In an attempt to adapt the laws of the United Kingdom to the new technological realities, the British Law Commission announced, through a report released on Thursday, July 19th, that it will launch an investigation to call for potential reform of the law to adjust it to the use of blockchain and smart contracts.
The announcement is part of the Commission’s annual report 2017-2018, a 91-page document that addresses different aspects and laws such as those involving criminal law, commercial and common law, public law, property, and family law. The section on blockchain and smart contracts has been included in the commercial and common laws.
The report states, according to the commissioners who participated in its preparation, that there has been much media coverage concerning smart contracts, particularly those related to financial services. However, the Commission broadly recognizes the potential for improving many processes.
Lawmakers around the world struggle to legislate blockchain and smart contracts
The purpose of this project would be to ensure that the law is secure and flexible enough to be applied in a global, digital context and to highlight any issues that lack clarity or certainty. We have begun our initial research on this project, which is scheduled for the summer of 2018.
United Kingdom Law Commission
The agency’s recommendation is to ensure that both the courts and the law itself remain competitive for new business, which could leave the door open for some regulation in the short or medium term.
It is not the first time when an agency or state has announced changes in its legislation to add or recognize the legality of smart contracts. That has been the case, for example, in Florida, in the United States, where it became known last January that a bill was introduced to create a legal database on blockchain and smart contracts.
A similar situation occurred in the state of Tennessee, also in the United States, where Governor Bill Haslam signed an amendment to the state’s commercial legislation related to electronic transactions last March. The intention was to include, in a new section, blockchain technology and smart contracts.