"Code as Law” vs. “Law as Code”: Shaping Public Administration, Judiciary, and Corporate Compliance in the Digital Age

While digitalisation in the legal domain is gearing up it is important to make the distinction between the concepts of “law as Code” versus “Code as Law”.

There is a significant differentiation that is important to maintain public trust in a digitalised judiciary or decision support systems in the public sector.

The concept of “Code as Law” is deterministic and imperative and fits well in e.g. the blockchain world or in areas where a final and definitive (non-reversable) application is needed. Leaving aside the legal issues related to that (like is there something non-reversable decision/action in law and if so how will it be reversed if it is null and void), the concept of definitive legal rules has been explored many times over many centuries in the past and it has turned out that it is not suitable for representing our legal system in broader terms.

On the other hand, we cannot deny that any rule based implementation of legal regulation has elements of “Code as Law” as we (at least today) cannot automate legal applications with the full variety of interpretation of legal regulation. So when developing rule based applications we need to be humble enough to concede that this might cover the greater number of standard decisions in? a legal workflow process, but not all shades and varieties of the possible facts in the circumstances.

The focus in this article is to make the distinction why “Law as Code” and “Code as Law” are relevant concepts for legal digitalisation but that we also need to be aware what they mean for practical implementation of legal applications.

Introduction

As digitalization increasingly reshapes public administration, the judiciary, and corporate compliance, two frameworks stand out in discussions about how technology intersects with law: "Code as Law" and "Law as Code." These concepts reflect different approaches to incorporating code-based systems in the legal field, each with distinct implications for regulatory structures, decision-making, and human oversight.

"Code as Law," introduced by Lawrence Lessig, implies that code can act as a regulatory force, establishing rules that guide or restrict behavior in much the same way as legal statutes. This concept has become a particularly relevant in the blockchain domain where transactions shall be directly executable and enforceable. However, implementing a strict "Code as Law" approach would mean code might, at times, operate independently of human review, potentially introducing rigidity where flexibility and contextual judgment are essential. A number of papers have been written on the fact that “Code as Law” is not necessarily meaning that “Code is Law” (in a sense of legally created and binding) but rather a concept for implementation.

In contrast, "Law as Code" focuses on expressing legal rules in structured, programmable language to enhance clarity, consistency, and efficiency in applications like administrative processing and judicial procedures. Rather than replacing legal professionals' role in interpreting and applying laws, this approach aims to support and streamline legal workflows, helping bridge the gap between traditional decision-making and digital processes.

Here we will explore how these two concepts are guiding the current digital transformation across legal fields. Importantly, while we are moving towards a more digital-first approach in the legal domain, this transition does not represent a "Code as Law" concept that overrides human control. Instead, we are in an initial phase focused on shifting from manual, form-based decision-making to a digitally enhanced framework. This evolution promises numerous benefits, including improved efficiency, accessibility, and accuracy, while keeping the fundamental principles of human oversight, transparency and interpretative flexibility at the forefront.

The current wave of digitalization in the legal field aims to modernize and enhance established processes without removing the need for interpretive human oversight. For instance, automated systems in public administration can quickly process applications for services like social benefits or business permits, following clearly defined criteria. Similarly, compliance tools in corporate governance use coded rules to streamline checks and ensure that organizations meet legal standards in real time. A particular and important benefit is that data created in these processes is integrated in the overall data management systems of organisations and does not have to retrieve manually for a next step in a workflow or in another context. These implementations demonstrate the potential of digital tools to improve the speed, consistency, and accuracy of routine administrative tasks.

Yet, unlike a strict "Code as Law" model, these systems are designed to work alongside human decision-makers rather than supplanting them. By maintaining this balance, legal professionals can leverage digital efficiencies while preserving the flexibility to address exceptional cases, interpret laws in context, and make nuanced decisions that reflect the intent of the law beyond its literal coding.

A Transition from Forms to Digital-First Decision-Making

Much of the work in public administration and legal compliance, but also in many aspect of workflows in the judiciary, is form-based, with rigid procedural steps and manual review. These processes lack the adaptability needed in today’s dynamic legal environment. By digitizing workflows, organizations and government bodies can reduce redundancies, process information faster, and deliver results with fewer errors and most importantly also efficiently manage data.

Understanding "Code as Law" in this Context

While digitalization brings undeniable improvements, it’s crucial to recognize that these advancements are not about implementing "Code as Law" in a manner that overrides human review. Instead, this transition focuses on creating digital support systems that streamline decision-making, with a clear priority placed on human control. Automated systems in this context serve as tools to aid decision-makers by handling the repetitive, predictable tasks, thereby freeing up human professionals to focus on cases that require interpretative flexibility, ethical judgment, and contextual understanding.

"Code as Law" as a concept envisions a world where the rules embedded in software code effectively govern behavior by controlling access, permissions, and user actions within a system. For instance, a code could enforce certain legal rules by default—automatically applying restrictions, validating user actions, or ensuring compliance with a set of predefined criteria. This approach is already present in some digital systems that regulate online behavior or restrict access based on programmed rules.

Within public administration, "Code as Law" could be applied to ensure consistent adherence to regulatory requirements, minimizing the risk of human error and bias. However, unlike conventional legal codes that are open to interpretation by judges or legal professionals, "Code as Law" operates as a strict set of rules embedded directly in software, which can limit its adaptability. As legal processes often require interpretative flexibility, a rigidly coded rule may struggle to account for the complexities and nuances of real-world cases.

Now we also need to be aware that any application that replicates a rule-based decision process has elements of “Code as Law” as the rules strictly enforce the regulation as implemented in the respective code. This is clearly a concept in areas where we do have clear and strict rules with no or little room for interpretation or where practice has established accepted processes of decision making that follow a clearly identifiable path of rule application and decision making.

Benefits and Efficiency in Public Administration

So, in scenarios where rules are clear and consistency and objectivity are essential, "Code as Law" has clear advantages. Automated decision-making systems within public administration, for example, can process applications based on transparent, encoded criteria, ensuring fair treatment of similar cases. In areas like tax assessments, licensing, and eligibility determinations, coded rules can streamline processes, reduce administrative overhead, and speed up decision timelines.

The appeal of "Code as Law" lies in its capacity to provide fast, reliable decisions in high-volume administrative tasks where clear-cut criteria apply. This can significantly enhance the efficiency of public services, delivering benefits to both the public and the government by reducing bureaucratic delays and minimizing the potential for inconsistent rulings.

By the way, using a “Code as Law” approach for such processes, does not mean that decisions wouldn not be appealable. The just follow the concept of form-based mass decisions that is applied in todays work in public administration or the judiciary as well.

Challenges and Limitations: The Need for Flexibility

But of course, despite the potential for increased efficiency, "Code as Law" poses critical challenges in fields that demand adaptability and discretion. Legal decision-making often requires interpretation, considering not only the letter of the law but also its spirit, context, and applicability to unique circumstances. A coded rule that strictly enforces regulations without room for human judgment may lead to unjust or overly rigid outcomes.

It is also highly unlikely that Generative AI models can easily solve this tasks, as training data again will be driven by a majority of similar cases that are overriding the likelihood to spot the individually different path to a solution in specific and distinct circumstances (Generative AI is built after all based on statistical models).

Moreover, the opacity of coded decision-making can raise concerns about transparency and accountability. Without clear oversight, the logic within any automated system may be difficult for users or regulators to understand or challenge, leading to potential issues around fairness, especially when decisions are made without human review.

Human Oversight as a Safeguard in Public Administration and the Judiciary

While "Code as Law" can be valuable in creating efficiencies, its application in public administration requires thoughtful integration to preserve essential legal principles. A more balanced approach involves using coded rules to assist rather than replace human decision-makers. In cases where complex interpretation or ethical considerations are involved, human oversight should remain an integral part of the process. This ensures that the system remains adaptable, able to account for exceptional situations, and aligned with the broader objectives of fairness and justice.

By using "Code as Law" as a support tool rather than as an absolute regulator, public administration can benefit from the efficiencies of digital automation without losing the flexibility that human oversight provides. This approach acknowledges the need for technology-driven improvement while respecting the inherently interpretive and adaptable nature of legal processes.

Exploring "Law as Code" as a Path to Legal Digitalization

While "Code as Law" as a concept treats software as a regulatory force, "Law as Code" approaches digitalization differently. It involves expressing legal rules in a structured, programmable language, creating a direct, consistent way to implement laws within automated systems. This approach holds significant promise in public administration and the judiciary, where clear, codified rules can streamline administrative and procedural tasks. Unlike "Code as Law," which might operate independently of human oversight, "Law as Code" is intended to assist legal professionals in making informed, accurate, and consistent decisions.

Concept and Digital Transition Goals

The idea behind "Law as Code" is to make laws more transparent and accessible by translating legal rules into digital form. Rather than relying on lengthy textual legal codes that require manual interpretation, "Law as Code" represents legal rules as structured, machine-readable data. This allows public administration and judicial systems to apply rules consistently, reducing ambiguities and supporting efficient legal processes.

"Law as Code" is not about replacing legal interpretation but about providing tools that enhance it. By digitizing legal rules, it becomes easier to ensure that all relevant criteria are considered in administrative processes, while still allowing room for professional judgment. This approach supports the broader goals of legal digitalization by making law more interoperable, scalable, and user-friendly.

Here the main focus is that by using concepts like taxonomies and ontologies laws and regulations are crafted in a clear and better understandable way that supports digitalisation and allows the expressions of laws and regulations in a digital (codable) format. However, without the request that the code is the law and so supporting efficient development of applications in the legal domain.

Not "Code as Law" – A Controlled and Flexible Digital Transition

It is important to make the point again that the shift toward digital-first workflows in public administration and the judiciary is not a move toward "Code as Law." Rather than enforcing rigid, unchallengeable rules, this digitalization effort is about creating flexible support systems that can adapt to new legal interpretations, exceptional cases, and evolving societal needs. In this context, digitalization does not mean replacing legal judgment with a strict coded structure; instead, it provides a more streamlined, efficient way to support and enhance traditional processes.

But clearly a more digital friendly making of laws and regulations is important for digitalisation in the legal domain. While “Code as Law” implies a very strict (and less flexible) for of expressing rules, “Law as Code” accepts the expression of laws in natural language but requires the reduction of unnecessary complexity (mostly caused by political compromise), clear expression in the regulation itself and? also in all supplementary information (legal notes to the relevant regulations) as a basis to create efficient digitalisation in the context of such regulations.

This approach also allows public institutions to update digital systems as laws, regulations, and societal expectations change. By designing digital tools with adaptability in mind, public administration and the judiciary can ensure that these systems serve the public effectively while remaining aligned with the broader goals of fairness, accessibility, and transparency.

Applications in Corporate Compliance

Beyond public administration and the judiciary, the principles of "Law as Code" and "Code as Law" are increasingly relevant in the corporate world, particularly within compliance and regulatory frameworks. As companies face complex and evolving regulatory demands, digital tools offer a powerful means to automate compliance processes, streamline internal controls, and enhance accountability. However, as with public administration, corporate compliance systems must balance the efficiency of digital rules with the flexibility of human judgment to address unique situations and ensure fairness.

“Law as Code” has the potential to? become a more relevant concept in the corporate domain. It simply allows a corporation to set strict rules in the context of compliance enforcement and in such context the rules are usually strict in a sense that the corporation applies its own interpretation to laws and regulations and does want all members of the corporation to adhere to such rules (i.e. there is little to no interest that every member thinks about their own interpretation of the regulation). That allows a coherent approach of the organisation in complying with laws and regulations. But also for such applications clearly written and easily understandable laws and regulations are quite helpful.

Comparing "Code as Law" and "Law as Code" in the Broader Digitalization Context

As digitalization advances in the legal field, "Code as Law" and "Law as Code" provide distinct but related concepts that shape how rules and regulations are implemented within digital systems. While both concepts contribute valuable approaches to streamline and automate legal processes, they embody different philosophies and present unique challenges and advantages. Understanding these differences is key to designing effective digital systems that leverage the strengths of both models without compromising the interpretative flexibility and ethical standards that define human-driven legal work.

Human Judgment and Ethical Considerations

Human judgment is critical to ensure that digital systems are in line with the respective application of laws and regulations in individual cases and to make sure that also ethical principles are respected. Automated systems can excel at applying predefined rules consistently, but they lack the capacity to interpret laws with respect to particular individual factual circumstances, ?with empathy, consider social impacts, or adapt to changing moral standards. Human oversight allows digital systems to account for these ethical dimensions, ensuring that outcomes are fair, transparent, and just.

Striking a Balance Between Efficiency and Interpretative Capacity

Ultimately, the effectiveness of digitalization in legal domains depends on striking the right balance between the efficiency of automated systems and the interpretative capacity of human professionals. "Law as Code" provides a model for this balance, enabling systems to support human decision-making , whereas "Code as Law" is helpful where the rules and regulations are clear and embedded in a system of checks and controls.

This balanced approach acknowledges that while digitalization can improve operational efficiencies, it should not compromise the flexibility and ethical standards that are fundamental to legal systems. By combining the strengths of both "Code as Law" and "Law as Code," digitalization in public administration, the judiciary, and corporate compliance can be achieved in a way that respects the critical role of human oversight.

VIII. Conclusion

The journey toward digitalization in the legal domain brings both opportunities and challenges, embodied in the frameworks of "Code as Law" and "Law as Code." Each approach offers distinct benefits: "Code as Law" demonstrates the potential of code to standardize and streamline legal processes, while "Law as Code" offers a supportive framework that enhances human decision-making without overriding interpretive flexibility. Together, these models are helping to shape a more efficient, transparent, and accessible legal system.

As we move forward, it is essential to continue designing digital tools that serve as a complement to human expertise rather than a substitute for it. By focusing first on digitalization as an enhancement rather than a replacement, we can build systems that meet the dual objectives of efficiency and ethical integrity.

In summary, the future of digitalization in the legal domain lies in understanding and carefully integrating "Law as Code" and "Code as Law" principles, creating a digital-first yet human-cantered system. This approach not only enhances operational efficiency but also preserves the interpretive capacity and ethical oversight that are essential to upholding the spirit of the law.