In our previous post, we explained why the online electronic data preservation business is emerging in China. In this post, we will continue to describe in detail how the business is run, what problems exist and how it will develop in the future.
I. How does the company run its business of online electronic data preservation?
At present, Chinese companies engaged in online electronic data preservation mainly adopt the following three schemes:
1. Scheme One: Automatic data acquisition by a computer program, combined with notarization or forensic examination
This scheme includes the following steps: automatic acquisition of online electronic data via computer software; the real-time transmission of data through dedicated network communication lines to servers preset in notary offices or forensic examination institutions for storage; and finally notarization of these electronic data by notary offices, or examination by a forensic examination institution.
In this way, not only can we automatically, timely and quickly complete the extraction and storage of various online electronic data in batches, but also can transform electronic data into more easily recognized evidence by judges through notarization or forensic examination, such as notarial certificates or forensic expert opinions. What is more attractive to users is that it is much cheaper to notarize or examine the electronic data already stored locally. This is the first scheme adopted by companies early engaged in online electronic data preservation, and it is also the most commonly-used scheme at present.
2. Scheme Two: data are automatically acquired by a computer program and stored by a neutral third-party in the form of digital signature
This scheme includes the following steps: automatic acquisition of electronic data through computer software, but afterwards, the data will not be transmitted to the notary office or forensic examination institution, but will be processed into digital signatures containing time stamps, hash value (data fingerprint) and other information, and such digital signatures and acquired electronic data will be stored in the company’s own servers.
This practice does not rely on the credibility of notarization or forensic examination, but instead uses digital signature technology and the neutrality of the data preservation institution itself to convince judges that the acquired electronic data are unmodified. Because the cost of a digital signature is much lower than that of notarization and forensic examination, this scheme has an obvious price advantage.
3. Scheme Three: Automatic data acquisition by a computer program and blockchain technology
This scheme includes the following steps: after the electronic data are automatically acquired by the program, the digital signature is made immediately from the electronic data, and the digital signature information is stored in the specially-established blockchain for information storage.
Blockchains have the characteristics of decentralization and immutability. That is, once the information is stored in the blockchain, there is no need to require a neutral third-party to guarantee the reliability of the information. The blockchain itself can ensure that the information will not be altered after storage.
With this scheme, customers no longer need a neutral third-party to store data, and they can show the reliability of electronic data to the court using more trusted blockchain technology.
II. What is the Chinese courts’ current view towards online electronic data preservation?
At present, in most of the decided cases involving the use of online electronic data preservation service, the courts have adopted the electronic data evidence obtained and submitted by the parties via such service. These cases are also used as the best commercial advertising for companies providing online electronic data preservation service in China. It seems plausible, that Chinese courts show a positive attitude towards such method of preservation. But is that the truth?
If you read these judgments carefully, you will find that they share a common feature: the other party has not raised any objection to the subject producing the evidence, the method, and process of taking evidence, and the relevant electronic evidence. In China’s case trials on civil and commercial disputes, the facts acknowledged by the parties need not be proved by evidence. Therefore, it is difficult to judge from these cases whether the reason for the court’s admission of the evidence is the recognition of this method or the acknowledgments of the parties.
In addition, there are a few cases in which the other party raised an objection to the evidence. In these cases, the judges hardly admitted the electronic data. From these judgments, the reasons for the inadmissibility of evidence are be summarized as follows:
First, notaries and examiners are not involved in the process of electronic data extraction in person, so the legal effect of related notarization and forensic examination can not be recognized.
For electronic data preservation combined with notarization and forensic examination, notaries or examiners only witness the electronic data automatically collected and presented to them by the system, and they have no idea how the data are collected from the Internet, and whether such acquisition process is scientific and reliable. In other words, notaries and appraisers can only describe what electronic data they actually saw, but they can’t judge whether the electronic data had been corrupted before presented to them.
Secondly, companies for data preservation do not have the legal qualification to extract electronic data, so the competence of the electronic data they extract and store cannot be recognized – this corresponds to the second scheme mentioned above.
Under the existing legal framework in China, only notary offices and forensic examination institutions are the eligible institutions to preserve electronic data as explicitly stipulated by law. They are granted qualifications and managed by judicial administrative organs (i.e., Department of Justice); however, it is not clearly stipulated by law whether other neutral third-party institutions have such qualifications.
For the majority of Chinese judges, in order to avoid their unnecessary liabilities, they will only admit the evidence obtained by the way specified by law, but refuse to admit the evidence obtained by other ways as far as possible. Therefore, although the companies for data preservation claim to be “neutral third-party institutions”, many courts still do not recognize the legal effect of their data preservation on the grounds that they do not have legal qualifications.
Thirdly, neither the automatic acquisition procedure of electronic data nor the blockchain technology has enough evidence to prove its scientific basis and reliability. Therefore, the legal effect of extracting and preserving evidence using these technologies shall not be recognized.
The vast majority of judges are laymen of information technology. They can not judge technical problems with their own knowledge or experience. Therefore, judges customarily transfer the “jurisdiction” of technical issues to forensic experts, or allow the parties to prove whether such technology meets a national or industrial standard that has been implemented. If a technical method has not been judicially examined and cannot be explained what technical standards it meets, judges will not easily accept such evidence obtained through these technologies for the sake of avoiding their own liabilities.
III. Development tendency of online electronic data preservation
China is entering the era of data explosion, and it is the general trend that a large amount of electronic data are flooded into the courts. Both enterprises and individuals are eager for electronic data preservation to be more efficient, intelligent and inexpensive. Therefore, legal tech services, such as online electronic data preservation have a bright prospect. The key to the future development of this industry is the legal effect of online electronic data preservation.
The current conservative and rigid attitude of Chinese judges towards electronic data is an important factor affecting the legal effect of online electronic data preservation. Therefore, in September 2018, the Supreme People’s Court (the SPC) promulgated and implemented “Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Cases by Internet Courts” (最高人民法院关于互联网法院审理案件若干问题的规定), which clarifies that “Internet Courts shall conduct an examination to judge the authenticity of the processes during which the electronic data are generated, collected, stored and transmitted”. In other words, it requires judges not to deny the competence of electronic data just because of lacking notarization, forensic examination or legal qualifications, etc..
However, the more important factor that affects the legal effect of electronic data preservation is that the existing schemes can not effectively show the whole process of electronic data extraction and preservation is reliable. Especially for the proof of data sources, the existing schemes can not prove exactly where the electronic data originates from. Therefore, the company engaged in online electronic data preservation should continue to optimize its scheme and the whole business logic, in order to ensure the legal effect of its data preservation service.
Contributor: Xiaokai LI(李小恺)
Lecturer, China University of Political Science and Law
Dr. Li’s research focus areas are evidence law, electronic data evidence, material evidence technology, forensic science, and cybercrime investigation.
He holds a bachelor’s degree in physics from Nanjing University, a master’s degree in material evidence technology from China University of Political Science and Law, and a Ph.D. in evidence law. He was a visiting scholar at the University of California, Davis School of Law.
If you would like to discuss with us about the post, or share your views and suggestions, please contact Dr. Xiaokai LI (email@example.com).
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Yuan Yanchao also contributes to the post.