Law and other paradoxes: An unorthodox (and accidental) academic

The following is an edited version of Professor Alex Sims' inaugural lecture:

I went to Michael Park School, which is a Steiner School in Auckland. It was radically different to mainstream schools. We called our teachers by their first names, had no uniforms, and the education was different; even the buildings were different.

One drawback to Michael Park at that time was that there were no exams, and we didn’t do Bursary. Our work was internally assessed, with only the occasional test.

I was that bright kid who found school easy and couldn’t be bothered working, so my marks weren’t that good. Because there was no Bursary, we had to apply early for university entrance.

By seventh form, I was over school, so I didn’t bother applying for university. However, when the new year rolled around, I decided I wanted to attend the University of Auckland. But I wasn’t admitted because I hadn’t done Bursary and had poor marks.

So, I went overseas for two years, first to Sydney and then to London, before returning to New Zealand to study law at Otago.

Why did I decide to study law? I think it was for three reasons.

First, I’d seen lots of legal dramas and law looked interesting.

Second, El Vino, on Fleet Street where I worked in London, was near the Temple and the Royal Courts of Justice, and most of El Vino’s customers were barristers and other lawyers.

Third, another employee at El Vino was a New Zealand lawyer on her OE and she made the law sound interesting.

In hindsight, I should have changed degrees early. In my first Otago tutorial, after reading the required cases, I said to the tutor that it was obvious the judges were just moving the goalposts around. I felt like they knew the outcome they wanted and were manufacturing it. But I kept going with law even though I knew it was a farce.

After completing my LLB, I returned to London for another two years, this time with my partner, whom I had met at Otago. Some 30 years later, we are still together with two children, both students at different New Zealand universities.

Returning to New Zealand, I did law professionals and then a Master of Commercial Law in the Department of Commercial Law at the University of Auckland. I didn’t intend to be an academic, and was looking for a position as a lawyer in Auckland when the head of the department offered me a one-year fixed-term contract as a lecturer.

I started in January 2000 and I’m still here over twenty years later.

My research started with intellectual property (IP) law, focusing mainly on limiting copyright law.

A paradox in this area is that too much IP protection is counterproductive, as it stifles creativity. For example, blockchain technology has developed as fast as it has because it wasn’t protected by IP rights.

The first copyright statute in the UK, The 1709 Statute of Anne, came about because book publishers argued for it, not the authors. Indeed, artists now make money through artwork non-fungible tokens (NFTs) without copyright protection—another paradox for those who think IP rights are the solution.

Early in my academic career, I was advised that I should have a second area of research, and I settled on consumer law, with unfair contract terms as one of the focus areas.

Another paradox: while we have an unfair contract terms law in New Zealand, if you enter into a contract with such a term, you can’t do anything about it.

You can go to the Commerce Commission and ask it to do something. But, as the Commerce Commission is extremely unlikely to do anything, you’re stuck with that unfair contract term.

What is an unfair contract term? There are rules, and it depends on the facts. The following, for example, would be unfair:

• A term in a gym contract that says that even if the gym were to move location up to 12km away, you would still have to pay the membership fee.
• A term in a residential alarm contract that says you must give up to 36 months’ notice to terminate it.

To test this theory, I had a summer scholarship student analyse over 100 different online contacts from NZ businesses three months before the unfair contract terms law was enacted.

The analysis showed that all the contracts contained unfair contract terms, with many containing a lot, which is why a law was needed.

Nine months after the law came into effect, we collected the same businesses’ latest contracts. If the unfair contract term law was effective, we should have seen none, or very few, unfair contract terms.

Unfortunately, my hypothesis was largely proven: the unfair contract terms had been reduced by only 10 percent, and all the contracts still contained such terms.

The Ministry of Business, Innovation and Employment (MBIE) likely had concerns over the study because it painted NZ businesses in a poor light, and MBIE commissioned another study.

The contracts from the first study were compared to the latest contracts from the same businesses. The second study found the first study’s analysis was correct.

So, had the number of unfair contracts reduced, stayed the same, or increased?

Let’s do a thought experiment. A business hears about the unfair contract terms law (there was considerable media coverage about it) but realises its customers can’t challenge any unfair contract terms, and the government agency tasked with enforcement is barely enforcing the law.

An ethical business would follow the law.

But, the reality is that most businesses don’t act ethically; indeed, the number of unfair contract terms had increased from the first study.

My third line of research is blockchain. In May 2016, I was preparing a grant application for mobile payments with a colleague. While working on the grant application, I listened to two podcasts on blockchain, Ethereum and smart contracts.

My head literally exploded, and it was like opening a door to a parallel universe. I had heard about Bitcoin before but had dismissed it as weird internet money.

I convinced my colleague that instead of mobile payments, we needed to look at cryptocurrencies. I knew nothing about banking, finance or anything about cryptocurrencies or blockchain at that time.

The report we wrote from that project opened many doors. Most of my research since then has been on blockchain, even though many others in academia thought it was unwise to change my research areas.

Since then, I’ve done plenty of other things in the blockchain space. Including acting as one of two independent advisers to Parliament’s Finance and Expenditure Select Committee’s Inquiry into cryptocurrencies. I also undertook a very belated PhD on Decentralised Autonomous Organisations (DAOs).

Of course, I made things difficult for myself as my PhD is not confined to law - there is far more economics in the thesis than law (and I’ve never formally studied economics). Plus, the area of DAOs (Decentralised Autonomous Organisations) was changing rapidly as I was researching and writing.

Another paradox: Why are people prepared to pay significant sums of money for digital files that anyone can copy with a right mouse click?

Before answering this question, some background about perceptions of value is needed. People are irrational. For example, a rare guitar made in the 1960s can cost $20,000. Yet, someone will pay millions of dollars for the same make and model of guitar made in the same year. Why? Because a famous person owned the second guitar, so ‘magically’ one guitar is valued more than the other.

Most humans have a desire to own things and to display their ownership. Consider artwork and non-fungible tokens (NFTs); despite others being able to copy the digital image associated with the NFT, the ‘owner’ can prove ownership. This is enough for some people to provide them with value.

Tech is a common theme in IP law, consumer, and blockchain. Yet, a deeper theme is human flourishing. But unfortunately, tech is making many things worse. For example, social media is harming mental health, particularly that of young people. People aren’t going out and socialising—the Metaverse is not a substitute for real life, not to mention the issues that can arise from people being inactive and inside all day.

Also, what drew me to blockchain in the first place - the ability to enforce rules, is now what worries me, and I know I’m not alone in this concern. For example, new forms of money and payment are fine, especially if they can be used in smart contracts. But if people have no choice regarding the money they can use and how they can use it, that’s a problem.

In the future, imagine if you wanted to purchase a plane ticket but were prevented from doing so. For example, because you exceeded your carbon allowance for the year, or you hadn't acted as well as you could.