are merely the tip of the iceberg, with the vast use of artificial intelligence, machine learning, blockchain, etc.

It is perhaps the right time to use more advanced technologies, and make research, service deliverance, smarter and more efficient. Finding alternate methods to resolve disputes using technology is definitely going to have a great impact. It is time for legal experts to venture into the technology space, garner a deeper understanding of how technology functions and find innovative ways to integrate law and technology.

With technological development always comes concerns of privacy and protection of data being collected and stored by such technological products. With India being known as the world’s technological capital, it is only right for the nation to develop disruptive technology products in all domains, and law should not be left behind! It is perhaps due to the conventional and traditional functioning of India’s legal system that lawyers have chosen to remain distant from tech advancements. With almost a billion cases pending across different courts, authorities and jurisdictions, these developments could not come in sooner. The best of enablers, technology should be utilised as a tool with more vigour than ever before.

Time is right with courts mandating e-filing of petitions and several legal-tech companies coming up with innovative solutions for contract management, legal document docketing, and smart research tools. The legal fraternity has taken to digitisation, owing to the restrictions and access issues created by the pandemic. India’s overburdened judicial system has the potential of impacting its citizen’s democratic rights. Lack of access to justice has been a grave issue, even in mature systems. Technology integration penetrating the legal industry is indeed a foreseeable development. The agenda at this point should be to build technologies to avoid registration and filing of new cases, to resolve existing cases and to work towards building a more robust system so that this pendency and lack of access to justice issues do not arise in the future.

India’s startup ecosystem has evolved at a significant pace, which has brought about innovative transformation in the way businesses function. One legal-tech product that I foresee being of great use would be a contract automation and management tool. As business transactions grow in number, disputes arise too. With better drafted contracts, or agreements using blockchain to determine liabilities, secure transactions and trigger obligations better would be of great help to businesses. Frivolous cases by either investigating authorities or disputing parties can be stifling for a growing business. Businesses are more often than not, clueless about the favorability of a contract and fail to identify clauses or aspects that could cause trouble to them in the future, without legal assistance. Most of them are unable to afford legal help and hence, enter into agreements with worrying clauses that impact them in the future. Additionally, lack of understanding amongst investigating authorities of innovative business models also prove to be of concern, since the investigation is almost always misdirected, which in turn affects and gravely impacts penalisation of the wrong party. Individuals are also impacted directly owing to the lack of access to justice, which leaves them battling with unnecessary and prolonged litigations. India’s complex legal system and expansive legislations also are a major concern for all parties involved, since understanding liabilities and obligations become even more difficult.

Legal Technology as a domain has the potential of solving concerns for all stakeholders involved. From saving millions for businesses, to helping citizens with their legal battles, legal technology has more potential to assist than was perhaps earlier envisioned.

However, one of the biggest challenges that a well-developed legal tech domain will also bring in is data protection and confidentiality concerns. There has been a delay in the enactment of the proposed Data Privacy bill in India which perhaps needs to be accelerated, giving general data privacy concerns that have been evident across all industries. Legal-tech is one of the most sensitive industries considering the type of data or information these potential and proposed technology products would be dealing with.

Having robust data privacy laws that protect the data subjects and ensure accountability with the right stakeholders is extremely important at this juncture.


About the Author

Ms. Vasundhara Shankar, the Managing Partner of Verum Legal, has worked with over 350 startups till date. She focuses on Data privacy, IP, Tech laws, white-collar crime, dispute resolution & legal tech innovations.


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