**2.3 Making an inroad**

Even with the limitations that not all of them are fully automated by computer codes, smart contracts are efficient in many ways and generate positive impacts on the contracting life cycle. Optimum benefits can only be gained if smart contracts are recognised and used by the legal professions. In England and Wales, over a period of four years, blockchain-enabled smart contract progressed from being the least accepted emerging technology to being recognised as an instrument fulfilling the same function as the traditional natural language contract. **Figure 2** shows the rise of

**Figure 2.**

*The timeline of the reception of smart contracts by the legal profession.*

#### *Blockchain-Enabled Smart Legal Contracts DOI: http://dx.doi.org/10.5772/intechopen.109041*

smart contracts from an emerging technology that aids to define and perform contractual obligations to becoming an integral part of legal practices and a mainstream area of law.

In 2018, the legal profession did not embrace blockchain technology with much enthusiasm. This is reflected in the survey done by PWC on the top 100 law firms regarding the use of emerging technologies in legal practice [15]. The survey reveals that blockchain technology was not interested/aware and it was classified as being under research by law firms. The technology was the least mature in application amongst other digital and emerging technologies at the time, like Artificial Intelligence, Robotic Automation, and Predictive Analytics. Since then, the reception of smart contracts by the legal industry has grown from zero to formally embraced as an instrument that is capable of having contractual force just like a traditional natural language contract. This is demonstrated by a series of publications from the government-backed UK Jurisdiction Taskforce, the Law Society, and the Law Commission of England and Wales.

In 2019, the UK Jurisdiction Taskforce (UKJT) published a legal statement on smart contracts [16]. Based on extensive consultation from a broad range of experts: technologists, legal practitioners, judiciary, and academics, the legal statement states that a smart contract satisfies the legal requirements of creating an agreement between parties and is capable of having contractual force just like the traditional natural language contract. The rights and obligations written in computer code are binding and enforceable under the well-established English contract law.

In 2020, the Law Society of England and Wales published regulatory guidance on blockchain technology [17]. The guidance provides a rich source of information on the best practices for legal practitioners working on transactions involving smart legal contracts. This represents a formal recognition of the accepted use of smart contracts. A significant implication of this publication is that every practising lawyer in England and Wales must be conversant with the application and operation of smart contracts as per the professional code of conduct. Keeping the regulations in sync with the other advancements, the second edition of the report was published in March 2022 [18].

In 2021, on consideration of whether statutory reform is required to deal with the increasing use of smart contracts, the Law Commission carried out an extensive study on the application of existing English law to the smart contracts [14]. It should be noted that each country has its own legal system. In general, the legal systems in countries around the world can be classified as either common law or civil code. In common law countries, the system is based on case law derived from judicial decisions; whereas the civil code is built on codified statutes [19].

The Law Commission concluded that "the current legal framework is clearly able to facilitate and support the use of smart legal contracts". They confirmed that statutory law reform is not needed as common law in general can respond consistently and flexibly to new commercial mechanisms. Judges can apply and adapt existing principles to new situations as they arise. The Law Commission's study supports the earlier UKJT legal statement that a smart contract can be enforced and used as a natural language contract.
