The Governance of Blockchain Dispute Resolution

Blockchain technology acts as infrastructure for self-executing smart contracts. Because contracts are incomplete and some parties are opportunistic, these new contracting possibilities have created challenges of dispute resolution. For instance, will smart contracts be recognised, and any disputes resolved, within the existing courts of jurisdictions? In this paper we first map some institutional governance possibilities for contracting parties (e.g. mediation, private arbitration, courts) to create a Dispute Resolution Possibility Frontier (DRPF). Second, we provide case studies of emerging blockchain-based mechanisms to solve dispute resolution challenges. Blockchain-based smart contracts might not only create dispute resolution problems, but also act as a technology for entrepreneurs to create new mechanisms to solve dispute problems, including those arising from traditional legal contracts. Contracting parties will subjectively interpret their most effective governance mechanism to resolve disputes, and the costs of dispute resolution will change over time through a process of institutional innovation.

Keywords: Blockchain, Dispute Resolution, Online Dispute Resolution, Distributed Ledger Technology, Institutional Cryptoeconomics, Institutional Possibility Frontier, New Comparative Economics, Smart Contracts

JEL Classification: K12, K24, K40, P48

Suggested Citation: Suggested Citation

Allen, Darcy W E and Lane, Aaron M. and Poblet, Marta, The Governance of Blockchain Dispute Resolution (February 15, 2019). Allen, DWE, Lane, AM and Poblet, M. 2019. The Governance of Blockchain Dispute Resolution, Harvard Negotiation Law Review, vol. 25, pp. 75-101 , Available at SSRN: https://ssrn.com/abstract=3334674 or http://dx.doi.org/10.2139/ssrn.3334674