Offshore 'Firewalls'

Firewalls are legislated norms barring recognition and enforcement of rights under the laws of foreign jurisdictions and decisions of foreign courts. 30 offshore jurisdictions enacted firewalls to attract trust parties, actual and prospective, to choose their laws to govern trusts they create, by bolstering the protection those laws accord from rights under foreign laws and foreign judicial decisions. We compare those 30 firewalls, which differ along many dimensions. We then discuss the many problems firewalls raise, from the normative issue of firewalls being used to render meritorious claims unenforceable to the practical one of firewalls making the operation of international trusts, which requires the cooperation of two or more jurisdictions’ courts, more difficult. We offer some solutions to these and other problems, and end with a proposed extension of the firewall logic to smart contracts, created in computer code, including an example of such a software firewall.