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By Andrew Steven, Professor of Property Law, University of Edinburgh
Economic importance
In 2021 international trade was worth approximately £1.266 trillion to the UK. The moving of goods across borders still heavily relies on paper documents and practices which developed centuries ago. A trade finance transaction typically involves 20 entities and between 10 and 20 paper documents, totalling over 100 pages. Recent technological developments have enabled the use of secure forms of electronic documents. But the law requires to catch up.
By David Fox, Professor of Common Law, University of Edinburgh
If the law is to recognise digital assets as property for private law purposes, then it would benefit from analysing them as composite things. The asset is more than mere data. It is a set of transactional functionalities. The most important of these is the capacity of the person who holds the private key to effect new transactions which will be recognised as valid by the technical rules of the system. Analysed in this way, the asset can be viewed as a specific transactional power over unique data entries on the ledger.
By Andrew Steven, Professor of Property Law, University of Edinburgh
In Scotland, the law of rights in security develops slowly. There are reasons for this. First, there is limited legislative time for reform of private law. Second, it is an area which has been relatively neglected in terms of doctrinal study. Third, we are a small jurisdiction and case law is limited.
Nevertheless, there are some grounds for optimism. The Scottish Government’s legislative programme for 2020/21 published on 1 September contains a commitment to “work towards implementation of the Scottish Law Commission proposals on reforming the law relating to Moveable Transactions, with a view to introducing a Bill early in the new Parliament” and accepts that this would “make it easier for businesses and individuals to raise finance, thereby assisting economic recovery”. The last month has also seen the successful defence by Andrew Sweeney of his University of Edinburgh doctoral thesis on the landlord’s hypothec. In addition, an earlier Edinburgh thesis on floating charges by Dr Alisdair MacPherson, now Lecturer in Law at the University of Aberdeen, has been published in book form.#
By David Fox, Professor of Common Law, University of Edinburgh
It is a commonplace to say that technological development runs ahead of the law. Financiers and IT developers have created new kinds of tradeable value and entirely virtual systems for trading them. Any thought about their status in law comes only later, often prompted by an insolvency or by the failure of one of the parties to perform as expected.
The question that then arises is what, if any, law applied to those assets and systems. Very likely, the parties gave no deliberate thought to the question.
