Assets and contracts created with Blockchain and similar technologies are valid under existing English law, according to the findings of a top group of experts in the UK jurisdiction taskforce of the LawTech Delivery Panel which is chaired by a senior member of the judiciary. The group recently published a 46-page legal statement published by the concluded that:
- Cryptoassets, including but not restricted to, virtual currencies, can be treated in principle as property; and that
- Smart contracts are capable of satisfying the requirements of contracts in English law and are thus enforceable by the courts. Statutory requirements for a signature can be met by techniques such as private key encryption.
According to writer Michael Cross at The Law Society Gazette, the statement, which followed a six-month consultation, was widely welcomed as providing legal certainty to a fast-growing sector of the economy.
“It is also likely to boost England and Wales as the jurisdiction of choice for agreements based on encryption technologies.”
Publishing the document in the City of London this morning, Sir Geoffrey Vos, chancellor of the High Court, described the initiative as:
“…a watershed for English law and the UK’s jurisdictions. No other jurisdiction has attempted anything like it.”
Vos stressed that the taskforce had produced a statement of:
“…not what they would like the law to be, but what they believe English law to be now.”
Without naming names, Sir Geoffrey added:
“Other jurisdictions have addressed the problem differently, starting with regulation and remedies, and worked backwards.’ However ‘There is no point in introducing regulations until you understand the legal status of the asset class you are seeking to regulate.’ The task force has asked the Law Commission to recommend if any legislation would be desirable.”
Also at the event, the lord chief justice, Lord Burnett of Maldon, said the statement shows the ability of the common law to adapt to new concepts and that the courts were well placed to handle any disputes.
“Many believe smart contracts will not require the intervention of lawyers, much less of judges. I very much doubt that.”
The Law Society said the statement demonstrates the flexibility of English common law to grow and adapt.
“It will increase confidence amongst law firms to adopt new technologies and among investors to invest,” said Simon Davis, president.
“Adopting new technologies could drive productivity growth in the legal sector up from 1.3% per year to 2.7% per year,” Davis added. “And every £1 spent on legal services supports £1.39 in spending across the entire UK economy – a contribution that could be boosted by continued investment and strategic support for legal technology.”
Jenifer Swallow, director, Lawtech Delivery Panel, commented:
“The worldwide smart contract market is expected to reach $300m by 2023 and the World Economic Forum predicts 10% of global GDP will be stored on the blockchain by 2027. It is great to see the adaptability of our common law system to fast-changing technology, demonstrated in this landmark legal statement from the UKJT.”
The legal statement was drafted by Lawrence Akka QC, David Quest QC, Matthew Lavy and Sam Goodman and supported by members of the UKJT, Linklaters LLP and the respondents to a public consultation which included businesses, academics and the wider legal sector.
- Scottish Blockchain Company Hypervine Signs with European Space Agency Data To Improve Efficiency And Transparency For The World’s Mining Industry - February 22, 2020
- Loyyal Signs Three Year Production Agreement with The Emirates Group for Use of Blockchain Loyalty and Rewards Platform - February 21, 2020
- Enjin Platform Enables Game Developers to Integrate Blockchain Assets Without Blockchain Coding Experience - February 18, 2020
- Blockchain Project Cashaa Protecting Crypto Companies to Survive Fifth Money Laundering Directive and New FCA Rules in 2020 - February 8, 2020
- US SEC Boss Hester Peirce Suggests Three Year “Safe Harbour Period” For Token Sales - February 6, 2020
- China’s Hyperchain Plans to Take on Coronavirus With Blockchain-Fueled Donation Platform - February 6, 2020
- Blockstack Proposes Using Bitcoin, Novel ‘Proof of Transfer’ To Accelerate A Truly User-Owned Web 3.0 - February 6, 2020
- Hack Blockchain To The MAX! €15.000 Prizepool at MAXathon in Berlin April 18-19, 2020 - February 6, 2020
- Chiliz And Enjin To Launch Blockchain Collectibles Using NFTs For The Likes of Juventus, Paris Saint-Germain, Atlético de Madrid and West Ham - February 6, 2020
- MIT Researchers Claim to Boost Bitcoin and Cryptocurrency Blockchain Transactions By 4x with New ‘Spider’ Routing Scheme - February 4, 2020
- Canada’s Blockchain Intelligence Group Signs USD$540,000 Contract with United States Feds - February 4, 2020
- The United States Marshals Services to Auction 4,040.54069820 Bitcoin – USD$37 Million - February 4, 2020
- OpenLegacy Project Gets $20m Strategic Investment from Japan’s SBI Holdings – Focus on Blockchain - February 4, 2020
- Fastest Growing and Highest Revenue Mobile Messenger App in the World, Japan’s LINE to Launch LINK Cryptocurrency - February 3, 2020
- Insolar to Launch MainNet on February 3, 2020 – Debuts Insolar’s New XNS Token - February 3, 2020
- Blockchain-Based Social Media App Vid with VI Tokens – To Launch April 1, 2020 – After VC $10 million USD Investment in 2019 - February 3, 2020
- UK FCA Licenses BCB Group as First Crypto Company to be Regulated as Authorised Payment Institution - January 31, 2020
- Virgil Griffith Pleads Innocent in Blockchain North Korea Event Case – Faces Up To 20 Years in Prison if Convicted - January 31, 2020
- University College London Centre for Blockchain Technologies Releases New Report on Supply Chains - January 31, 2020
- World’s Leading Research and Advisory Company Gartner Says Blockchain Smart Contracts Can Increase Corporate Overall Data Quality by 50 Percent - January 31, 2020
Also published on Medium.