Data Objects: A New Class Of Personal Property in English Law?

The UK Law Commission is recommending changes to English law to better recognise and protect digital assets, especially crypto-tokens. The Commission uses the term 'cryptoasset' to mean "a composite of a crypto-token and any associated or linked property or other legal rights that are recognised in law as existing as a consequence of having legal rights in relation to that crypto-token." Consultation responses are invited by 4 November 2022. If you have queries concerning the consultation, please get in touch.

The key recommendation is the recognition of "data objects" as an additional form of personal property to "things in possession" and "things in action". The criteria for a digital asset to qualify as a data object would be: 

1. it comprises data represented in an electronic medium, including computer code, electronic, digital or analogue signals; 
2. its existence is independent of any person and the legal system; 
3. it is 'rivalrous' (consumption by one person prevents simultaneous consumption by another). 

Among digital assets such as files, records, email accounts, in-game digital assets, domain names, carbon credits, the Commission considers that only crypto-tokens (as distinct from the broader concept of a cryptoasset) would qualify as "data objects". 

The Commission stops short of recommending possessory rights in data objects, but recommends developing the concept of "control" through the courts, since a person in "control" of a data object can exclude others from it, use it, transfer it and identify themselves as the person able to do these things. 

The paper includes an extensive discussion of the consequences of expanding the law of personal property in this way; and how existing law would apply to data objects.  

Update: 

Interesting to consider in this context the government's Bill to include "digital settlement assets" and related service providers within the scope of existing financial services regulation.