Tensions in Law, Regulation and Technological Innovation : Recent Cases from the UK Experience

Abstract

The relationship between technological innovation and regulation is frequently portrayed as an unhappy one in which regulation is portrayed as ‘getting in the way’ of scientific and human progress. Despite recognition of the need and value of regulation in order to safeguard against various risks posed by scientific and technological developments, regulation is typically understood as slowing the pace and hindering the potential for socio-economic development. Drawing on three cases from recent UK experience of technological innovation, this paper challenges this conventional narrative in three ways. First, it suggests that legislative authorisation which permits technological innovation is a necessary but not sufficient condition for its successful reception into society. This is vividly illustrated by the recent failed attempt to introduce a national patient record database in England called care.data, demonstrating that the process through which technological innovations is introduced is a matter of considerable importance, particularly when the innovation is driven and undertaken by the state itself. Affected stakeholders and the general community must have meaningful opportunities to determine the scope and content of the proposed technological innovation, particularly when it affects many people in ways that they care deeply about (such as the sharing and use of their medical records), so that transparency, openness and public participation in their development and implementation are vital and indispensible. Secondly, the conventional narrative is based on an assumption that legislative reform is too slow, cumbersome and politically difficult to achieve in order to pave the way for technological innovation. But the recent decision of the British Parliament to introduce legislation to allow human germline genetic modification in the form of mitochondrial transfer aimed at preventing the transmission of serious mitochondrial diseases demonstrates that legislative reform is achievable, even for technological innovations that are ethically sensitive, at least for new techniques which offer the prospect of ameliorating serious and debilitating medical conditions. This case also underlines the importance of openness and transparency to facilitate informed public reflection and debate prior to legislative reform, and suggests that piecemeal incremental reform is more likely to garner public support compared with more ambitious reform that might be more likely to raise public suspicion and mistrust. Thirdly, rather than obstructing technological innovation, legal regulation and the activities of regulators might actively foster innovation and investment, evidenced by on-going efforts by UK financial regulators, particularly those of the Financial Conduct Authority (FCA), to establish the UK as the global leader in FinTech. Recent initiatives by the UK government and UK financial regulators adopt a pro-active, strategic role, seeking to position regulation and regulators as supporters of innovation. This departs from the traditional, reactive approach of regulators that characterizes traditional enforcement work which responds to suspected violations of regulatory standards after they occur. Hence the FCA’s Project Innovate involves attempts by the financial regulator to operate in a pro-active non-conventional, flexible and agile way rather than through conventional, established legal protection regimes to allow for experimentation in tech innovation and new business models. What remains to be seen, of course, is how successful this strategy will be and – in particular – whether such a strategy can be maintained as the industry develops and consumer harm invariably occurs.