The Law Commission for England and Wales hopes to make the UK a leading jurisdiction in resolving disputes related to emerging technologies such as cryptocurrencies, digital assets and electronic documentation.
The project, called “Digital Assets: Which Law, Which Court?”, was announced on Oct. 18 with the aim of reviewing international legal challenges related to cryptocurrencies and offering recommendations for legal reform in the United Kingdom.
Cointelegraph contacted Professor Sarah Green, Commissioner of Commercial and Common Law, to unravel the driving force behind the authority’s latest legal reform project. The UK legal review body has previously carried out projects targeting smart contracts, digital assets and decentralized autonomous organisations.
According to Green, previous legal reform projects have identified several problems in determining which laws apply to international technology-related disputes and which courts should reside under them.
As Green explained, existing rules of private international law applicable to property disputes rely on the property in question having a clear and definitive location. This provides a clear connection to a specific legal jurisdiction.
Since digital assets and emerging technologies do not often fit this “traditional mold”, the existing laws for litigation related to digital assets and the courts that must hear them are not necessarily adequate:
“This has given rise to an element of uncertainty as to how a court can apply existing rules. Indeed, English courts have already had to grapple with the difficult question of where certain digital assets are located for purposes of establishing jurisdiction in relation to with international defendants.”
Green then gave a couple of examples of litigation in 2020 and 2021. These cases were hampered by the difficulty of determining the jurisdiction of the digital assets involved. The process is crucial in deciding whether a claimant can serve a proceeding in a given court or country. As Green highlighted, the cases in question provided real-world instances that demand legal clarity:
“The problems are not abstract or hypothetical, but real and tangible.”
The Legal Commission intends to prepare a report with recommendations for reform in the context of private international law and digital assets. Next, It will be submitted to public consultation with a draft of recommendations for legal reforms in the second half of 2023.
Green underlined his belief that the bill will have a substantial impact on the status of English law as the preferred choice of law and jurisdiction to resolve disputes:
“It is all very well to propose amendments to English domestic law, but to reap the full benefit of such amendments, ideally they should be accompanied by amendments to the rules that determine whether English law applies and whether English courts can hear litigation in first place.”
The UK Law Commission proposed in July 2022 a series of legal reforms aimed at providing greater legal recognition and protection to users of cryptocurrencies and digital assets. The move was prompted by the rapid growth in ownership and trading of non-fungible tokens (NFTs) and cryptocurrencies in the country.
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