This Company Wants to Give You a Divorce on the Blockchain

Whether you're going through a divorce, an eviction issue, or a wrongful dismissal case, most Canadians will need a lawyer at some point, but many will not be able to pay for one. According to Canadian Lawyer's 2016 legal fee survey, the average cost of an uncontested divorce in Ontario is $1,302, as just one example, and a simple will costs $521.

One Toronto developer thinks the blockchain could help. Matthew Rappard, 33, wants to empower people to do their own legal work instead of hiring expensive lawyers. That's the idea behind StonePaper, an app launched in February 2016 that's now available in an invitational beta phase, which means the public can sign up with an invitation.

Using blockchain technology that underpins the cryptocurrency Ethereum (a bitcoin alternative), and merging it with contracts written by lawyers, users would be able to initiate and complete legal matters entirely through the service. Information stored on the blockchain is "immutable," or unable to be changed. In a normal database, a contract might be susceptible to tampering, but this technology allows an entire contract to be stored on thousands of computers all over the world. Anyone can see that a particular contract has been created and can verify that it is a real contract, but cannot read it without the user's permission.

The electronic contract could be signed just like any contract. The user would be given a memory address to where the contract exists on the blockchain.

Here's how it might work: instead of hiring a lawyer, a mother who did not receive a child support payment could file a grievance on the blockchain, which would automatically notify the father, and begin generating the necessary paperwork for a court case.

The father could then use the same contract to generate a report defending himself, pay child support, or take whatever other steps are necessary to resolve the issue. All payment could go through the blockchain so that the court would have a complete list of all transactions. This would ideally reduce court costs, and allow users to resolve many legal issues themselves.

StonePaper provides each user with a unique identity. "You would make an account, which creates an Etherium wallet, then a bank or lawyer would swear that this wallet belongs to you. Now if you were to go to any site and sign a document, when you click 'send,' that entire document is digitally signed with that wallet. Since a lawyer or bank has agreed to say that wallet is you, it means only you could have put it on the blockchain," said Rappard in an interview.

StonePaper will be providing open source code for contracts that it recommends people use. Rappard expects that, as the technology becomes more ubiquitous, people will "hack the law" and write their own. For now, he recommends that people not sign an e-contract in which they can't audit the code, and that lawyers only deal with experienced developers.

Cost of the service would vary based on the lawyer and the type of contract used.

"Anyone can write their own contract [but] lawyers are normally better at it. And since electronic contracts are governed by the same laws as paper ones, you need a lawyer to do something complicated," explained Rappard.

Still, there are security concerns given the recent hack of the Distributed Autonomous Organization (DAO), an investment platform on the Ethereum blockchain. The platform was designed to take money from investors and put it into projects that the investors had voted on through smart contracts. Due to a weakness in the code, a hacker stole about USD $60 million worth of Ether (Ethereum's digital currency) from the DAO's funds.

Rappard said that while the DAO hack caused a lot of problems for smart contracts, StonePaper would not be vulnerable to similar hacks.

"The DAO hack was not a security flaw in Ethereum, but a flaw in the software that DAO ran on," he said, adding that StonePaper has learned from this. "StonePaper contracts can only be modified if the wallet accessing it is one of the signatories. This effectively stop the hackers in the same way a password protects a computer. If a signatory tries to hack the contract, that is considered a contract violation under law, and the user will be subject to punishment."

Unsurprisingly, not everyone is comfortable with the technology.

"The biggest hurdle is just getting people in the blockchain mindset," noted Rappard. "Some people generally don't like to trust a computer if they can avoid it. Judges and lawyers can be especially wary of new technology." Still, with legal services out of the reach of many because they're so expensive, a service like this will have its appeal.

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