In Bloomberg Law, Attorneys Analyze Benefits & Risks of Decentralized Dispute Resolution
In a Bloomberg Law article, attorneys examined the benefits and risks of decentralized dispute resolution.
A relatively new blockchain application is an emerging form of alternative dispute resolution known as decentralized dispute resolution. DDR refers to a method of resolving disputes between private parties using blockchain-assisted technology and a decentralized set of decision-makers, as opposed to a centralized decision-making authority. This innovation may assist parties in resolving disputes arising out of smart contracts, which are programs that enable self-enforcing agreements built on blockchains. DDR does not eliminate the role of humans entirely; since it still requires judgement and discretion, DDR instead shifts the decision-making process to a more diffuse group of individuals.
The authors note that DDR might offer an attractive substitute for typical methods of dispute resolution, including court litigation and private arbitration. Proponents of DDR believe that it may permit parties to resolve disputes more quickly at lower costs, with enhanced protections for the decision-making process. The article provides background on blockchain technology and the application of distributed ledger functionality to dispute resolution, and analyzes potential advantages and challenges posed by the emerging use of decentralized systems.
The article was authored by litigation & enforcement counsel Mark Cianci, litigation & enforcement partners Amy Jane Longo and Daniel Ward and corporate associate Jonathan Iwry.