While applying blockchain to ensure the authenticity of electronic data, Hangzhou Internet Court has been upgrading its evidence rules in reviewing such e-evidence.
Chinese courts have been exploring the application of blockchain technology since 2018, and have achieved some progress.
Two judges of the Hangzhou Internet Court, Chen Mo (陈蓦) and Zhang Mingyang (张名扬), presented their views in an article in Oct. 2020.
The article is titled Application and Development of Blockchain in Internet Justice: An Empirical Analysis of Blockchain Judicial Platform of the Hangzhou Internet Court (区块链在互联网司法中的应用与发展——基于杭州互联网法院司法区块链平台的实证分析), published in People’s Judicature (人民司法) (No. 31, 2020).
We will give a brief introduction to their opinions as follows:
Currently, electronic evidence has been regarded as a new type of evidence pursuant to China’s procedural laws.
However, electronic data is easy to be tampered with in the aspects of collection, extraction, preservation and transmission, which makes it difficult for judges to determine its authenticity and integrity.
As a result, judges often question the admissibility and weight of the electronic evidence. According to statistical analysis, in most cases (92.8%), Chinese courts have not made a clear judgment on whether electronic evidence is admissible or not, whereas in only a few, accounting for 7.2%, a clear judgment was made. For the latter situation, there are three types of opinions, i.e., full admissibility of the electronic data, partial admissibility of the electronic data and denial of the admissibility of electronic data (affirmed as having no weight of evidence), which account for 29.2%, 2.0%, and 68.8% respectively.
However, for Internet courts, evidence in almost all cases is mainly presented as electronic evidence. So, the admissibility and weight of electronic evidence is the problem that Internet courts have to face.
II. Blockchain Technology Accepted by Internet Courts
Since day one of Chinese Internet Courts, evidence rules on electronic data have long been a priority.
On 6 Sept. 2018, Article 11 of the Provisions on Several Issues Concerning the Hearing of Cases by Internet Courts (the “Provisions”, 互联网法院审理案件若干问题的规定) issued by the Supreme People's Court (“SPC”) specifies Internet courts’ rules for identifying the authenticity of electronic data and, for the first time, proposes to encourage and guide the parties concerned to apply the blockchain technology.
However, the blockchain evidence is not completely risk-free, and it can still be tampered with. Such risks are reflected in the following aspects:
1. Bad faith ab initio. It means that the raw electronic data uploaded by the parties in the blockchain itself is fabricated in bad faith.
2. Repeated evidence preservation. Where a party is in possession of the original electronic data and has the ability to store evidence using blockchain technology, he/she may upload multiple versions of the electronic data separately to blockchain for preservation. Where a dispute arises, he/she may choose the version in his/her favor, and the other party may not be aware of other versions of the electronic evidence.
3. False consensus. Blockchain technology needs to record the majority opinions of each node into the entire blockchain by a consensus mechanism. If the hacker controls the major computational power of the whole network, it can lead to errors in the majority opinions, resulting in errors in the entire blockchain network.
4. Attacks to the algorithm. Although the hash arithmetic database is very large, its quantity can still be exhausted. With the development of computer technology, huge improvements in computational power will make it easy to attack hash algorithms ruthlessly.
III. How Hangzhou Internet Court Applies the Blockchain Technology
In Jun. 2018, the Hangzhou Internet Court heard the first case nationwide involving blockchain evidence, in which the judge supported the plaintiff's adoption of the blockchain as the form of evidence preservation, and ascertained the relevant facts of infringement pursuant to the evidence stored in the blockchain.
On 18 Sept. 2018, Hangzhou Internet Court launched the first national judicial platform for blockchain evidence, which demonstrated an integral chain of credible evidence developed by courts using blockchain technology.
In addition, the Hangzhou Internet Court also issued the Standards for Electronic Evidence Platforms of Hangzhou Internet Court (杭州互联网法院电子证据平台规范) and the Standards for Judicial Blockchain Platforms of Hangzhou Internet Court (for Trial Implementation) (杭州互联网法院司法区块链平台规范(试行)). The two Standards specify the specifications, and formats of electronic data, the protection and technical specifications of electronic data, specifications of electronic data standard interfaces and judicial application methods as well.
Ⅳ. How Hangzhou Internet Court Examines Blockchain Evidence?
The Hangzhou Internet court issued the Rules of Hangzhou Internet Courts on the Judicial Review of Electronic Evidence in Civil Litigation (杭州互联网法院民事诉讼电子数据证据司法审查细则), which establishes the examination standards for regulating electronic data.
Hangzhou Internet court summarizes the standard as “Three Reviews and Three Observations”(三审查+三观察).
The “Three Reviews” refer to :
1. To review the authenticity of the blockchain evidence. Specifically, it means that the court should examine whether the blockchain evidence is likely to be tampered with in the process of formation, transmission, extraction and display, and to the extent of such possibility.
2. To review the legitimacy of the blockchain evidence. Specifically, it means that the court should examine whether the collection, storage and extraction methods of blockchain evidence comply with the law, and whether they infringe on the legitimate rights and interests of others.
3. To review the relevance of blockchain evidence. Specifically, it means that the court should examine whether there is a substantial connection between the blockchain evidence and the facts to be proved.
The “Three observations” are as follows:
1. To observe the source of electronic data. The blockchain-stored electronic data is divided into two types, chain-generated data, and derivative data. Chain-generated data refer to the electronic data generated and stored directly in the blockchain. Derivative electronic data refers to the electronic data generated in other forms, but whose hash value is uploaded to the blockchain. Blockchain can guarantee the authenticity of chain-generated electronic data as of data generation and that of derivative electronic evidence from the time when it is uploaded to the blockchain, however, it cannot guarantee the authenticity of derivative electronic evidence before it is uploaded to the blockchain.
2. To observe the time of evidence preservation. The preservation time of electronic data is very important for ascertaining the case facts, but it is easy to be tampered with and forged. International time, Internet time, and system time have no binding effect. Time manifested by China's National Time Service Center is the only recognized time with binding effect in China.
3. To observe the verification results. To judge whether the blockchain evidence submitted by the parties is authentic and integral, the Internet Court may match the blockchain evidence with the hash value stored in the server of the judicial blockchain platform. If the electronic data can be repeatedly verified in a specific form, the court can determine that the electronic data generated therefrom is reliable.
V. How Will the Court Apply Blockchain Technology in the Future
1. Share the credibility of electronic data. The Hangzhou Internet Court is promoting the launch of a judicial blockchain alliance nationwide, which can unite administrative organs, courts, notary offices, and judicial appraisal centers at all levels as nodes of the entire judicial blockchain.
2. Reduce the number of disputes. The Hangzhou Internet Court is promoting the courts to use smart contract technology, which means that, on the one hand, the parties’ signing, performance, breach of contract, demanding of contract performance, and other behaviors are recorded in the blockchain in real-time; and on the other hand, the number of disputes may be reduced through the automatic contract performance.
3. Subject the judges to supervision. The behaviors of judges can be recorded in the blockchain. In this way, on the one hand, the information contained in these records concerning trial secrets and the privacy of the parties can be kept confidential, and on the other hand, the data can be accessed by the court, if necessary, to examine whether the judge has acted improperly.