Conflict of laws and emerging technology

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

We hope to begin work on this project in the first half of 2022.

The problem

The Law Commission’s work on smart legal contracts, digital assets and electronic trade documents has identified several conflict of laws issues, including ascertaining the law applicable to a dispute, and determining whether a particular court will have jurisdiction to hear a dispute in relation to a smart legal contract or digital asset. With digital assets and smart legal contracts having become so common in the “virtual world”, there are inherent difficulties in determining the geographical location of acts, actors, and intangible objects. For example, when a digital asset is hosted on a decentralised, distributed ledger, where is it located? And if transferred or misappropriated, where has it moved from, and where has it moved to? Digital assets and smart legal contracts (especially when combined with distributed ledger technology) have the potential to give rise to multiple (and potentially inconsistent) assertions of governing 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 hope to begin this project in the first half of 2022. If you would like to be kept up to date, please email commercialandcommon@lawcommission.gov.uk and ask to be added to the stakeholder list for this project.

 

Project details

Area of law

Commercial and common law

Team

Commercial and Common Law team

Commissioner

Professor Sarah Green