Law commission

UK Law Commission expects ‘substantial impact’ of Digital Assets Act review

The Law Commission of England and Wales hopes to make the UK a leading jurisdiction to tackle legal disputes involving emerging technologies such as cryptocurrencies, digital assets and electronic documentation.

The project, entitled “Digital assets: which law, which court?” was announced on October 18 with the aim of examining international legal challenges involving cryptocurrencies and providing recommendations for legal reform in the UK.

Cointelegraph has reached out to Professor Sarah Green, Statutory Commissioner for Commercial and Common Law, to unveil the driving force behind the authority’s latest law reform bill. The UK’s legal review body has previously conducted projects targeting smart contracts, digital assets and decentralized autonomous organisations.

According to Green, previous law reform projects have identified several problems with determining which laws apply to international disputes related to technology and which courts should hear them.

Related: UK Government Introduces Bill to Empower Authorities to “Seize, Freeze and Recover” Crypto

As Green explained, the existing rules of private international law applicable to property disputes are based on the fact that the property in question has clear and definitive locations. This gives a clear link to a particular legal jurisdiction.

Since digital assets and emerging technologies generally do not fit this “traditional mould”, the existing laws for disputes involving digital assets and the courts that should hear them are not necessarily adequate:

“This has led to an element of uncertainty as to how a court can apply the existing rules. Indeed, English courts have already had to wrestle with the difficult question of where certain digital assets are located for the purposes of establishing their jurisdiction over international defendants.

Green then gave some examples of legal disputes in 2020 and 2021. These cases have been crippled by the difficulty of determining the jurisdiction of the digital assets involved. The process is crucial in deciding whether a plaintiff can serve proceedings in a particular court or country. As Green pointed out, the cases in question provided concrete examples that call for legal clarity:

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

The Law Commission will aim to produce a report setting out recommendations for reform in the context of private international law and digital assets. This will then be submitted for public consultation with draft recommendations for legislative reforms in the second half of 2023.

Green underlined his belief that the draft would have a substantial impact on the status of English law as the preferred choice of law and jurisdiction to adjudicate disputes:

“It is all very well to propose reforms to English domestic law, but to take full advantage of these reforms they should ideally be accompanied by reforms to the rules which determine whether English law applies and whether English courts can hear of the dispute at first instance. square.”

The UK Law Commission proposed a number of legislative reforms aimed at providing broader legal recognition and protections to users of cryptocurrency and digital assets in July 2022. This move was prompted by the rapid growth ownership and trading of non-fungible tokens (NFTs) and cryptocurrencies in the country. .