Arbitrating Smart Contract

Arbitrating Smart Contract Disputes: A Comprehensive Approach

/in , /by

Arbitrating Smart Contract Disputes: A Comprehensive Approach

Insights

Arbitrating Smart Contract
Read More

Arbitrating Smart Contract Disputes: A Comprehensive Approach

 
Dec. 20, 2024
 

By Daniel B. Garrie and Judge Gail Andler, Ret.

Smart contracts, self-executing digital agreements encoded on blockchain networks, have gained significant traction in various industries due to their potential to streamline transactions, reduce costs, and enhance transparency. However, as with any contractual arrangement, disputes can arise, necessitating effective dispute resolution mechanisms. Arbitration emerges as a promising approach to resolving smart contract disputes, offering advantages such as efficiency, flexibility, and enforceability across jurisdictions. 

Understanding Smart Contracts

Smart contracts are computer programs that automatically execute predetermined terms and conditions when specific criteria are met. They operate on blockchain technology, a decentralized and distributed digital ledger that records transactions securely and transparently. Key features of smart contracts include self-execution, immutability (once deployed, the code cannot be altered), and transparency (all transactions are visible on the blockchain).

 

Smart contracts have diverse applications, ranging from financial instruments like cryptocurrencies and tokenized assets to supply chain management, real estate transactions, and intellectual property rights management. For example, the Ethereum blockchain has enabled the development of decentralized applications and smart contracts for various use cases, such as decentralized finance, non-fungible tokens, and decentralized autonomous organizations.

 

To illustrate a smart contract, consider a simple transaction between Buyer and Seller for 100 blue widgets.  Traditionally, the parties would execute a paper agreement reading, in part, “Seller shall deliver to Buyer one hundred (100) blue widgets.”  A smart contract for the same transaction would read, “function transferFrom(address _SELLER, address _BUYER, uint256 _100) public returns (bool success) require(_100 <= allowance[_SELLER] [msg.sender]); allowance[_SELLER][msg.sender] -= _100; _transfer(_SELLER, _BUYER, _100); return true”.  In either case, Seller would then gather the inventory of 100 blue widgets, package it securely, and deliver it to Buyer in exchange for an agreed-upon payment stated in a separate clause or code…..

Read the full article here on the Daily Journal

Protect client data

Think Like a Hacker; Plan Like a Lawyer

/in , /by

Think Like a Hacker; Plan Like a Lawyer

Insights

Protect client data
Read More

Think Like a Hacker; Plan Like a Lawyer

 
August 12, 2025
 

By Daniel B. Garrie and Moshe Jacobius

Cybersecurity is a critical concern for all businesses, including small law firms and solo practitioners. While larger firms often have the resources to implement robust cybersecurity measures, smaller firms must navigate these waters with more limited means.
However, being a small firm does not mean being immune from data breaches. According to the

American Bar Association’s 2022 Legal Technology Survey Report, 27% of law firms reported havingexperienced a security breach. This article outlines best practices for incident response planning tailored specifically for legal professionals in small firms, emphasizing practical steps and cost-effective measures. Small law firms are an attractive target for cybersecurity breaches and data theft because much of their information is concentrated and attackers do not need to sift through voluminous information.

Incident response planning is a proactive approach to managing and mitigating the effects of cybersecurity incidents, such as data breaches, ransomware attacks and other cyber threats.
For small law firms, the stakes are high: a single cyber incident can lead to significant financial loss, reputational damage and legal liabilities. Therefore, practitioners’ approach to cybersecurity and incident response should be robust as it is essential for safeguarding your practice and clients’ trust.

Best practices for incident response planning

Conduct a risk assessment

Begin by identifying potential cyber threats and vulnerabilities specific to your practice.
Consider the types of data you handle, such as client information, case files and financial records. Evaluate the likelihood of various threats, including phishing attacks, malware and unauthorized access. You should also be aware of state or federal privacy law requirements that may be applicable to a data security breach as well as reporting requirements. You must also consider the interplay of professional responsibility requirements when a security breach occurs to a law firm.
For example, if your risk assessment identifies that a significant portion of your employees frequently work remotely and access sensitive data from personal devices, you may determine that the risk of a data breach due to a lost or stolen device is high. In this case, implementing strong encryption and remote data wipe capabilities for mobile devices should be a top priority.
A thorough risk assessment helps prioritize resources and focus on the most critical areas. It should be conducted regularly, at least annually or whenever significant changes occur in your firm’s operations or technology environment. Consider hiring a company that employs “white hat hackers” to identify security weaknesses or untrustworthy employees…

eDiscovery and AI in ADR

Mastering eDiscovery and AI in ADR: A Guide for Legal Practitioners

/in , /by

Mastering eDiscovery and AI in ADR: A Guide for Legal Practitioners

Insights

eDiscovery and AI in ADR
Read More

Mastering eDiscovery and AI in ADR: A guide for legal practitioners

 
April 08, 2025
 

By Daniel B. Garrie and Bradford K. Newman

The landscape of pre-trial discovery is rapidly evolving as eDiscovery and artificial intelligence (AI) continue to reshape legal practice. As AI technology becomes increasingly integrated into legal frameworks, legal practitioners who are early in their careers must understand how to navigate these new frontiers, particularly in alternative dispute resolution (ADR) settings. This is not an option, but rather, is part of licensed attorney’s duty of competence. For example, Comment 8 to the ABA Model Rule 1.1, “Duty of Competence,” specifically provides: “To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology….”

Understanding eDiscovery: A necessity for modern legal practice

Electronic discovery, or eDiscovery, is the process of identifying, collecting, and producing electronically stored information (ESI) in litigation and other legal proceedings. The Sedona Conference Glossary: E-Discovery & Digital Information Management (Fifth Edition), 21 Sedona Conf. J. 263 (2020) (last visited: October 15, 2024). ESI encompasses a wide variety of data sources, including emails, social media posts, documents, databases, and more. Given the increasing reliance on digital communication and documentation, eDiscovery has become a crucial element in modern legal practice. Garrie, Newman et al: Uncovering Digital Evidence: A Comprehensive Guide for Legal Professionals in the Digital Era, Springer Nature Switzerland AG (2024), Chapter 6: Digital Forensic Investigations and eDiscovery.

Balancing transparency and efficiency in dispute resolution

While ADR – such as arbitration and mediation – historically involved fewer formal discovery requirements than traditional litigation, the rise of eDiscovery has transformed this process. ADR parties often require the same level of data transparency as in litigation, and eDiscovery plays a pivotal role in facilitating that transparency. For example, in complex cases involving intellectual property or corporate disputes, the discovery of critical documents can make or break a resolution.

In-house counsel

In-House Counsel Pointers For Preserving Atty-Client Privilege

/in , /by

In-House Counsel Pointers For Preserving Atty-Client Privilege

Insights

In-house counsel
Read More

In-House Counsel Pointers For Preserving Atty-Client Privilege

 
February 13, 2025
 

By Daniel B. Garrie 

The attorney-client privilege is a cornerstone of legal practice, designed to foster open and honest communication between clients and their attorneys. However, for in-house counsel, navigating the complexities of this privilege can present significant challenges. Unlike external legal advisers, in-house attorneys often operate at the intersection of legal and business functions, complicating their ability to assert privilege over communications. Recent rulings — such as the U.S. District Court for the Western District of Washington’s September 2024 ruling in Garner v. Amazon.com Inc.,[1] and the U.S. District Court for the Northern District of California’s December ruling in Epic Games Inc. v. Apple Inc.[2] — illustrate the challenge and dispute of attaching attorney-client privilege for in-house attorneys. This article explores the intricate landscape of attorney-client privilege as it pertains to inhouse counsel, examining key considerations such as the definition of the client, the distinction between legal and business advice, and the imperative of confidentiality. Further, it provides practical best practices to help in-house attorneys safeguard their communications and effectively assert their privileges in an increasingly scrutinized corporate environment.

The Elements and Considerations of Attorney-Client Privilege for In-House Counsel

Generally, the attorney-client privilege only protects (1) communications made in confidence; (2) between privileged persons, i.e., the attorney, client, or in some cases, an agent; and (3) for the purpose of obtaining or providing legal assistance for the client.

Who is the client?

The first requirement of attorney-client privilege is that a relationship exists in the first place between an attorney and a client. In the context of in-house counsel, the client is the corporation itself, not the individual employees within it. However, because corporations act through people, a critical question arises: Which individuals within the organization can be considered clients for the purposes of applying the attorney-client privilege? Courts typically utilize two primary tests to define the client in this context. Subject-Matter Test This test allows the privilege to apply if “[t]he communications concern[] matters within the scope of the employees’ corporate duties,” and the employees understand the discussions with counsel occurred so “the corporation could obtain legal advice,” as articulated by the U.S. Supreme Court in its 1981 Upjohn Co. v. U.S. decision.[3] It is especially important to note here that the test is focused on the employee’s Daniel Garrie understanding of the discussions. In-house counsel is responsible for making sure employees understand when the lawyer is providing legal advice for the corporation….

Forensic neutrals

Forensic neutrals are reshaping commercial litigation

/in , /by

Forensic neutrals are reshaping commercial litigation

Insights

Forensic neutrals
Read More

Forensic neutrals are reshaping commercial litigation

 
January 31, 2025
 

By Daniel B. Garrie and Hon. Charles Margines (Ret.) 

In the intricate world of commercial litigation, the stakes are high, and the complexities can be overwhelming. As attorneys, we often find ourselves navigating a labyrinth of legal issues, evidentiary challenges, and procedural intricacies. The challenges have expanded beyond traditional disputes to encompass a vast array of complex, data-driven issues such as deciphering intricate digital trails, understanding technological nuances, and ensuring the integrity of electronic evidence. But what if there was a tool that could streamline the process, making it more efficient and effective? Enter the forensic neutral.1 

The Role of Forensic Neutrals 

At its core, a neutral is an auxiliary judicial officer appointed by the court to assist in specific aspects of litigation. While the concept may sound foreign to some, it has been a cornerstone in the American legal system for decades. The neutral’s role is not to replace the judge or the jury but to enhance their comprehension of the issues, especially in cases that demand specialized knowledge or expertise. 

Federal Rules of Civil Procedure 53(a)(1)(A) empowers a judge to appoint a neutral to (1) perform any duties to which the parties consent; (2) “address pretrial and posttrial matters that cannot be effectively and timely addressed by an available district judge or magistrate judge of the district,” even without party consent; (3) conduct trials and make or recommend findings of fact in non-jury matters, if warranted by some “exceptional condition,” even without party consent; (4) perform accountings or difficult damage computations, again, even without party consent. In state court cases, the applicable law may or may not require consent, or an appellate decision may have resolved whether consent is needed.  

Courts obtain help from neutrals for an array of case issues, including when the case (1) involves a complex, technical, or specialized area of the law; (2) requires heightened and extensive oversight during discovery; or (3) calls for fact-intensive non-jury determinations. Neutrals who are qualified to handle data forensics are unique in that they do both technical and legal work. They have the experience and credentials necessary to assist the court and the parties in understanding, managing, and analyzing electronic data pertinent to the case. Forensic neutrals can help parties understand the technical requirements set forth by a protective order, draft protocols, and monitor compliance with a court order. Moreover, they can perform the technical work themselves. This dual capability can save significant time and money and often results in more efficient conflict resolution. While the exact scope of the neutral’s work can vary depending on the needs of the case, the goal remains the same: to ensure efficiency and compliance from both a technical and legal perspective. 

The Importance of Forensic Neutrals in Today’s Large Commercial Disputes.…

 

Bank Fraud

Banks’ Reactive Approach To Fraud Is No Longer Sufficient

/in , , /by

Banks’ Reactive Approach To Fraud Is No Longer Sufficient

Insights

Bank Fraud
Read More

Banks’ Reactive Approach To Fraud Is No Longer Sufficient

 
January 09, 2025
 

By Daniel B. Garrie and David A. Cass

Banks today face a formidable challenge in combating fraud amid rapid digital transformation. Despite significant investments in security, fraud incidents continue to expose critical vulnerabilities. Traditional approaches, often reactive and fragmented, are no longer sufficient. Banks must transition to proactive, integrated strategies encompassing robust risk management and Asset Liability Management (ALM) to effectively reduce fraud.

One primary issue is the reactive nature of many banks’ fraud prevention efforts. Addressing incidents only after they occur may meet immediate compliance needs but fails to prevent future fraudulent activities, exposing banks to ongoing risks. By embracing predictive analytics and machine learning, banks can transform their approach. Leveraging historical and real-time data allows for identifying potential threats before they materialize. Integrating these technologies within a comprehensive risk management framework enables preemptive actions that protect assets and liabilities. ALM practices are crucial here, as they assess the potential impact of fraud on financial stability and ensure a proactive stance against threats.

Data silos and fragmented departments present another significant challenge. Departments responsible for fraud detection, compliance, cybersecurity, risk management, and ALM often operate in isolation. This lack of cohesion hinders the ability to detect patterns across functions, leading to delayed responses. Fostering data integration and cross-departmental collaboration is essential. Implementing centralized data platforms shared among all relevant departments ensures comprehensive risk visibility. By integrating ALM insights, banks can better understand how fraud impacts their balance sheet and liquidity positions. A coordinated response minimizes reaction times and strengthens the overall risk posture….

Deepfakes in Court

Deepfakes In Court Proceedings: How To Safeguard Evidence

/in , , /by

Deepfakes In Court Proceedings: How To Safeguard Evidence

Insights

Deepfakes in Court
Read More

Deepfakes in Court Proceedings: How To Safeguard Evidence

 
November 18, 2024
 
 

By Daniel B. Garrie and Jennifer Deutsch

Imagine a courtroom where key evidence — a video of the defendant confessing to a crime — is so convincing that the judge and jury have little reason to doubt its authenticity.

The recording plays, showing the defendant detailing the crime in their own voice, with familiar gestures and expressions. The jury is moved, convinced by the video’s clarity and the confidence of what appears to be a genuine confession. A conviction is handed down, seemingly beyond doubt.

Months later, new information surfaces: The video was a deepfake, an AI-crafted fabrication made to resemble the defendant with stunning accuracy. The conviction is overturned, but the damage has been done. The defendant’s life and reputation have suffered irrevocably, public trust in the legal system is shaken, and significant court resources are spent untangling the deception.

This hypothetical is not far-fetched — it’s a near-term risk as deepfake technology advances. The term deepfake — a blend of “deep learning” and “fake” — refers to a sophisticated manipulation of audio, video or images using AI.

By training algorithms on extensive datasets, deepfake technology can create uncannily realistic yet entirely fabricated portrayals, making it increasingly difficult to distinguish fact from fiction.

The pervasive threat of deepfakes has already been shown in other high-stakes environments.

In 2021, cybercriminals deepfaked the voice of an unnamed company’s director, successfully authorizing the fraudulent transfer of $35 million.[1]

In 2022, a manipulated video of Ukrainian President Volodymyr Zelenskyy allegedly surrendering to Russian forces circulated widely online, briefly shaking public trust before it was debunked.[2]

Crafting Effective Privilege Logs for Legal Success

Crafting Effective Privilege Logs for Legal Success

/in , /by

Crafting Effective Privilege Logs for Legal Success

Insights

Crafting Effective Privilege Logs for Legal Success
Read More

Crafting Effective Privilege Logs for Legal Success

 
November 11, 2024
 

By Daniel B. Garrie

 

The process of creating a privilege log has evolved significantly over the past few decades. As former U.S. Magistrate Judge Andrew J. Peck remarked,

When I got on the bench in 1995, the privilege logs in a typical case [were] two to three pages, maybe 50–100 entries. Now the privilege logs are like little novels, and there may be 10,000 or more entries. That is very expensive and is often useless to the other side in figuring out what is or isn’t privileged.[1]

His observation highlights the critical need for well-crafted, efficient privilege logs that serve the needs of all parties in litigation without becoming burdensome or unclear. This article will outline the federal rules guiding privilege logs, explore the different types of privilege logs, and provide best practices to create comprehensive and manageable logs.

Federal Rules Guiding Privilege Logs

The Federal Rules of Civil Procedure (“FRCP”) do not use the term privilege log or otherwise spell out procedures for logging privileged documents. Instead, FRCP 26(b)(5)(A)(ii) requires parties who withhold documents on the grounds of privilege to provide sufficient detail about those documents so the opposing party can assess the privilege claim. Specifically, the rule states that the withholding party must “describe the nature” of the documents, communications, or tangible things withheld “in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim.”

Types of Privilege Logs

The absence of strict procedural guidance leaves much room for interpretation, prompting the emergence of various types of privilege logs tailored to different legal contexts.

A. Traditional Privilege Logs

The traditional privilege log is the most detailed and burdensome form. It requires a line-by-line description of each document, including the author, recipients, date, and a description of the subject matter sufficient to explain the claim of privilege. Traditional logs are often time-consuming and expensive to produce, particularly in large-scale litigation involving thousands of documents. Despite their complexity, they provide the most thorough level of detail, making them common in high-stakes litigation…

Deepfakes

Navigating the Mirage of Deepfakes in Court and Arbitration

/in , /by

Navigating the Mirage of Deepfakes in Court and Arbitration

Insights

Deepfakes
Read More

Navigating the Mirage of Deepfakes in Court and Arbitration

 

October 16, 2024
 
 

By Daniel B. Garrie and Gail A. Andler

The proliferation of sophisticated artificial intelligence (AI) technologies has given rise to a novel and formidable challenge: deep fakes. These hyper-realistic digital fabrications, generated through deep learning algorithms, can convincingly mimic the appearance, voice, and actions of real individuals, often without their consent. While the technology behind deepfakes holds potential for innovation in fields such as entertainment and education, its misuse poses significant threats to the integrity of the legal system. This article explores the nature of deepfakes and the dangers they present in legal contexts.

Understanding Deepfakes

Deepfakes are generated through sophisticated machine learning algorithms, specifically using a subset called generative adversarial networks (GANs). These networks pit two AI algorithms against each other: one generates fake images or videos, while the other attempts to detect the forgery. The result is hyper-realistic videos or audio recordings that can be nearly indistinguishable from genuine material to the untrained eye or ear.

Evidence and Deep Fakes in Legal Proceedings  

The introduction of deep fakes into legal proceedings is a troubling prospect. Imagine scenario where fabricated evidence is so convincing that it sways the outcome of a trial, infringing upon the principles of justice and fairness that underpin the legal system. The Federal Rules of Evidence (FRE) serve as the cornerstone for determining the admissibility of evidence in federal courts. However, the rise of deep fakes introduces complexities that challenge these established rules, particularly in the realms of authenticity, relevance, and the potential for unfair prejudice. The potential for deep fakes to be used as false evidence raises profound questions about the integrity of trials and the reliability of the evidence presented.

Rule 901 of the FRE requires that evidence must be authenticated before…

Cyber Threats Facing Country Clubs

Inside the Clubhouse: The Growing Cyber Threats Facing Country Clubs

/in , , /by

Inside the Clubhouse: The Growing Cyber Threats Facing Country Clubs

Insights

Cyber Threats Facing Country Clubs
Read More

Inside the Clubhouse: The Growing Cyber Threats Facing Country Clubs

 

September 6, 2024
 
 

By Daniel B. Garrie and Jennifer Deutsch

Country clubs have become increasingly attractive targets for cybercriminals. Members entrust these institutions with highly sensitive information, including names, addresses, birthdates, Social Security numbers, and other personal data that can be exploited for identity theft, fraud, and other malicious purposes. Additionally, the financial information stored by these clubs—such as payment details, bank account numbers, and credit card information—is highly valuable on the black market. Cybercriminals can monetize this data through direct theft, unauthorized transactions, or by selling it to other malicious actors. The dual appeal of personal and financial information within a single entity significantly heightens the risk for country clubs, making them prime targets for a wide range of cyberattacks. 

Despite managing valuable data, many clubs may not have the same level of cybersecurity infrastructure and expertise as larger corporations. A 2017 National Club Association survey revealed that only 41% of clubs had conducted a cybersecurity vulnerability assessment within the past year, highlighting a potential gap in preparedness.1 This trend reflects a broader shift in the cybercrime landscape, where attackers are diversifying their targets beyond traditional sectors like finance and healthcare. This article examines the specific cyber threats facing country clubs and outlines measures they can take to enhance their cybersecurity defenses. 

 

Unique Cyber Threats Facing Country Clubs 

Understanding the types of cyber threats that country clubs face is the first step in developing a comprehensive cybersecurity strategy. Some of the most common threats include: 

  1. Phishing: Phishing involves attackers use fraudulent emails, websites, or messages to trick individuals into revealing sensitive information or clicking on malicious links. These attacks often leverage the club’s reputation and members’ trust to deceive individuals into revealing sensitive information or granting unauthorized access. For instance, an attacker might send a fake email appearing to be from club management, requesting members to update their payment information on a fraudulent website.