UK Government researches use of Blockchain smart contracts in Law.

In order to update the British law and make it capable enough to face the challenges of the developing technology, the UK Law Commission has currently decided to codify the use of smart contracts in the British Law.

UK Government Report

The Commission’s 52nd annual report covered the period from April 1, 2017, to March 31, 2018, in which, a proposal to create an effective legal framework under the UK law for smart contracts was a part of the  Commission’s Thirteenth Programme of Law Reform. Including automated vehicles, residential leaseholds, surrogacy and smart contracts, the report highlights fourteen areas of legal research approved for reform. Former Lord Chancellor Rt Hon David Lidington MP approved those areas for reform.

As a result of an indication from the Ministry of Justice, parallel to the Law Commission Act 2009, a suggestion to consider creating a legal framework for smart contracts came about. The motivation to recognize and regulate smart contracts goes along with the UK government’s wish to “promote Global Britain in the field of legal services.” With the project set to fully begin in Summer 2018, the initial work on the research and policy formulation started in Spring 2018.

Smart Contract

The report defines Smart contracts as a technology that runs on blockchain through which legal contracts may be executed automatically or in parts. The report states, “The use of smart contracts to execute legal contracts is expected to increase efficiency in business transactions and it is suggested that the use of blockchain technology will increase trust and certainty. It is important to ensure that English courts and law remain a competitive choice for business. Therefore, there is a compelling case for a Law Commission scoping study to review the current English legal framework as it applies to smart contracts. The purpose of this project would be to ensure that the law is sufficiently certain and flexible to apply in a global, digital context and to highlight any topics which lack clarity or certainty.”


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