The Law Commission of England and Wales has launched a review that aims to provide clarity on how private international law rules can apply to emerging technology, such as digital assets and electronic trade documents.
The Commission’s new law reform project has been commissioned by the UK government. It will consider the private international law challenges in international tech-related disputes, such as those involving crypto-assets (cryptocurrencies and NFTs, for instance) and electronic trade documents.
The rapid rise of new digital technologies, which often rely on distributed ledger technology – such as blockchain technology – has generated several conflict of laws issues, leading to legal uncertainty for users, organisations and governments.
In many cases involving emerging technology, it is unclear which courts have the power of jurisdiction to hear the dispute, and which law should be applied. 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.
Increasing conflict of laws issues have been identified in previous Law Commission work over the last two years, on digital assets and electronic trade documents. The Law Commission will develop reform proposals in a public consultation paper, due to be published in the second half of 2023.
By providing further clarity and proposing reforms to the private international law rules affecting new digital technologies, the review seeks to provide greater certainty to both the domestic and international commercial community.
