Ireland must move to adopt appropriate e-business law before EU stakes its claim

The legal consensus internationally has been that US laws have set standards for e-business, with Europe trailing behind. Legal figures believe the Government here needs to tackle the issue now to preserve Irish interests

Lawyers and judges wise in the ways of digital business may be an important ingredient in giving the Republic a competitive edge in the future.

As the European Union expands and the State has gradually lost some of its claims to be one of Europe's low-cost locations for business, the Republic needs to look for other ways to continue to "move up the value chain from a manufacturing country to a knowledge-based economy", says Accenture e-business consultant Mr Seamus Mulconry.

He believes a legislative and judicial environment that demonstrates a sound knowledge of business - especially the particular legal confusions and concerns of companies that create or handle information electronically - will serve to attract business, just as grants and low operating costs did in the past.

"Countries will increasingly legislate for competitive advantage," he says.

He points to Delaware state in the US, which has successfully upped its attractiveness for businesses.

"Delaware brought in simple, straightforward legislation, and businesses know where they stand."

California has also consistently brought in accommodating digital business laws, always keeping one eye on its massive economic engine in Silicon Valley.

The Republic has already taken an initial step in this direction, with the E-Commerce Act passed in 2000. The light regulatory approach taken in the Act has been seen internationally as "best of breed", claims Mr Mulconry.

Mr Paul Lambert, a member of the information technology law group at Matheson, Ormsby Prentice agrees.

"The recent E-Commerce Act showed we do have the capability of showing we're a leading light for bringing about a knowledge-based society in Europe," he says.

Such pieces of legislation have a significant public relations effect internationally, "where businesses see we understand these issues", believes Mr Mulconry.

However, he would like to see the State move more actively to develop a solid digital business legislative environment, rather than depending on piecemeal legislation.

"We need the environment that is closest in Europe to the US model, so that we're ahead of Europe."

The general legal consensus internationally has been that US laws have set the standard for e-business, with Europe trailing. Lawyers say that some proposed EU legislation in crucial areas of e-business - those encompassing intellectual property, patents and copyright, VAT, and electronic signatures, for example - have had business advocates lobbying vigorously to change key elements they feared would place European businesses at a severe disadvantage.

The potential for EU e-business legislation to be passed that could override the Republic's own - to the State's disadvantage - is yet another reason Mr Mulconry feels the Government and judiciary should be focusing on this issue now.

"First of all, we can influence EU legislation and directives by adopting the best legislation in the area before the EU starts looking at the issue," he says. "Typically, the EU will take good legislation in other states as the lead."

The Republic should also take "a very strategic approach toward implementing EU legislation", he says. "Typically, we have taken a very direct approach but it is not necessary to adopt it directly, point by point. There's always some 'wiggle' room. We need to tweak it to suit an Irish understanding of business needs."

More broadly, he believes the State needs to take an overarching perspective on e-business to co- ordinate its approach. On some levels, this is beginning to happen. For example, within recent months the Taoiseach's office has set up two high-level internal committees comprising senior civil servants, one on telecommunications and one on e-business.

But critical pieces of e-business legislation can easily fall between the cracks. "The Communications Bill [which addresses many telecommunications regulatory issues, but may not be passed in remaining Dáil time] is a good example. We need to have a mechanism to pick out other pieces of legislation that are essential to e-business and make sure they go through," he says.

The gush of complex legislation coming out of Brussels also needs greater civil service resources, he believes.

However, "what would really give Ireland real competitive advantage is if we can develop an area of expertise in e-business areas across the judiciary", he says. "Then you build up, over time, an area of competence that is very hard for other countries to copy."

Businesses locate in a region because of a good legislative climate, he says. They would rather have issues arbitrated in a knowledgeable court than one with little background in areas of concern to them.

Britain, for example, is widely recognised as having courts with deep expertise in intellectual property law. According to Mr Lambert, this came about because a small group of judges have become highly trained in this complex area.

Mr Mulconry fears that a lack of legislative competence across digital law will actually erode the State's chances of remaining economically competitive in e-business as the world emerges from recession.

Mr Mulconry suggests that obvious legislative specialties for the Republic would be biotechnology law, given the weight of pharma companies here and the growing interest in the area, and digital content management, because content production is already a national strength and it dovetails with the Dublin Digital Hub project.

But Mr Lambert is not certain that a country can make a national decision to grow legislative expertise in a given area of law. He says there have been discussions in the EU about possibly making a single country a mediation centre for consumer disputes over online transactions.

The EU Commissioner from the Republic, Mr David Byrne, has taken a strong interest in establishing a pan-European approach of some kind.

Legislative expertise tends to emerge because a base of companies are already located in a region, as happened in Silicon Valley, he says.

But because the State already has a wide range of indigenous and multinational companies here, "there is a great existing expertise in IT and digital law" among lawyers and judges, he says.

The Judicial Studies Institute has been offering private seminars in digital law "to bring judges up to speed" and publishes a journal covering aspects of digital law. Mr Lambert says several judges are already taking a strong interest in the area, citing Mrs Justice Susan Denham in particular.

But the area is so new that few cases have been tried, leaving little case law to set precedents and structure judgments, he says, a problem that will only be remedied by time. Still, he says, "once the legislative infrastructure is there, lawyers are very capable of adapting and tooling up as they need to".