Property (Digital Assets etc) Bill

Mills & Reeve has contributed to the debate on digital assets by submitting a response to the House of Lords Special Public Bills committee on the Property (Digital Assets etc) Bill on 17 December 2024.

Jacqueline Cook, senior finance knowledge lawyer and Lino di Lorenzo, principal associate have led the discussions on the Bill at the firm and prepared a written submission to respond to a call for evidence on the Bill. While the Bill itself is very short, its implications for English law and for the modern world of digital assets are far reaching.

This concise Bill was publicised in the Law Commission consultation in 2022, its final report in 2023 and supplemental report and draft Bill in July 2024, as creating a new "third category" of personal property. The Bill states that a thing which is digital or electronic in nature wouldn’t be prevented from being an object of personal property, even if it couldn't fall within the recognised categories of “things in action” and “things in possession”. 

While we’re supportive of the intention of the Bill, we’re of the view that the Bill could do much more to define “digital assets” either by use of a specific list or of characteristics of such assets. The Bill is intended to assist development of common law, however, it seems that common law is already on course to recognise and protect digital assets as personal property.

For our practice in relation to our clients’ business or personal affairs, we may (i) be advising corporate or finance clients holding digital assets or possibly offering them as collateral to support a financing arrangement; (ii) be instructed in tracing and recovery in an insurance context to locate and liquidate cryptoassets, cryptocurrency or NFTs; (iii) be advising on carbon credits or similar assets; or (iv) be advising individuals with cryptoassets and NFTs in their estate on death or bankruptcy.

We support any development of the law in this area to clarify what “digital assets” are and the rights and remedies attaching to them. We support the view of the UK Jurisdictional Taskforce and the Legal Statement on Digital Assets and English Insolvency Law, published in spring 2024, that English courts have already taken steps in certain cases to recognise digital assets as personal property and, consequently, rights attaching to them would be recognisable under English law.

We understand that the House of Lords Special Public Bills Committee has started to hear some oral evidence on the Bill following the deadline for submissions to the call to evidence.  

We’re delighted to have been involved and look forward to assisting in any way we can to the development of this area of law and practice. 

If you would like to know any more on this topic please contact Jacqueline Cook or Lino di Lorenzo.

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