The Law Commission, an agency set up by Parliament, has already carried out its initial research on Smart Contracts, identifying blockchain technology as a significant area that is seeing uptake, especially in the financial services world. The paper stated:
“there is a compelling case for a Law Commission scoping study to review the current English legal framework as it applies to smart contracts.”
In the UK almost 80 percent of the national Gross Domestic Product (GDP) comes from the service sector, with finance and banking being one of it’s top industries, since London is the world’s largest financial centre.
The Law Commission believes that blockchain technology has the advantage of increasing “trust and certainty” and boosting transaction efficiency among businesses, the report states:
“It is important to ensure that English courts and law remain a competitive choice for business.”
This is not the agency’s first look into blockchain technology and the law, in December 2017 a preceding report was published by the Law Commission that listed smart contracts among 14 new areas of law set for reform.
The initial report estimated that the smart contract research process could take 9–18 months to complete. At the time, the commission had several questions about how the technology would interact with current law contract concepts.
The fast pace of the nascent technology has seen even the most senior judge in whole of the U.K. support reform. The Lord Chief Justice for England and Wales, Baron John Thomas, stated at a lecture hosted by the Law Commission:
“Certainly, the European Commission takes the view that legislative change will be needed to deal with new forms of contract such as the blockchain and smart contracts. I have no doubt that we must consider whether our law (as it will then be) will need similar legislative updating.”
The Law Commission has begun a formal project to advise on how to adapt the current legal system to accommodate smart contracts. To this end the Law Commission states:
“There is a serious intention to take forward reform in this area,”
Blockchain is increasingly a subject for discussion in Parliament, earlier this month a report was released to MPs, on the recommendation of Prime Minister May, urging government to appoint a Chief Blockchain Officer and stating that blockchain technology can save the UK government £8 Billion.