On 30 July 2024, the Law Commission published a supplemental report and draft Bill that, if implemented, would confirm the existence of a third category of personal property into which certain digital and other assets could fall. This follows the publication in June 2023 of the Commission’s final report on digital assets, which set out recommendations for reform and development of the law on digital assets.
The June 2023 report concluded that certain digital assets, including crypto-tokens and non-fungible tokens, are capable of attracting personal property rights. However, because they are fundamentally different both from physical assets, and from rights-based assets like debts and financial securities, they do not fit within traditional categories of personal property. The Commission therefore recommended that legislation should confirm the existence of a ‘third’ category of personal property.
The draft Bill, which was consulted on in February 2024, makes clear that a thing is not prevented from being the object of personal property rights merely because it is neither a thing in action nor a thing in possession. The wording (but not the substance) of the draft Bill has been amended in response to points raised during the consultation.
The Commission’s recommendation and the draft legislation, along with the other recommendations made in the Commission’s June 2023 report, are now being considered by the Government.