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Virtual Reality

Futurists were once convinced that, in the 21st century, all courtrooms would be modern, wired and efficient buildings. Now the once prohibitive costs have fallen dramatically, and the idea of ‘e-courts’ is no longer unrealistic. “Where are our jetpacks?” ask Mark Dillion and Phillip Amann

In the mid 1990s, when commentators first started to discuss technology in the courts in earnest, the impression given was that the dernise of paper records imminent, to be replaced by electronic records. The term ‘e-court’ became fashionable, and reformists and futurists were convinced that, by the beginning of the new century, all courtrooms would be modern, wired and efficient buildings. In Britain, Richard Susskind, IT adviser to the current Lord Chief Justice of England , even published a book called The End of Lawyers?, in which he predicted that court users would be transformed by the use of technology.

When the Bloody Sunday Inquiry opened its public hearings in Derry in 2000, the future had arrived. This was an e-court in every sense of the word. The use of technology received a huge amount of press coverage, and judges from other courts were given tours and demonstrations of the future at work.

Today, the concept is less often written about, and the ‘e-court’ appears to have slipped from the contemporary legal lexicon. For most of us, the new model court never materialized , and even though a paperless courtroom concept is contained in the Courts Service’s strategic ICT plan, it is unlikely to materialize in the near term because of fiscal tightening in all areas of the public service.

While the vision and the reality were somehow misaligned, it does not mean we should give up hope. The costs that were once prohibitive have dropped dramatically, and the reality of e-courts nationally, in the medium term, is longer unrealistic.

The matrix

The term e-court is an abbreviation of the term ‘electronic court’ and, although sometimes defined as a virtual web –based court, the most common usage refers to a physical courtroom with technology that allows proceedings to operate without the use of paper records -from filings, to the issuing of judgments, and the electronic disclosure and presentation of evidence.

For many, an e-court is understood to be the use of videoconferencing, but while an e-court may have this facility, it is insufficient alone to transform a court to an e- court.

Typically, an e-court should include all of the following :

*A ‘Virtual’, web based courthouse that provides 24/7 online access to court services,
*Online access to relevant records and information, such as court calendars to all parties,
* A modern courtroom that offers audio and video capabilities, with the ability to allow for the electronic presentation of evidence and finally,

The capability to upload and present evidence in an electronic format.

The International Criminal Court (ICC) recently celebrated its tenth anniversary. It is a treaty based tribunal established to investigate and try international crimes, such as war crimes, crimes against humanity, and genocide. It is a permanent court and is a different from the ad boc tribunals established to try the crimes committed in the former Yugoslavia and Rwanda. The UN’s International Court of Justice is also based in The Hague.

Disclosure

In our context, what is special about the ICC is that its courtrooms are e-courts supports the e-court model .The courtrooms are fitted with state –of-the-art technology. In addition to each participant having access to email, there is an electronic evidence presentation system in place. When a witness needs to mark an exhibit, this is done electronically, saved and stored with his /her testimony .Proceeding s are captured on video, using several cameras operate by technicians, and broadcast via the web. They are also equipped for capturing electronic transcripts in real time and have full interpretation services. This is important, because several languages may be spoken in the same hearing. An e-court protocol determines how analyse how the process works. When new situation arise, they are discussed in this forum and practical solutions can be agreed upon. Parties, including representatives of the defence and victims, feel they have an input on any changes, which is an important element in getting buy-in and user acceptance. While the ICC functions differently to the national courts, lessons can be learned transferred to other courts. But first les us look at when it might be viable to use this e-court model.

FAST FACT

Typically, an e-court should include a ‘virtual ‘, web-based courthouse that provides 24/7 online access to services, as well as. Online access to relevant records and information, such as court calendars to all parties. A modern courtroom that offers audio and video capabilities, with the ability to allow for the electronic presentation of evidence and finally.

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The authors, who have both worked in this type of environment for a long time, are supporters of the concept of e-courts, generally.

However, it is important to acknowledge that the organizational, technical and human resources required to design, implement and support the functioning of an e-court are considerable. The infrastructure is expensive to install and manage and becomes obsolete quickly. Another factor is the number of documents used in the case. The ICC took a policy decision at its inception that “in proceedings before the court, evidence ….shall be presented in electronic from whenever possible” – perhaps anticipating that they would be dealing with large volumes of evidence. However, even in cases with a small volume of electronically stored information, the e-court is always used. This is largely because the infrastructure is in place and the users-the judges, the prosecution and the registry – are familiar with and trust the system. Generally speaking, however, the larger the volume of documentary evidence, the more efficient it becomes to present and mange documents in an electronic format.

The question to be addressed is: what is the tipping point -100 documents? 1,000? 15,000?. This is a difficult question to answer, and the reality is that it is more intuitive than scientific. It was often said about the Bloody Sunday Inquiry that technology reduced the time spent in oral hearings by a third. Althought this figure is not based on any empirical analysis, it reflects the perception that, in big cases –that is to say, cases with a large volume of documentary evidence technology can spent up oral hearings and therefore reduce costs. We mention the Bloody Sunday Inquiry because it is a good model for when it was useful to use the e- court model. There were multiple parties involved during the oral hearings, a need to make the proceedings accessible to a wider audience, and a large number of documents. In the United States it is often used in white –collar criminal cases and civil cases involving blanks, pharmaceutical and energy companies. In fact, there is a growing body of knowledge internationally related to developing and implementing e-courts. Last but not least, the nature of the evidence collected also plays an important role in the decision. Since the volume of evidence that is electronic in nature is increasing, there is a need to adapt the infrastructure to process it efficiently that is, electronically.

The 13th floor

Will we see e-courts in Ireland? In short, the answer is yes, although it may take some time. As previously mentioned, the Courts Service is already aware of the concept and, consequently, it forms part of their current strategic goal to see how technology can positively affect the administration of the courts. In addition to offering a remedy to ‘big data’ technology will play a significant role in streamlining, standardizings, and automatically judicial procedures. This can reduce the time of proceedings, lower the costs in the mid and long term, and help increase the quality of decisions through improved access to information, increased transparency and accuracy. The fact that an increasing amount of evidence will be created primarily in electronic form is another reason for the necessity to have e-courts in Ireland, if we are to process such cases in a timely, economical and effective manner. There are numerous examples in other common law jurisdictions, especially Australia and the United States, of the model working well. Planners and policymakers in this country will not be obliged to re –invent the process. Governments are generally more constrained than industry in investing in development, but inevitably are forced to develop. Lawyers too are often accused of being conservative and slow to change their habits. However, now that support and back –office staff in the courts as well as in law firms are embracing IT developments, it is only a matter of time before it gets inside the courtroom. How soon it becomes a reality will largely depend on the emergence of someone or some group to champion the cause.

Minority report

What has changed in the decade since the Bloody Sunday Inquiry is that increased availability and use of (mobile) communication technologies and cheaper hardware costs have made the e-court more accessible to users and, in theory, the public. Any new developments to the physical infrastructure of our courts cannot ignore this. Lawyers need to appreciate that the technology that exists in society is going to have an increasing impact on the nature of trials, and they will need to be able to comprehend this technology in order to litigate effectively and to present evidence in an appropriate form. The technical challenges that come with the increased use of networked and mobile devices, but also the increased use of cloud storage solutions, will make prosecutions and litigation difficult without a modern judicial infrastructure capable of examining the data/evidence. Therefore, the main driver of changes will be the need to react to a changing world. Costs will be the driven down and already we are seeing the emergence of open-source solutions that are very effective. We believe that creating secure, easy-to use, and efficient web-based courthouses and incentivizing users to bring their own device to the courtroom could be a viable and efficient approach in implementing e-courts in this country. Pushing some of the costs to the users can be justified by the benefit gained. Finally, any new systems introduced to the courts must meet the highest standards in terms of integrity, security and reliability to have the trust of all parties. The design, development and implementation will require effective change management, particularly senior level support to manage all stakeholders and guide the project to success. Given the rapidly evolving nature of technology, an e-court must be capable of growth and development. Moreover, it should be compatible with the technology used by the parties and should be standardized throughout the entire country.

Credit Where It’s Due

The Credit Union and Cooperation with Overseas Regulators Act 2012 sets out substantive changes in the regulation and compliance, governance and restructuring of Ireland’s credit unions. Claire Moran looks at things differently.

It is undeniable that the credit union sector in Ireland has been subjected to considerable upheaval in recent times. The keenly anticipated work of the Government-appointed Commission on Credit unions manifested itself in the final report of the commission in April. This report sets out wide-ranging recommendations to change the way in which credit unions are regulated and governed – both internally and externally.

It was on foot of this report that the Credit Union and Cooperation with Overseas Regulators Act 2012, a landmark piece of legislation setting out substantive changes in the areas of regulation and compliance, governance and restructuring came into being. When one considers also the developments brought about by the Central Bank’s proposed fitness and probity regime and the Personal Insolvency Act 2012, and it is clear that the challenges now faced by the credit union sector are great and plentiful.

Tiered regulation

The act has introduced measures for the regulation of credit unions on a basis proportionate to their asset value. In a move broadly welcomed by credit unions, the act provides for ‘tiered’ regulation and specifically states that, in making regulations under the act, the Central Bank shall have regard to the need to ensure that the requirements imposed by the new regulations are effective and proportionate to the nature, scale and complexity of the credit union, or the category of credit union to which the regulations apply. To this end, the Central bank has conducted nationwide exercise of visiting credit unions to assess the risk categories into which they fall.

These ‘probability, risk and impact system’ known as PRISM inspections, have resulted in the compilation of a centralized data base by which credit unions will be regulated. While, in the past, some elements within the sector were strongly opposed to tighter regulation, it is clear that opposition is no longer an option, with hundreds of thousands of people and small businesses dependent on credit unions for access to cheap credit.

Sophisticated model

The act has introduced increased regulatory requirements on credit unions and has effectively introduced a sophisticated compliance model. This model is designed to ensure that each credit union adopts a compliance programme. Each credit union must also implement policies, procedures, systems and plans to monitor compliance on an ongoing basis, including requirements under all legal and regulatory requirements.

This programme is to be overseen by a compliance officer, who must be appointed by the board of directors and who must have the necessary authority and resources to manage the compliance programme. The intention of the Central Bank to police the new regulations has been made clear-shortly after the enactment of the Credit Union Bill in December 2012, a Dublin-based credit union was fined €21,000 for a breach of anti-money-laundering regulations. Reporting requirements have also increased. Credit unions will be required to submit an annual compliance statement to the Central Bank certifying their compliance within two months of their financial year-end, or within such other period as the regulator may decide. Credit unions are further required to develop and maintain a risk-management system and controls to allow it to identify, assess, measure and report risks to which it is or might be exposed. A risk-management officer is to be appointed in each credit union to oversee this function.

Reporting lines

Clear organisationl structures with well- defined, transparent and consistent reporting lines and governance arrangements will be required in order to ensure that there is effective oversight of the activities of the credit union. As with the regulation of credit unions, the governance arrangements will take into account the nature, scale and complexity of the business being conducted by the credit union.

In line with good governance standards, credit unions will be required to document in writing their governance arrangements, setting out the roles, responsibilities and accountabilities of each officer. They will be requirements will pose quite a challenge for credit unions, where previously an informal approach may often have been taken to such matters.

A policy is to be drown up for identifying, managing and resolving conflicts of interest, which will apply to all officers of a credit union. There will be an increased responsibility for each officer of the credit union to ensure that no conflict of interests and the interests of the credit union, and also in terms of declaring his or her own interests to the board.

Fitness and probity

The Central Bank has also launched a consultation process with respect to a proposed fitness-and-probity regime. It is planned to introduce the scheme from July 2013 for credit unions with assets of greater than €10 million. Smaller credit unions will be afforded an additional grace period and will have to comply two years later.

The implementation of these standards for credit unions will ensure that members have confidence that those individuals holding senior and board positions in credit unions can demonstrate that they are competent, capable, acting honestly, ethically and with integrity, and are financially sound. The introduction of this fitness-and-probity regime complements the governance framework brought about by act. Ultimately, the regime will involve the Central Bank designating certain job functions as ‘pre-approval controlled functions’ (PCF), where those positions are of such a nature that the people occupying them would exercise a significant influence over the affairs of the credit union.

The Central Bank may then examine the proposed appointment of any individual to a PCF to ensure that they are fit and proper to discharge their responsibilities. In the event that the Central Bank is not satisfied, then the proposed appointment could be refused.

The regime will require increased reporting to the Central Bank on the part of the credit union and its cooperation with it. Credit unions will be expected to conduct extensive due diligence to assess the fitness and probity of candidates to ensure that they meet the new standards – and will continue to meet the standards on an ongoing basis.

Reserve requirements

The final report of the Commission on Credit Unions established that 51 of the country’s 403 credit unions are failing to meet the requirement that their reserves exceed 10% of their assets. Of these, 25 are seriously undercapitalised.

In addition to those 51 credit unions that fail to meet the minimum reserve requirements, a further 50 are reckoned not to be strong enough to survive on their OWN. With this in mind, the act has provided for the establishment of the Credit Union Restructuring Board (REBO). A statutory body, REBO is expected to be in place for three years or more with a view to overseeing and assisting in any mergers or transfer of engagements between credit unions.

REBO will initially encourage credit unions to put forward their own proposals as to how to move forward. There is no denying, however, the steel within the velvet glove here-should these proposals not be accepted as viable, REBO itself can then act in pairing credit unions together in a merger, or a ‘transfer of engagements’ situation. The funding for this restructuring will be provided, in part, by the Credit Union Fund which has been established for this purpose and for the purpose of meeting the costs and expenses of REBO itself.

Credit unions shall contribute to the fund by paying a levy, the level of which will very in accordance with the capacity of the credit union to pay and the nature, scale, risk and complexity of the business of each individual credit union. The fund is also at the disposal of a newly appointed Stabilisation Committee to provide financial support to credit unions that are not meeting their regulatory reserve requirements, but that are, in the opinion of the Central Bank, viable credit unions.

Hard-hitting legislation

The Credit Union Commission has predicted that the personal insolvency legislation will hit credit unions hard and will add further to the worsening of the financial position of the sector. The provisions of the legislation will affect union members at every end of the spectrum, ranging from those with borrowings of less than € 20,000 who will be able to apply for debt-relief certificates allowing for the write-off of their debt, subject to a three-year supervision period – to those with secured dent of up to €3 million and unsecured debt up to an unlimited amount, who may be entitled to secure a settlement arrangement with their creditors.

The report of the commission highlighted that loan arrears across the sector collectively stand at €1 billion and that credit unions have had to put aside €801 million to provide for bad debts. The Credit Union Development Association, headed up by voiced its concerns that the impact of the personal insolvency legislation could be such that it will deter credit unions from lending to those who are financially excluded by the banks – and may potentially lead to the emergence of widespread unregulated moneylending. The Irish League of Credit Unions has also expressed the view that the legislation is weighted against the sector.

The full impact of these new measures for reform in the sector remain to be seen. Despite an increased enthusiasm by those spearheading the need for reform within credit union circles, it is clear, however, that never before have boards of directors and managers of credit unions faced such a challenge in progressing and securing the future of their credit unions. The question is, can the bridge be built between the sector’s volunteer ethos and the need to bring the sector into line with the professional financial services establishment?