How can civil law jurisdictions support data trusts? The Quebec example
Author: Dr Anne-Sophie Hulin, Postdoctoral fellow at Artificial and Natural Intelligence Toulouse Institute (ANITI- France), and Researcher at the Chair On Accountable IA in a Global world, University of Ottawa (Canada)
Data trusts and civil law jurisdictions
In most civil law jurisdictions, the use of trust law for data stewardship is not part of the legal landscape - trusts are generally emblematic of common rather than civil law traditions. The “civilization” of trust law is complex, affecting the contours and content of fundamental notions of civil law (ownership, legal person, patrimony). Some civil law jurisdictions have trust-like institutions, but their legal basis is different from trust law. For example, France is familiar with fiduciary duties since the introduction of the fiducie in 2007, but its scope is very limited and cannot be applied to data governance as the law stands. France also has another type of legal tool through which it is possible to design legally-regulated data sharing frameworks (i.e. groupement intérêt public or GIP). This is the basis for its national Health Data Hub and other and other data pooling projects for sharing. However, even if the GIP operates as an independent data sharing intermediary, it is not a trust-like institution because its legal regime is very different from the common law of trusts and cannot be assimilated to it.
The Quebec exception
Quebec provides a unique exception. Because of its geographical position and its steady exposure to the common law tradition that applies in the rest of Canada, Quebec is particularly receptive to the development of trusts within a civil law jurisdiction, and could offer a pathway to creating civil law data trusts.
The influence of the common law makes Quebec a hybrid civil law jurisdiction. Its law of trusts is precisely one of the symbols of this hybridity. Since the Civil Code of Québec (1994)[1], the Quebec trust has benefited from an updated framework under sections 1260 et seq that allows for the creation of ‘civilian’ trusts that are as flexible and comprehensive as its common law counterpart. Since then, the Quebec trust has been defined as a specific way of holding property or rights for the benefit of a person or the fulfillment of a purpose authorized by the law (section 1260 C.C.Q)[2] within a regime of fiduciary obligations. Even if the UK trust and the Quebec trust are conceptually very different because of the legal traditions in which these institutions are embedded, they share a common substance. As a result, it is possible to consider Quebec trusts as a civil law mechanism of data stewardship in a manner quite familiar to the UK-style data trust.
Although some may criticize the Quebec trust for being a heterodox institution from a civil law perspective, it has the potential to transpose the issues surrounding UK data trusts into civil law. Moreover, the Quebec trust is indirectly part of the European landscape as its principles have been applied in European countries, notably the Czech Republic.[3]
How are Quebec data trusts similar with UK data trusts?
Like the UK trust, the Quebec trust is a legal mechanism within data rights can be pooled and administrated by a trustee. Quebec data trusts could be set up by one or more groups or organisations who wish to mutualize their rights over the data. This has been the main focus of current projects aiming to implement legal structures for pooling and sharing urban, cultural or health data. In principle, a similar approach could be taken by individuals wishing to pool their rights, but, at this time, this option seems less developed in practice for several reasons including the absence of a right to data portability in Quebec civil law.
Quebec trusts also offer similar institutional flexibility to UK trusts in relation to how they may be created. For example, Quebec trusts can be established by contract or will. No specific formality is required although a written document is recommended. They can also be established by law or by judgment according to section 1263 C.C.Q.
Above all, as its UK counterpart, Quebec data trusts have a great potential to restore public confidence since it offers a legal basis for an accountable and independent data steward. The Quebec trustee is subject to a series of obligations (prudence, diligence, honesty, loyalty) and must account for his administration (section 1287 C.C.Q.). In the event of a breach of his fiduciary obligations, the trustee becomes personally liable (section 1308 C.C.Q.). They can also be removed from office (section 1290 C.C.Q.).
How Quebec data trusts differ from UK data trusts?
However, Quebec data trusts also have some specific features that distinguishes them from UK data trusts.
First, Quebec trusts are mostly constituted for a purpose (charitable and non-charitable). In contrast, UK trusts are essentially constituted for beneficiaries (or a charitable purpose). In other words, purpose trusts are the principle in Quebec civil law whereas they are the exception in UK law. The Quebec law of trusts does not admit non-charitable purpose trusts unless they are established in a particular statute. This pattern is very interesting, as all data trusts’ goal – whether they are civil law or common law mechanisms – is to mitigate power asymmetries in the data market. Data trusts are fundamentally intended to serve specific purposes (e.g., to protect the rights and interests of individuals). From this point of view, Quebec data trusts may have a more widespread and easier pathway to deployment than UK ones.
Second, the Quebec trust is not based on ownership, but administration. According to the Québec Civil Code, the trustee is not the owner of the rights put in trust. The trustee has a different status which is called administrator of property of another[4], and which gives “the exclusive control and administration” of the rights placed in trust. This means that the trustee can exercise all the rights relating to the trust assets and can take any appropriate measure to ensure their allocation according to the purpose defined in the trust document (section 1278 C.C.Q.). This mode of holding rights is quite unusual, even in civil law. But this is also interesting in the context of data where the main challenge lies in the supervision of data use and where concepts of ownership over personal data can be debated. A Quebec data trust could set up a rights management scheme without making personal data objects of ownership, but while ensuring some degree of control for individuals over their data through the trustee’s administration[5].
Key challenges for further developments in Quebec
In the wake of the UK data trusts buzz, the idea of a Quebec data trust has been receiving widespread attention. No Quebec data trust has yet been created, but several private and public organisations are currently exploring how the Quebec law of trust could be adapted to the specific context of data.
In addition to the operational challenges that will need to be addressed in creating a data trust, some legal uncertainties still need to be clarified for the transition from theory to practice and to ensure a tangible future for the Quebec data trust.
For example, the current regime for supervision and liability of trustees under Quebec civil law has some weaknesses. It is not clear how trustees are held accountable when a Quebec trust has no beneficiary (which is likely to be common, since Quebec trusts are essentially purpose trusts). To counter this deficiency, the Civil Code of Quebec allows any interested person to act against the trustee and denounce the shortcomings of their administration (section 1290 C.C.Q.). This provision should open the way for class actions, but this has yet to be more explored in practice. The law makes provision for the creation of a surveillance body to monitor Quebec purpose trusts (section 1287 C.C.Q.) but this provision has not been implemented yet.
The legal framework for personal data is currently being revised both in Quebec and in Canada. Data trusts are at the heart of these discussions, but Quebec organisations will have to wait and see to what extent these reforms will welcome or not the implementation of data trusts. It seems likely that many of these questions will be answered in the coming months, perhaps by means of Quebec data trusts prototypes.
References:
[1] C.C.Q in the following.
[2] Centre Paul-André Crépeau for Private and Comparative Law, Private Law Dictionaries, sub verbo “trust1”.
[3] Alexandra Popovici, "Trust in Quebec and Czech Law: Autonomous Patrimonies", (2016) 6 European Review of Private Law 929–950.
[4] Sections 1299 et seq C.C.Q.
[5] Sjef van Erp, “Management as Ownership of Data” (24-06-2019), in: Sebastian Lohsse, Reiner Schulze and Dirk Staudenmayer (eds.), Data as Counter-Performance: Contract Law 2.0? (Hart/Nomos, Forthcoming), Available at SSRN: https://ssrn.com/abstract=3541779 at 77-93.
This text is taken from the first version, published in French, on the website of the Cyberjustice Laboratory (Anne-Sophie Hulin, “Introduction à la fiducie Québécoise de données” (26-11-2020), online: Laboratoire de Cyberjustice Laboratory <https://www.cyberjustice.ca/2020/11/26/introduction-a-la-fiducie-quebecoise-de-donnees/>). In addition, I am very grateful to Harleen Kaloty for her great help in adapting this text.