Lighthouse Nordic School of Proactive Law Conference 2005: Fusing Best Business Practises with Legal Information Management and Technology


Opening keynote - What preventive and proactive law has to offer the IT business and vice versa - Edward A. Dauer, Dean Emeritus and Professor of Law, University of Denver, College of Law, USA

Although this has never been statistically tallied, it seems clear that legal risk may arise from either a failure of proactive documentation, or from a flaw in an organization's culture. People create legal risks, doing just what they believe the organization expects them to do. Indeed, it is probably true that whenever law and culture conflict, culture will almost always win. Legal risk management therefore calls for attention to both - to thoughtful proactive contracting, and to pragmatic shaping of a culture of legal compliance and good governance.
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An economist's view of proactive law - Henrik Lando, Professor, Department of Industrial Economics & Strategy, Copenhagen Business School, Denmark

Proactivity is a natural part of law & economics. This presentation provides an introduction to why contracts and other legal arrangements should or should not be managed proactively. The presentation also comprises reflections on the (economic) effect of regulating or managing legal relations by technological means.
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Single sign on market places and other legal challenges - Nicklas Lundblad, Vice President of Stockholm Chamber of Commerce, Sweden

Single sign-on and other usability enhancing features may well lead to new problems; in creating proactive solutions we often find new problems that need to be addressed. Here some examples of this will be discussed.
Programme       Presentation of speaker             Slides (pdf 633 KB)

E-government - a prospering e-business model - Dag Wiese Schartum, Professor of Law, University of Oslo, Norway

E-government is to a large extent about transferring work from a government agency to other government agencies, private businesses and individuals. Such outsourcing may seem to entail a loss of government control and thus a higher risk of prospective legal conflicts. However, e-government as a prospering e-business model is about shifting work to other actors while still retaining control.
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Information resources - the new corporate asset - Jarl Magnusson, Director, Norske Veritas (DNV), Information Resource Management, Norway

Information has become one of the most significant resources for the evolving Information Society, or Digital Society as articulated for this conference. Our ability to manage, use and control data and information will directly relate to the confidence we feel and the rationality, effectiveness and safety we can expect from the public sector. It's not a question of what kind of computers we will have or if Microsoft has the best software packages or the type of broadband network, that's important, the issue here is actually about the availability and accuracy of data and information. Proactive law means (of a policy or action) controlling a situation by causing something to happen rather than waiting to respond to it after it happens. This indicates a change in view of how we apply and use our laws, rules and regulations. We will through the proactive law construct be able to rule in favor (or against) citizens before they even know about it. In order for this to work, we need to transform current legislation into automatic and repetitive rules, that will capture needed decision support information and deliver a rules-based outcome (decision or recommendation).
    The information society is much faster than the information technology society we have today. There are a number of Paradigm Shifts we need to pass through, like going from handling documents to managing the information content and going from identifying computers to identifying physical and legal persons.
    Our desire must be to strengthen democracy and protect citizens’ rights and freedoms. A prerequisite for that is to increase citizens’ ability to understand society and abide by laws, rules and regulations. Society should better understand citizens’ needs, so the right public service and support can be provided at the right time (automation). And, all this is possible if and when we focus more on our information resources.
Programme       Presentation of speaker                 Slides (pdf 777 KB)

Vendor collaboration in the digital society - Babak Sadighi, Swedish Institute for Computer Sciences, SICS, Sweden

Traditional security mechanisms are designed to prevent bad behaviour or enforce good behaviour of users. For technical or economical reasons they are not suitable for use in collaborative environments. Agreements between enterprises prescribing how they should interact, how their interaction should be monitored, and what the consequences of their misbehaviour are, fill the gap where security mechanisms cannot be employed. Moreover, agreements will allow higher flexibility for the users to adapt their actions to current, sometimes unanticipated, situations, something traditional security mechanisms are unable to. However, managing these agreements requires security mechanisms, e.g., to ensure integrity of the agreements and to guarantee secure evidence-gathering for their fulfilments and non-fulfilments.
   This talk will highlight the importance of and the need for languages and mechanisms supporting specification, management and enforcement of agreements among collaborating enterprises. We present some existing approaches and research developments in this area.
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The value of information - the business perspective - Jonathan Armstrong, Eversheds, UK

This talk will explain some of the experiences in looking at the value of information - the legislative background and likely additional pressure points for global businesses. Jonathan will illustrate his talk with case studies on issues like phising, cybersmearing, aggregation, blogging and paid-for placement.
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A business approach to long term archival of electronic documents - Mikael Dahlin, Corporate Archivist, Head of Documentation Department, Swedish Prosecution Authority, Sweden

E-business discussions about record management conventionally take its starting point in systems for different kinds of on-line transactions. Not least the formal legal requirements of long-term archival of business records prove in practice to be a true challenge to management. By proactively taking advantage of information standards much can be accomplished not only in terms of legal compliance but also as regards corporate governance.
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Digital rights management - Niels Bo Jørgensen, Attorney-at-Law, Johan Schlüter law firm, Denmark

Digital Rights Management Systems (DRMS) comprise technologies that identify, describe and regulate digital content in the form of sound, video or software in digital format - typically media products, which are protected by copyright.
     Content owners use DRMS to enforce the terms and conditions under which the content is available, e.g., to facilitate legal copying and reuse of content by establishing an environment in which rights-holders are compensated for private copying; to limit or broaden the consumer's access to and use of the material, either so that the customers can carry out a certain number of copies of the material or so that the customers can access the content wherever and whenever they choose - or limiting certain geographic regions from access to the material.
    Standards have a fundamental role to play in establishing DRMS in the marketplace. Without standards neither compatibility nor interoperability would be possible. Along with interoperability consumer acceptance is a key word in DRMS. An example of this can be the iPod music services. Relying on proprietary protection through its FairPlay DRM, Apple effectively creates entry barriers to its portable players and download market. Competitors, both through technological and legal means, have recently challenged this practice.
    On the consumer side, questions arise concerning the removal of DRM from digitalised music, film etc. and the legal requirements applicable to the use of DRM for gathering personal data. Though as a starting point, "Internet is just another media", there are several issues that should be considered before making use of such data - or removing the content-protection technologies that may be applied as part of the service provider’s DRM policy. The INFOSOC directive supports the use of DRMS by protecting technical measures and by requiring member states to take into account the application and non-application of technological measures when providing for fair compensation in the context of the private use exception for which fair compensation is required. But in a recent French court case, the court prohibited certain companies from using technological measures on a specific DVD because it would be incompatible with the exception for private copying.
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Do we need electronic signatures and can we trust them? - Cecilia Magnusson Sjöberg, Professor of Law, Stockholm University, Sweden

Electronic signatures have come to play a more important role over the years both in the context of e-commerce and e-government. It is now high time to reflect upon which security functions are in fact needed from a legal point of view in order to accomplish trusted e-business. A legal risk analysis is particularly warrented considering that electronic signatures might give rise to unfounded trust as well as unfounded mistrust.
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Proactive Law in Practice: Safe Sales through proactive contract management, online and offline - Helena Haapio, International Contract Counsel, Lexpert Ltd, Finland

Large organizations make hundreds of contracts each day. The quality of those contracts has a significant impact on both business performance and risk exposure. Some companies are still learning the hard way that getting contracts wrong is expensive.
    Even small transactions can expose a company to a large overall risk. Contracts can provide certainty, but can also contain pricing or other errors. When dealing internationally, it is particularly easy to get into legal trouble. Relationships suffer and the damage caused to reputation can be permanent. Automated processes and forms can multiply the hazardous impact. Instead of profits, they may be generating problems at Internet speed.
    This session suggests that many of these issues can be resolved through Proactive Contracting: the conscious use of contracts as business and risk management tools. It is not enough to look at one contract at a time; we need to look at the entire contract portfolio and the process through which it is generated. Corporate Governance policies require a disciplined and thorough contracting process. Effective inter-professional collaboration is needed in the design and management of that process, so that it produces successful relationships and trouble-free transactions on an ongoing basis, even when people change. Contract authoring tools and contract management systems are now available to help. Using existing technology, we can provide clients with skills, tools and techniques that support them in reaching business goals and avoiding project failures. Working together, fusing sound business and legal practices, we can systematically secure Safe Sales: integrate quality and risk management with Proactive Law, and embed them into our clients’ presales and sales processes, on-line and off-line.
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E-negotiations - Eric M. Runesson, Partner at Sandart & Partners, Sweden

IT has opened up great opportunities to use software solutions in order to facilitate analysis, decision-making and agreement drafting. An analysis that only some ten years ago took weeks to work out can now be made in minutes. During the presentation Eric M. Runesson will discuss and demonstrate how IT-solutions can be used proactively in contract negotiations as an analytical tool in complex multi-issue negotiations and so called post-settlement settlements. This part of the presentation will include some empirical findings from an experiment regarding how good or bad we seem to be when it comes to maximizing value and crafting optimal negotiation results. He will also demonstrate how a system for automated contract drafting might work and be a part of a broader contract management solution. IT has also brought forth a new communication channel for negotiators which have proven to be both good and bad. Eric M. Runesson will conclude the presentation by drawing attention to how the communication in negotiations face to face might be different from communication via e-mail and discuss how some of the perils inherent in e-communication can be avoided. Programme       Presentation of speaker

Websites, new legal risk exposure and insurance - Sari Lintumaa, Senior Manager, Aon Finland Oy, Finland

Websites and new technologies offer vast opportunities to expand business worldwide, collect information and communicate faster than ever. On the darker side of these opportunities hide new legal risks, such as infringement of intellectual property rights, damage to computer data or networks, and losses sustained due to denial of service.
    Today more and more companies admit that legal risks are an essential part of their risk portfolio. Legal risks have still not gained the attention they deserve when determining a company’s risk management policy. The management of legal risks is an essential part of business process just as management of any other risk. Yet legal risks may be put aside for lawyers to handle. And for lawyers, the management of legal risks may be synonymous with the mitigation of losses, not a proactive process to prevent problems from emerging in the first place. Sure, we can learn from losses but it is the hard way, and definitely not the most economic one.
    The realization of legal risks may lead to substantial financial losses and have a catastrophic impact on a company’s business. The obligation to pay damages is just one of the adverse effects. Imagine what a high profile liability case may do e.g., to a company’s reputation, stock value, and profitability in the long run!
    Insurance programs may offer some financial help – or they may not. Traditional insurance policies may still have huge gaps in respect of website legal risk exposure leaving the company to conquer the risks alone with its own assets. Proactive measures are needed to manage these risks and to build insurance cover where possible.
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Legal risk management in a global, electronic marketplace - Jan Trzaskowski, Research fellow, Law Department of Copenhagen Business School, Denmark

Information on the Internet may be downloaded from all over the world. By carrying out commercial activities on the Internet, businesses expose themselves to the risk of infringing the law of multiple states. Law may be enforced through the Judiciary (traditional law enforcement) or by alternative means such as blocking and unfavourable commenting (alternative law enforcement).
    Within public law (criminal and administrative law), it is quite difficult to enforce legislation by traditional means if the defendant has no assets in the foreign state, where legal action is taken. If, however, the enforcement is carried out by private parties, such as consumers, competitors and private organisations, the access to cross-border law enforcement within Europe is substantially better.
    Even though the Internet is a global medium, it is possible, at least to some extent, to apply means of geographical delimitation, whereby businesses may mitigate or eliminate the risk of cross-border law enforcement. Businesses may also include clauses on jurisdiction and applicable law, which to some extent can eliminate the risk of cross-border law enforcement.
    The provisions of the EC Treaty constituting the Internal Market and the country of origin principle of the 2000 E-Commerce Directive, influence possibilities in cross-border law enforcement within the Internal Market. It cannot be excluded that EC legislation, to some extent, limits businesses' access to confine their activities to certain jurisdictions.
    The purpose of this presentation is to provide an overview of the possibilities in cross-border law enforcement and the means of risk-mitigation, which may be applied by businesses in this context.
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Working Party for Proactive Law in E-business
Editor: Professor Cecilia Magnusson Sjöberg
+46 (0)8 16 28 93