Q 6. Tell us more about this TrustMediary concept. What is it? How does it work? As I understand, I would be free to choose this entity, which is kind of Jetsons-like, right? Who would these entities be and where would they come from?
A. Yes, you could choose. Like in a real marketplace. What a novel concept.
Anyone could be a TrustMediary. As long as they opt into the duties of serving your interests.
Think of institutions of trust in your life today. Maybe a newspaper. A certain website. A retailer. A bank. An ISP. A small business. A library. A union.
The point is, you would choose, based on your own perspective of how much they are trustworthy. And then we would layer the technologies on top.
The way actual markets are supposed to work. The exact opposite of the situation today.
Q 7. And how would I trust that the entity I select would be acting in my best interest? Do I have to pick one? Or will I need a lot of them?
A. key component of the TM is its fiduciary relationship with end users.
Fiduciary law has been developed over many hundreds of years of equity and tort common law in Europe, all designed to address various forms of wrongdoing by others at our expense.
Here I am largely following Tamar Frankel, law professor at Boston University, and her groundbreaking work as an expert in the field. Professor Frankel has found that there are two basic types of fiduciary duties:
Duty of care:
the basic level – assessing the quality and care of one’s performance on behalf of someone else. Focuses on prudence, attention, and proficiency. A close analogy to tort law – an “unlawful touching” leading to material harm, due to inattention, negligence, lack of expertise. One can think of this as a negative duty, per the Hippocratic Oath – “first, do no harm.”
Duty of loyalty:
the heightened level – abusing one’s power in a relationship after being entrusted with that power. Focuses on how entrusted power is utilized, so obviously closely tied to trust relationships. Roots in European common law of equity. The duty includes acting for the sole benefit of your client/entrustor, and avoiding any conflict of interest with the entrustor. One can think of this as a positive duty – “actively promote the interests of your client.”
Other fiduciary duties as well – obedience (follow client’s instructions), candor (disclose relevant information), accountability, and non-delegation of fiduciary duties to third parties. That last one is especially interesting when considered in the context of the current Web.