UK Law Commission expects ‘substantial impact’ from digital asset law review

UK Law Commission expects 'substantial impact' from digital asset law review

The Law Commission of England and Wales hopes that the United Kingdom will be a leader in resolving legal disputes involving new technologies such as cryptocurrencies, digital assets and electronic documentation.

The project is called “Digital Assets: Which Law, Which Court?” The project, dubbed “Digital Assets: Which Law, Which Court?” was launched on October 18. It aims to review international legal issues involving cryptocurrency and make recommendations for legal reform in Britain.

Cointelegraph spoke to Professor Sarah Green (law commissioner for common and commercial law) to learn more about the motivation behind the authority’s most recent law reform project. The U.K.’s law review body has conducted previous projects that were aimed at smart contracts and digital assets, as well as decentralized autonomous organisations.

Green stated that the prior law reform projects had identified many issues in determining which laws should apply to international tech-related dispute resolutions and which courts should have jurisdiction over them.

Similar: UK Gov’t Introduces Bill to Give Authorities the Power to “Seize, Freeze and Recover” Crypto

Green explained that the existing private international law applicable to property disputes is based on property having a clear and definitive location. This establishes a connection with a specific legal jurisdiction.

Digital assets and emerging technologies don’t usually fit this “traditional mold”, so the existing laws for digital assets disputes and the courts that should hear these cases are not appropriate.

“This has created uncertainty about how a court can apply existing rules.” English courts have had to deal with the hard question of where digital assets are located in order to establish jurisdiction over international defendants.

Green then provided a few examples of legal disputes that occurred in 2020 and 2021. The difficulty in determining the jurisdiction of digital assets was a major problem in these cases. It is vital to determine if a claimant may serve proceedings in a particular court or country. Green emphasized that the cases involved were real-world situations that require legal clarity.

“The issues are real and tangible, not abstract or hypothetical.”

The Law Commission will produce a report that will include recommendations for reforms in the context of digital assets and private international law. The report will be made available for public consultation and include draft recommendations for law reforms for the second half 2023.

Green expressed her belief that the project would have an important impact on English law’s status as a preferred law choice and the jurisdiction to resolve disputes.

“It’s all well and good to propose reforms to English domestic laws, but in order to reap the full benefits of those reforms, it is ideal to accompany them with reforms to the rules that determine if English law applies to the dispute, and whether English courts can hear it.

In July 2022, the U.K. Law Commission presented a series of reforms that would provide greater legal protections and recognition for digital asset users. This was due to the rapid growth of ownership and trading in nonfungible tokens (NFTs), and cryptocurrencies in the United Kingdom.

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