Property (Digital Assets etc) Bill

Lord Ponsonby of Shulbrede Excerpts

Second reading committee
Wednesday 6th November 2024 Grand Committee

Moved by

[Lord Ponsonby of Shulbrede]

That the Committee do consider the Bill.

[The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)]

My Lords, as we begin, I would like to set out some of the history of property law and how this Bill came into being. It is worth noting at the outset that these proposals are concerned with the law of personal property in England and Wales; that is, anything that is not land or real estate. Specifically, the Bill is designed to respond to the challenge the common law faces in recognising certain digital assets, such as crypto tokens, as property; and to position the UK as the pre-eminent jurisdiction for the transaction of digital assets and the resolution of disputes arising from them.

As your Lordships will be aware, certainty around personal property rights is important for a number of reasons, including: in cases where objects of property rights are interfered with or unlawfully taken; in cases of bankruptcy or insolvency; and for the legal rules concerning succession on death. These rights are also important for the proper characterisation of numerous modern and complex legal relationships, including custody relationships, collateral arrangements and structures involving trusts.

Traditionally, personal property has been categorised into two types: tangible property that you can hold or otherwise physically possess, known as “things in possession”; and intangible property that can be claimed or enforced only through a court action, such as a debt or contractual right, known as “things in action”. These categories have been recognised in English and Welsh law for centuries, long before digital assets existed. It is not surprising that they do not fit neatly into either category, yet some digital assets have characteristics that mean they should be recognised as property by the common law and treated as such.

For example, it has long been held that pure information cannot be the object of property rights because it can be copied exactly without affecting the original version. If one party sends another party a Word document, for example, the original party still has their copy. By contrast, the technology used to create crypto tokens means that they cannot be duplicated or “double spent”. This has been recognised in some recent case law, which found that certain digital assets, specifically crypto assets, can still attract personal property rights even though their unique nature means that they are neither things in action nor things in possession.

It is worth noting, however, that these cases are not definitive in that the decisions were not made by a precedent-setting court. This has left some ambiguity, as there is old case law suggesting that something cannot be personal property if it does not fall within either of the two traditional categories. Under the previous Government, in 2020, the Ministry of Justice asked the Law Commission to review the law on crypto tokens and other digital assets, and to consider whether reform was required. In its 2023 report, the Law Commission concluded that certain types of digital assets can attract property rights and recommended legislation to reflect this. This Government agree wholeheartedly with that approach, which is why we have brought forward this Bill.

I turn to the details of the Bill, which has only one limited and technical operative clause. It recognises that:

“A thing … including a thing that is digital or electronic … is not prevented from”


attracting

“personal property rights merely because it is neither … a thing in possession, nor … a thing in action”.

The Bill simply signals a further category of personal property. What it does not do is state which assets fall within this further category. It also does not provide for the legal consequences of falling into this category. These are matters purposefully left to the common law, which is best placed to respond in a nuanced and flexible way.

The Bill does not mean that all digital assets will be recognised as property. There are many kinds of digital assets with different features, including crypto tokens, non-fungible tokens, virtual carbon credits, digital files, and domain names. The well-established common-law tests for personal property will be applied by the courts to each specific digital asset. This means that only things with the necessary characteristics of property will be recognised as attracting property rights.

We believe that the Bill has clear benefits for England and Wales as a legal jurisdiction, and the UK as a whole, enabling more efficient dispute resolution, attracting international businesses to use our law, and promoting economic growth. The Bill will: first, encourage the use of English and Welsh law by international businesses by increasing confidence in how our law will treat certain digital assets; secondly, ensure protections for owners of crypto tokens and other assets in the event of unauthorised use or misappropriation; thirdly, decrease litigation costs and court time by giving certainty as to the existence of a further category of personal property; and, lastly, empower the courts with the tools to develop our world-leading common law.

Ultimately, the Bill will ensure that our jurisdiction continues to be an attractive place to do business with, and litigate in respect of, crypto tokens and other emerging assets that have the characteristics of property under the common law. The Property (Digital Assets etc) Bill represents a step forward in modernising the law of personal property in England and Wales. By recognising a further category of personal property, it recognises the unique features of digital assets, ensuring that they can be protected and managed effectively under the law.

The Bill underscores our commitment to fostering innovation. It supports our efforts to ensure that our jurisdiction remains at the forefront globally, providing a flexible legal framework that can react to the dynamic nature of digital assets and other emerging technologies. I hope the Bill receives strong support and I look forward to noble Lords’ contributions. I beg to move.

--- Later in debate ---

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, I am grateful to those noble Lords who contributed to today’s debate. All of them will, I hope, acknowledge the expertise in the Room. Committee stage is likely to be very expert as well; I look forward to it.

I am keen to emphasise, as the noble Lords, Lord Clement-Jones and Lord Sandhurst, did, the great deal of work that has gone into the Bill: from the Law Commission, which produced an excellent report and followed that up with a consultation on the proposed Bill, and from the practitioners, businesses, academics and organisations that engaged with the process throughout. I give my thanks to all who were involved in that work.

The result of those efforts is a simple but elegant Bill. As has been said, most notably by the noble and learned Lord, Lord Thomas, it will support our efforts to remain a pre-eminent jurisdiction, with English and Welsh law the global law of choice, and it will signal that the UK is a leader in innovation and technology. As our society evolves, so too must our laws. The Bill is just one of the ways in which we are modernising our legal framework. I will endeavour to address some of the points made by noble Lords. If I miss any points in particular, I will of course write to noble Lords.

First, the noble Lord, Lord Holmes, asked a number of questions, and I will have a go at answering them— I recognise his expertise in this matter. The first question was on whether the Government are sure that the current categorisation is not exhaustive and unable to accommodate existing digital assets. The Law Commission considered this option as part of its extensive and detailed report. It acknowledged that it would be possible to recognise crypto tokens as falling within an expanded category of things in action—that is, to treat “things in action” as a catch-all category for all personal property that is not capable of possession. However, crypto tokens and similar assets are fundamentally different from other things in action, which can only be claimed or enforced through a court action. For example, unlike debt they can be stolen, which in some ways makes them more like things in possession despite them not being physical objects.

Digital assets could not have been conceived when the original categories of personal property were developed and so it is no wonder that these do not fit neatly into either category. The commission, and most of its consultees, concluded that it would be better for the law to recognise that this unique combination of features means that they belong to a different category. That is why we chose the third category option, which is promoted in the Bill.

The second point the noble Lord, Lord Holmes, made, was on the implications for our courts. One of the great strengths of the common law is its ability to evolve. We are, however, dependent on the right cases being brought to the precedent-setting courts. While we could have left the law to develop, there is no guarantee of if or when this would happen, and in the meantime the uncertainty would remain about whether digital assets could be treated as personal property. The underlying point of the Bill is to put into statute the way that the common law was developing in any case, and to allow the common law to continue to develop once this particular bit of legislation is in place. To that end, the Government took the decision to legislate to give the market confidence and clarity in English and Welsh law. It also provides a strong indication to the courts that Parliament then intends to develop common law and that there is a further category of personal property that some digital assets can fall within.

The third question the noble Lord, Lord Holmes, asked, was on what this means for the common-law community. The Bill does not put the law of England and Wales at odds with other common-law countries. Courts in New Zealand and Singapore have considered that crypto assets are capable of attracting property rights and question the appropriateness of there being only two categories of personal property. The Bill is consistent with further international legal developments —for example, the US, New Zealand, Singapore and the Dubai International Finance Centre have recognised crypto tokens as property, and the latter has recognised them as specifically belonging to a new category of personal property.

The noble Lord, Lord Holmes, asked about Scotland. Scotland’s law of personal property is distinct and does not share concepts of things in action or things in possession, so any legislative intervention in this area would have to be slightly different. I understand that the Scottish Government recently appointed an expert reference group to consider how Scots private law may best accommodate digital assets. It will be interesting to see how its work develops in this area. No noble Lord raised Northern Ireland, but the Bill could be extended to include Northern Ireland, subject to a legislative consent Motion at the Northern Ireland Assembly’s request.

The noble Lord, Lord Vaizey, spoke about the importance of the financial regulation of crypto assets. The Bill supports and complements the work of the Treasury and the Financial Conduct Authority, which are currently working on appropriate financial regulation of crypto assets.

The noble Baroness, Lady Bennett, asked what impact the Bill will have on things such as illegal transactions, fraud and tax avoidance. I recognise her points, and the answer is that the Bill deals only with a specific issue of personal property law. Illegal transactions, fraud and tax avoidance are properly dealt with by other statutes and initiatives.

The noble Baroness spoke about the environmental impact of crypto in a wider sense, and my noble friend Lord Stansgate also made that point. Of course, the Bill does not have a direct environmental impact, as it does not mandate for an increase in the use of crypto tokens or other digital assets—digital assets will continue to be used and created regardless of the Bill. Rather, the Bill is about clarifying the legal status of digital assets that already exist when a dispute has arisen. The Bill will help keep the courts of England and Wales as a leading place to mitigate these disputes.

However, I agree that environmental issues are important. This falls to a much wider discussion on things such as improving energy efficiency and adoptable sustainable power sources, and that is best addressed by other statutes and initiatives. Conversely, it is possible that the Bill could bring positive environmental benefits by enabling innovative green finance for particular projects and things. Nevertheless, I take the noble Baroness’s point.

My noble friend Lord Stansgate asked a number of questions. The first was: is the panel on the legal concept of control proceeding? I am happy to confirm that the UK Jurisdiction Taskforce, an expert group chaired by the Master of the Rolls, is taking forward this work, as a body that already has an internationally credible voice in the intersection of law and technology. In fact, I met Sir Geoffrey Vos last week, and we spoke about that very point.

Secondly, my noble friend asked whether the Bill would help in the division of matrimonial property on divorce—the noble Lord, Lord Meston, made this point as well. I am pleased to say that the Bill will help courts to say with confidence, in divorce cases, that crypto assets are matrimonial property. This is also a case for crypto assets on death.

The third question my noble friend raised was: will the Bill help people access the iPhone photos, for example, of deceased relatives? The situation for other digital assets, such as digital photos, is not addressed by the Bill, as the assets are not personal property. So it will not address that point as such, but it will be for the common law to develop the answers to those sorts of questions.

The noble Lord, Lord Freyberg, in a thoughtful speech of which he gave me good notice—I thank him for that—raised the impact of NFTs on the traditional art market. As he rightly said, there are many different aspects to this, and many uses for digital assets, giving rise to different legal, practical and other issues. This Bill does not purport to deal with all the issues that arise; that would be a very different and hugely extensive Bill. This Bill deals with a discrete issue of personal property law; it does not relate to the existing statutory framework of copyright law, artists’ resale rights or consumer protection law. Those areas of law raise different policy issues and need to be considered separately. I recognise the important work done by the CMS Select Committee on issues such as copyright infringement, and other bodies such as the Financial Conduct Authority on issues of consumer misinformation about crypto. These issues are too varied and complex to be brought within the present Bill, which is deliberately limited in scope.

On the noble Lord’s comments relating to AI, the Government believe in both human-centred creativity and the potential of AI to open up new creative frontiers. The AI and creative sectors are both essential to our mission to grow the UK economy. However, this is an area which requires thoughtful engagement. I understand that the Intellectual Property Office, the Department for Science, Innovation and Technology and the Department for Culture, Media and Sport are working closely with a range of stakeholders, including artists, on issues related to AI, copyright and IP. This includes holding round tables with AI developers and representatives from the creative industries.

I thank the noble Lord, Lord Clement-Jones, for his broad support for the Bill, although he asked whether this should be left to the common law. The idea is that this Bill will enable the common law to continue developing in this field. There will be new technologies, including things that perhaps we have not even thought about in this debate. The law of personal property is an area which has traditionally been developed through common law. If the noble Lord wishes to pursue the issue, we could develop it in Committee.

[Baroness Bennett of Manor Castle (GP)]

Will the Minister write to me about the issue I raised from COP 16 about digital sequence information on genetic resources, and the broader point about digital commons?

[Lord Ponsonby of Shulbrede (Lab)]

Yes, I will be happy to write to the noble Baroness.

Motion agreed.

Property (Digital Assets etc) Bill [HL]

Lord Ponsonby of Shulbrede Excerpts

2nd reading
Wednesday 13th November 2024 Lords Chamber

Moved by

[Lord Ponsonby of Shulbrede]

That the Bill be now read a second time.

Considered in Second Reading Committee on 6 November.

Bill read a second time and committed to a Special Public Bill Committee.

Property (Digital Assets etc) Bill [HL]

Lord Ponsonby of Shulbrede Excerpts

Report stage
Wednesday 30th April 2025 Lords Chamber

[Lord Sandhurst (Con)]

My Lords, traditionally, English common law has recognised two forms of property: tangible things in possession and intangible things in action, such as debts and shares. However, as we have heard, with the rise of digital assets such as crypto- currencies, tokens and non-fungible tokens we encounter items that do not fit neatly into either category. These assets are becoming essential in modern commerce, and it is vital that English law remain at the forefront of international trade, safeguarding London’s position as a legal and financial hub.

The Law Commission looked at this and proposed a third category of property to accommodate such digital innovations, allowing for legal evolution without imposing rigid definitions that might exclude future technologies. The commission emphasised that statutory intervention must not undermine the existing legal clarity or introduce unnecessary complications. The flexibility of English common law is a strength; it has already adapted to address key questions in the digital sphere. The current regime offers a balance of predictability and adaptability, making our jurisdiction well positioned to lead in this space.

The Bill the commission drafted, which is now before us, does just that. We have tested it thoroughly in Committee. I have listened carefully to the concerns raised by my noble friend Lord Holmes of Richmond, and while I recognise them, the Bill has been carefully drafted and it is not necessary to amend it—save for Amendment 6, which we will come to later.

Addressing Amendments 1 and 2 in a little more detail, it will be for the courts to develop the law on the treatment of this category or to widen existing categories—whichever way one wishes to look at it. The proposed wording of Amendment 1 goes too far. The Bill’s wording is elegant and encompasses digital assets, which are not easily categorised in the conventional classifications. It also encompasses other things not yet contemplated or in our imagination but which, when they do come into existence, will be thought by the courts to deserve rights. That is what the Bill is doing; it is expressly not limited by over-definition. It achieves protection for these as yet unimagined things, while making it clear that existing digital assets will be protected.

We would be bold to depart from the views of Professor Green, chair of the Law Commission report, who is very hostile to this sort of amendment. When asked about one such suggested amendment, she said:

“That would really take away the whole bite of the Bill … the whole mischief that it addresses is that we no longer have to be stuck with these categories”.


Therefore, we cannot support Amendments 1 and 2.

Turning to Amendment 3, on codes of practice, we follow the reasoning which I have outlined. Any code of practice risks definitions which do not accommodate a new type of activity or entity outside its scope, but which is worthy of protection. Equally, the code might suggest that property rights be given to an activity which, after the detailed investigation that a trial can give, a court rightly decides should not be so protected. It is best left to the courts, which will receive evidence, hear arguments from competing parties and be able to resolve those matters. The six-month period is too soon. If the Law Commission had thought this a good idea, it could have said so. It is contrary to the tenor of its lengthy report. If the Act would, in five years’ time or whenever, benefit from amendment, it should be done with the benefit of hindsight and experience. Meanwhile, such amendment is premature.

[The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)]

My Lords, I thank the noble Lord, Lord Holmes, for raising these issues. They get to the heart of the Bill: whether there is a need to recognise a further category in statute, and whether it is helpful to provide further guidance to the courts on the attributes to consider.

On the first of these points, the Government’s firm view is that the Bill’s current approach is the right one. Some stakeholders hold to the two-category view and say that there can be no further category beyond things in action and things in possession. This view is understandable but has its roots in history, including in an influential statement in a 19th-century case. That statement was made at a time when assets such as crypto tokens simply could not have been conceived of. The world has moved on, and the law needs to move on with it.

The Special Public Bill Committee heard from stakeholders who would prefer to see these emerging assets categorised as things in action, on the basis that their approach would give more legal certainty. However, the need for new solutions is the result of the unique features of these assets and not of their categorisation. For example, the existing rules on transfer of things in action, or on remedies for interference in things in action, are simply not adequate for assets such as crypto tokens. Either way, the law, through the courts, will have to respond to their new features.

The Bill is the result of a three-year project by the Law Commission during which all arguments, including the arguments in favour of this amendment, were considered in full. A strong majority of consultees to both consultations undertaken by the commission expressed a preference for a further category. Most respondents to the committee’s call for evidence also supported this approach. This approach came from a wide range of stakeholders—from legal professionals to industry bodies and academics.

Another advantage of the Bill’s approach is that it is technologically neutral. As the noble Lord, Lord Sandhurst, excellently put it in Committee, the Bill

“encompasses other things not yet contemplated or in our imagination”.—[Official Report, 3/2/25; col. 16.]

The Bill future-proofs our law in the way the other two categories do not. As Professor Green put it in her evidence, as quoted by the noble Lords, Lord Holmes, Lord Clement-Jones and Lord Sandhurst,

“the whole mischief that it addresses is that we no longer have to be stuck with these categories”.

By removing any uncertainty around a possible further category, we will give the courts the freedom to develop our common law. This approach allows them to consider and respond to the unique features of digital assets, and other assets that we cannot yet foresee.

This flexibility is also relevant to the question raised by Amendment 3: whether the Secretary of State should publish codes of practice about the attributes of digital things that confer personal property rights. The Government’s view is that requiring the publication of codes of practice could undermine the flexibility that the current drafting affords the courts. The Law Commission considered the features of assets that have characteristics of property but do not fit into the existing categories. However, City law firms, senior barristers, financial industry groups and crypto industry groups gave clear feedback that a more detailed statutory provision incorporating these features could be counter- productive.

The Government are concerned that the same issues could stem from publishing a code of practice. It could create unhelpful boundary challenges, lead to undue complexity, and prevent the common law being able to respond flexibly and dynamically to new technologies and unforeseen challenges. This feedback was reflected in some of the written evidence submitted to the Bill Committee.

As noble Lords will remember, the Bill Committee was firmly in favour of maintaining the Bill’s current approach. My noble friend Lord Stansgate got to the heart of the matter when he said:

“The whole point of the Bill is to set out something relatively simple, to take into account new technology and to enable judges to develop common law”.—[Official Report, 3/2/25; col. 19.]


As the noble Lord, Lord Sandhurst, so eloquently put it:

“The relative silence of the current Bill is golden”.—[Official Report, 3/2/25; col. 20.]


The Bill deliberately does not try to define the types of assets that may fall within its scope. Rather, it unblocks the common law and leaves it to the courts to develop the appropriate principles, building on centuries of world-renowned common-law development. By doing this, English and Welsh and Northern Ireland law can remain dynamic, globally competitive and a useful tool for those in the digital asset market. I ask the noble Lord to withdraw his amendment.

--- Later in debate ---

[Lord Sandhurst (Con)]

My Lords, an impact assessment is not practicable, whether in six months’ or three months’ time, we respectfully suggest. It would be premised on too many uncertainties. What we know is that the Bill will do no harm and is likely to do good. We have, if you like, the theoretical impact assessment of the Law Commission, which looked at all the issues in great detail. So, I suggest that we do not need this amendment, and we would not support it.

As to Amendment 5, six months’ time is, again, with respect, too short. I would suggest in parentheses that a review in five years’ time to see whether it is useful, whether it needs further amendment, how it is operating and what the effect is on the London market and litigation in London, could well be of value. Whether it needs a formal assessment or not is something that can be looked at four years down the road, but this is early days. We simply do not know enough. With respect to my noble friend, a review in a few months’ time will not help us at all. We do not support the amendment.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, at the outset, I acknowledge the long-standing advocacy for technological innovation of the noble Lord, Lord Holmes. I also pay tribute to his deep commitment to ensuring that our regulatory framework is fit for purpose in an increasingly digital world.

These amendments would mandate reviews of the impact of digital assets being treated as property by virtue of the Bill’s provisions. One amendment requires the Government to publish an economic impact assessment of the Bill on the day the Act is passed. As noble Lords will know, the Government published an impact assessment when introducing the Bill. I hope it will assist and reassure noble Lords if I highlight some of the most salient points.

As the impact assessment sets out, the Bill is expected to bring clarity to personal property law, reduce uncertainty for businesses and ensure England, Wales and Northern Ireland remain leading locations in which to innovate. Due to limited data, it is very hard, if not impossible, to quantify these benefits. However, we think the Bill will help ensure our laws remain competitive on an international stage.

The impact assessment considered the potential for the Bill to encourage the use of digital assets. However, this impact is highly debateable, given the Bill merely confirms the position that has been gradually emerging through case law in recent years. It is not expected or intended that the Bill will cause a significant increase in uptake of digital assets.

The same amendment calls for the impact assessment to cover the estimated change in demand for, and use of, digital assets. The assessment would also have to cover data centre power usage, the current level of data centre power provision and its ability to meet any increase in demand for digital assets. This follows on from the points the noble Lord, Lord Holmes, made in Committee. He mentioned that he would like to hear that the Government are committed to data centres being fuelled through renewable energy and a discussion around where data centres would be located, given the value they can bring to the country. Although these are important points, they sit outside the remit of the Bill.

I say to my noble friend Lord Stansgate that whether a data centre is in space or not is also outside the relevant part of the Bill.

Furthermore, it would likely be impossible to accurately estimate the long-term effect of the Bill on data centres. There are many greater influences on these areas, such as cloud computing, AI and general data storage. This will make it extremely difficult to assess the impact of the Bill. Therefore, such a review could result in speculative or misleading conclusions.

The other amendment calls for reviewing the

“need for further regulation of stablecoins and tokenised deposits”

within six months of the Act passing. Here, I reiterate that the Bill does not specify how the courts will treat these particular digital assets. If they were considered personal property under the Bill, this would not affect the need—or not—for regulation. The Bill deals only with a discrete matter of private law. Therefore, the proposed review is unlikely to yield any meaningful conclusions.

Moreover, issues around regulating stablecoins and tokenised deposits are already being addressed. The Government’s forthcoming financial services regulatory regime of crypto assets will include a new regulated activity for stablecoin issuance in the UK. Overseas-issued stablecoin will be regulated in the UK in line with other crypto assets. This will ensure that the Financial Conduct Authority can properly manage stablecoin-specific risks.

In addition, the Prudential Regulation Authority has published its views on the risks associated with tokenised deposits and how it expects banks to address those risks. Where tokenisation does not change the underlying economics and fundamental nature of a depositor’s claim, the PRA’s prudential regulatory framework will treat a tokenised deposit similarly to a traditional deposit. Where banks intend to take tokenised deposits from retail customers, the PRA expects this to be done in a way that meets the PRA’s rules for eligibility for depositor protection under the Financial Services Compensation Scheme.

The Bill takes a minimalist approach to achieve the specific aim of unblocking the common law on personal property. While I am very pleased that I have had the opportunity to debate these amendments, the Government fear that they could cause unnecessary bureaucracy and regulatory duplication, which could increase uncertainty rather than alleviate it.

As set out already, we think there are significant benefits of the Bill, such as bringing clarity to English, Welsh and Northern Irish law and keeping it world leading. We will, of course, monitor those benefits closely in the future. Given that, I ask the noble Lord to withdraw his amendment.

[Lord Holmes of Richmond (Con)]

My Lords, I thank all noble Lords who have contributed to this brief debate and say, again, “Job done: mission accomplished”, on the record, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Sandhurst (Con)]

My Lords, we support this amendment, for the reasons advanced by my noble friend Lord Holmes. I, too, add my thanks to the noble Lord, Lord Anderson of Ipswich, for all the hard work which he put in and to our excellent clerk, Matthew Burton. It is a pleasure now to see this Bill reach a happy conclusion, I hope.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, this amendment seeks to restate the Long Title of the Bill, and I have put my name to it as the noble Lord, Lord Holmes, said. The amendment was tabled by the noble Lord but was suggested by Adam Temple, a senior barrister who specialises in financial services, when he gave evidence. This amendment addresses a slight discrepancy between the wording in the Long Title and the Bill’s operative clause. This discrepancy in wording came about following the Law Commission consultation on the draft Bill, which led to Clause 1 being amended to address concerns that it could be read as providing that any thing was capable of being personal property. That is not the intended effect of the Bill. Therefore, the wording changed from saying that a thing may be capable of being an object of property rights to instead saying that a thing is not prevented from being the object of personal property rights merely because it does not fit into the traditional categories of things in possession or things in action.

At the time of drafting, the Law Commission did not feel it was necessary to make a corresponding change to the Long Title. However, several noble Lords raised concerns about this discrepancy during our Committee debate and asked the Government to consider it further. Having reflected carefully, we are satisfied that making this change will not have any substantive effect. We are therefore content to accept this amendment so that the Long Title is consistent with the operative clause of the Bill. I end by thanking the noble Lord for his constructive discussions on this point. As for thanking noble Lords, I will leave that to the last stage of the Bill.

Amendment 6 agreed.

Property (Digital Assets etc) Bill [HL]

Lord Ponsonby of Shulbrede Excerpts

3rd reading
Thursday 8th May 2025 Lords Chamber

Moved by

[Lord Ponsonby of Shulbrede]

That the Bill be now read a third time.

[The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)]

My Lords, I would like to provide an update on the territorial extent of the Bill. The focus of the Bill is on clarifying personal property law, which is devolved to Northern Ireland. I am pleased to confirm to the House that the Northern Ireland Assembly has granted consent for the Bill’s extension to Northern Ireland. I beg to move.

Motion agreed.

--- Later in debate ---

Moved by

[Lord Ponsonby of Shulbrede]

That the Bill do now pass.

[The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Ponsonby of Shulbrede) (Lab)]

My Lords, it is a pleasure to speak to this Bill, which colleagues will know has undergone extensive scrutiny by the Special Public Bill Committee since its introduction in September. The Bill underscores our commitment to fostering innovation, both now and in the future. It supports our efforts to ensure that the jurisdictions of England and Wales, and of Northern Ireland, remain at the forefront of jurisdictions globally, providing a flexible legal framework for digital assets that can react to their dynamic nature and to technologies not yet imagined or created. By modernising the law of personal property, it will enable more efficient dispute resolution by removing the need for courts to discuss questions around categorisation. It will also attract international businesses to use these jurisdictions and promote economic growth.

I take this opportunity to thank those who have engaged with and supported the passage of the Bill, starting with the noble Lord, Lord Anderson of Ipswich, who chaired the Special Public Bill Committee. He expertly led us through some very nuanced and technical issues, and I also thank the committee’s clerk, Matthew Burton. That leads me on to thanking the other members of the committee, the noble Lords, Lord Bassam, Lord Cryer, Lord Shamash, Lord Sandhurst and Lord Holmes, the noble Viscount, Lord Stansgate, and, last but not least, the noble Lord, Lord Clement-Jones. I am certain that each has found the process as fascinating as I have, and I enjoyed playing a part in ensuring that our law continues to be fit for purpose in an increasingly technological world.

I give particular thanks to the noble Lord, Lord Holmes, who raised many interesting areas for the committee to consider and helped to ensure that the Bill passes through the House of Lords in its best possible form. I must also thank the Law Commission, which undertook two extensive consultations as part of its project on digital assets. In particular, I thank Laura Burgoyne and Chris Long, who did an excellent review that helped the Government make a fully informed decision to take the Bill forward. I also thank my private office—Melissa Leonard—and the Bill team: Bill manager Harry McNeill-Adams, Susannah Keogh, Alicia Love and Jonathan Fear. I am hugely grateful to all those who contributed to the evidence collected by the committee, both written and verbal, and ensured that the committee could fully assess the Bill and that the best possible version of it is going to the other place.

The result of these efforts is a simple but elegant Bill. It will support our efforts to remain a pre-eminent jurisdiction, with English and Welsh law and Northern Irish law being the global law of choice. It will signal that the UK is a leader in innovation and technology. It is important that the Bill passes into law as quickly as possible, so we can capitalise on this. We pass this Bill on in excellent condition, and I hope that it can complete its passage and become law as swiftly as possible. I beg to move.

[Lord Anderson of Ipswich (CB)]

My Lords, as the noble Viscount, Lord Stansgate, who is not in his place but currently on the Woolsack, said on Report, the two clauses of this Bill fully reflect neither the nearly 1,000 pages of learning that the Law Commission produced on the subject of digital assets, nor the almost equal volume of written and oral evidence received by the Special Public Bill Committee, variously approving the Law Commission’s approach and characterising the Bill as pointless or even dangerous. That the Committee, which I chaired, was able to consider these issues and debate them out with a degree of thoroughness in the Moses Room prior to a further debate, largely thanks to the noble Lord, Lord Holmes, on Report, is a tribute to our clerk, Matthew Burton, and all members of the committee—including not least the Minister—whose collective expertise was remarkable.

My only remaining concern is that, since the committee was entirely lacking in female members, it is entirely possible that we have succeeded in missing something obvious. The work of this House is now complete. I was delighted to hear just now that the Bill has been endorsed in Northern Ireland, and I wish it well on its onward journey.

--- Later in debate ---

[Lord Sandhurst (Con)]

My Lords, this was indeed a fascinating Committee in which to participate. I have no doubt that this effectively one-clause Bill will make an important contribution to the development of the law in a fast-developing field and assist judges and litigants in ensuring that necessary protection is given to activities and things in the digital sphere—including those as yet unimagined—which might otherwise fail to be protected. It is important for fintech, as we have heard, and it is very important for the City of London in retaining its place in the financial world in which we live.

The evidence we heard from interested parties, not just lawyers, raised a body of issues which took some digesting, and my noble friend Lord Holmes raised important questions. However, under the clear and thoughtful guidance of our distinguished chair, the noble Lord, Lord Anderson of Ipswich, we found, with little disagreement, that—apart from a small change to the Bill’s title—we should leave it well alone. The Law Commission is to be congratulated on its hard work and on reducing a vast body of material to this very crisp Bill. We found it small but perfectly formed.

In all this process, we had the inestimable help of the committee clerk, Matthew Burton, to whom I am most grateful, not least for his excellent summary of the evidence and issues to help our final deliberations. It is with no hesitation that we on this side commend this Bill and hope it will be passed swiftly.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, I am glad that the Bill has the support of all noble Lords who have spoken. I note that three Whips are sitting in my presence, and I am sure they will have heard the comment from the noble Lord, Lord Anderson, on the lack of female members of the committee and will see whether we can do better next time. I will write to the noble Lord, Lord Clement-Jones, on his questions, as I am unable to answer them right now. The noble Lord, Lord Holmes, asked about the schedule. I also cannot answer that question, but I suspect it will go down very soon. If there is any update, I will provide it to him.

I conclude in the spirit of agreement and endorse the point made by the noble Lord, Lord Sandhurst, that this is a small but perfectly formed Bill, but it will have one hell of an impact. We want to make sure that it makes the best possible impact. I beg to move.

Bill passed and sent to the Commons.