The legal profession is beginning to find ways to incorporate what they do into blockchain technology and the world of smart contracts – starting with financing legal representation in the first place.
No matter who you are, going to court is stressful. But if you can’t afford an attorney, the experience could well be justice denied. Even if you live in a first world “democracy.”
In places like Canada, this is a problem that has started to become endemic. The costs of legal representation have been on a one-way trend – up – for the last decade.
That means that the average person is priced out of obtaining a lawyer for all but the simplest transactions. Going to court is usually cost-prohibitive. And when individuals or even small businesses cannot access their rights in court, with a trained legal professional, the fundamental concept of democracy is on the line. According to the
Canadian Bar Association’s 2016 report on the topic, justice denied is a blow to the concept of a free society, and the threat is alive and well today thanks to prohibitive legal costs.
Could a new technology – blockchain – have any impact on that kind of situation at all?
Trial Token’s slogan is a simple one. “Crowd sourced litigation funding on the blockchain.”
The idea is inspired by the concept of access to justice as a basic Canadian right. According to prominent jurists like the current Chief Justice of the Canadian Supreme Court – Justice Beverley McLachlin – that access is not only diminishing but is a growing problem for many Canadians.
Litigation is never cheap. The average no-fault divorce will set couples back several thousand dollars. Small businesses are often frustrated in obtaining redress when facing legal channels to claim outstanding payables. Bigger issues and problems just get more expensive. Personal injury claims. Property damage lawsuits. Even IP infringement. Where does the little guy go when they can’t access the money to legally protect themselves or enforce rights?
When cash up front is not an option, there are few other existing ways to fund lawsuits. Some financing is available to certain kinds of litigants in the form of contingency financing. However, taking a claim on contingency can pose multiple problems for both the litigant and the lawyer. That includes a lack of hard-cost funding necessary to pursue good claims, premature settlements, and high expenses in situations where the potential claims are in the tens of thousands to millions of dollars.
And here is where the Trial Funds Society is taking a new leaf from the digital funding playbook. The group behind this ICO may look like a traditional, legal aid non-profit. Its name certainly makes it sound that way. But it is planning on using its old-fashioned advocacy status to attack this issue in a new not to mention cutting-edge way.
While the majority of coin offerings on the market right now are for private companies, this ICO will fund the technical construction of a legal platform created by a non-profit, legal aid firm. The ecosystem will connect litigants with those who might be interested in financing their claims for a return on their investment.
The platform will also provide resources related to law, rights, reform initiatives and other information.
Parts of the platform will be entirely transparent to anyone and can be used without a token. Other locations on the platform, however, will require token ownership and transfer.
One billion Trial Tokens will be created (and no more). 40% of the tokens will be sold during the ICO to pre-sale purchasers via smart contract agreements. Another 40% of the tokens will be sold during the ICO.
Token ownership will allow holders access to certain parts of the system including cases seeking representation. Key facts of each case seeking funding, litigation stage and damages sought will also be posted. This will include a detailed description of all the parties – plaintiff(s), defendant(s) and any judge that has been assigned. It will also include a detailed case background and an estimate of what the return on investment would be if the case is successful.
Even better for the litigant? Cases do not have to be funded by one investor. When cases reach the target funding amount, the plaintiff will be able to accept the investment. Investors in the litigation can follow the legal progress on the investor interface provided by the platform.
While even many Canadians do not know this, for years the profits from legal proceedings were beyond the reach of non-lawyers who were not directly involved in the suit. Third parties were banned from funding litigation for a long time. However, the financing of class-action lawsuits and a recent ruling in Ontario changed that reality. Since then, litigation funds have begun to offer ways for investors to bankroll lawsuits and share in the potential proceeds.
This means that regardless of whether the funds come from mom and pop or high net worth individuals, lawsuits have now emerged as a distinct asset class with a recognizable potential ROI.
Tort and commercial litigation are certainly exotic investments. But today, they are considered legal investments under Canadian law. And they are also very understandable, binary kinds of investment vehicles. Investing in this kind of asset is a bet, in other words, that the plaintiff will win.
Trial Token just makes that investment one step easier, by enabling the ecosystem via an ETH-based token on a single platform.
Token name: TT
Token base: ERC-20
Token supply: 1 billion (fixed supply)
Token sale date: Currently in pre-sale with ICO scheduled for Q’1 2018
Token price: 1 ETH = 20,000 TT
Purchase Requirements: Purchase restrictions apply based on nationality and where such investments are prohibited by law.