Digital assets: which court, which law?

Current project status

• Initiation: Could include discussing scope and terms of reference with lead Government Department
• Pre-consultation: Could include approaching interest groups and specialists, producing scoping and issues papers, finalising terms of project
• Consultation: Likely to include consultation events and paper, making provisional proposals for comment
• Policy development: Will include analysis of consultation responses. Could include further issues papers and consultation on draft Bill
• Reported: Usually recommendations for law reform but can be advice to government, scoping report or other recommendations

Ensuring the rules of applicable law and jurisdiction can accommodate an increasingly digitalised world

Read the press release here.

This project was previously called “Conflict of laws and emerging technology”

The problem

In recent years, the Law Commission has undertaken a range of work on emerging technology, including digital assets and electronic trade documents. In each of these law reform projects, several conflict of laws issues have been identified, including the problem of determining which law applies to tech-related disputes, and which court has jurisdiction to hear such disputes.

With digital assets becoming increasingly common in the “virtual world”, particularly where they are distributed internationally, there are inherent difficulties in determining the geographical location of these intangible objects, as well as associated acts and actors.

For example, when a digital asset is hosted on a decentralised, distributed ledger – such as a blockchain – where is it located? And if transferred or misappropriated, where has it moved from, and where has it moved to? Digital assets (especially when combined with distributed ledger technology) have the potential to generate multiple (and potentially inconsistent) assertions of applicable law and jurisdiction. This area of law is presently uncertain and can often be difficult to apply.

The project

The Government has asked the Law Commission to undertake a project in this area. The Law Commission’s work will aim to set out the current rules on private international law as they may apply in the digital context and, if appropriate, make recommendations for reform to ensure that the law in this area remains relevant and up to date.

Next steps

We aim to publish a consultation paper in the second half of 2023.

Contact us 

If you would like to be kept up to date about this project, please email conflictoflaws@lawcommission.gov.uk and ask to be added to the mailing list.

 

Related projects 

You may also be interested in our work on the following:

Smart legal contracts

Crypto-assets and other digital assets

Electronic trade documents

Decentralised Autonomous Organisations (DAOs)