Property (Digital Assets etc) Bill [Lords]

[Judith Cummins in the Chair]

Clause 1

Objects of personal property rights

Question proposed, That the clause stand part of the Bill.

With this it will be convenient to discuss clause 2 stand part.

I remind Members that in Committee they should not address the Chair as Mr or Madam Deputy Speaker, but use our names. Madam Chair, Chair or Madam Chairman are also acceptable.

It is a pleasure to serve under you, Madam Chair.

I am pleased to open this discussion on the clauses of a focused but important Bill, designed to drive innovation, enhance legal certainty, and strengthen our standing in the global digital economy. Let me turn first to clause 1—an unassuming clause on the page, but one with important implications for the future of our legal system and our economy.

Clause 1 is the engine room of the Bill. It provides a clear and powerful statement: that a thing—including something digital or electronic—can be recognised as personal property, even if it does not fall within either of the categories that our legal system has traditionally recognised. For centuries the law has drawn a simple line: personal property was either a “thing in possession”, that being a physical object such as a car or a watch, or a “thing in action”, something that exists because the law says it does and is enforced through legal action, such as a debt or a contractual right. However, the world has changed. Technology has leapt forward, and our law must keep pace. Today we have assets such as crypto-tokens. They are not physical objects, yet their existence is not reliant on the law. They do not fit comfortably into either of the traditional categories.

Our courts have begun to acknowledge that such assets can and should be the subject of property rights, but without a clear, binding legal foundation, uncertainty remains—uncertainty that could stifle innovation, deter investment, and push the digital economy elsewhere. This Government will not allow that to happen. Driving sustainable growth is a top priority for us, and that means giving businesses and investors the certainty that they need to thrive. With this single clause, we are removing doubt and sending a clear message: we are open for business in the digital age.

By removing ambiguity, clause 1 ensures that those who hold or transact in digital assets are better supported to defend their property rights, transfer them and recover them when it matters most. The Bill reinforces our position as a global jurisdiction of choice for legal innovation, emerging technology and the digital economy. We are leading from the front. To be clear, clause 1 does not attempt to draw rigid lines around what qualifies as property—that is a deliberate choice. It rightly empowers our courts to continue developing the common law, case by case, applying centuries of legal wisdom to the frontiers of a digital economy. The reference to “digital or electronic things” in the Bill simply reflects where the issues most commonly arise today, without boxing in where the law might go tomorrow. The clause paves the way for fairer outcomes in cases of theft, fraud, commercial dispute or insolvency involving digital assets. It will reduce litigation costs, promote market stability and underpin our reputation as a jurisdiction of choice in a digital world. This is a small clause with big consequences. It is a bold, forward-looking step that reaffirms our commitment to legal certainty, technological progress and global leadership.

I am pleased to speak again on behalf of the Opposition as we carry forward the constructive debate that we had on Second Reading.

Let me restate from the outset our support for the Bill, which represents a careful, modest step in the right direction, and preserves the inherent flexibility of the common law while giving just enough statutory certainty to ensure that businesses, innovators and courts know the ground beneath their feet. That balance is vital. If we over-prescribed in statute, we would risk freezing progress. If we left matters entirely to the interpretation of the courts, we would risk fragmentation and delay. The Bill avoids both extremes.

Importantly, this legislation was not born overnight. It is the product of the rigorous work of the Law Commission—work commissioned by the last Conservative Government, who recognised early the need for clarity in this space if the UK was to stay competitive internationally. The commission’s conclusion was clear: certain digital assets simply do not fit neatly into the centuries-old categories of things in possession or things in action. Without intervention, the risk grew that uncertainty would hold back investment, undermine commercial transactions and frustrate innovators and consumers.

The Bill answers that challenge in the right way. It does not attempt to define every kind of digital asset that might emerge. Nobody in this Chamber—or indeed beyond it—can predict the full scope of the technologies that will shape our financial and commercial future in the coming decades. Instead, the Bill does something both restrained and profound: it confirms that digital things are not excluded from attracting property rights merely because they fall outside the old categories. Beyond that, it gives our common law the space it needs to continue doing what it has done for centuries: develop sensibly, case by case, guided by principle rather than by prescription.

It is a pleasure to speak once again in this Chamber on the Property (Digital Assets etc) Bill, which creates a modern legal framework that will allow Britain to take every opportunity we can while protecting ourselves in an ever-changing digital age.

The Liberal Democrats support clause 1. It states that a “thing”—including a digital or electronic thing—will not be deprived of legal status as an object of personal property rights merely by reason of the fact that it is neither a thing in action nor a thing in possession. The clause responds to the development of new types of assets such as crypto-tokens, which challenge the traditional categories of property. I am grateful to the other place for scrutinising this legal framework incredibly well. As a result, we have a fine piece of legislation to discuss.

The digital world is often mired in legal ambiguity about how common-law systems treats digital assets. At present, the law recognises two primary forms of personal property: things in possession and things in action. However, digital assets, which cannot be physically possessed and often do no count for a claim against another person, do not really fit easily into either category. The need for clarity is imperative. We risk undermining individual rights and weakening legal solutions in cases involving cryptoassets, non-fungible tokens and other digital holdings.

The Bill goes far in ensuring that digital things are not denied property status simply because they do not fall into the normal categories. Consequently, we also support clause 2, as it requires the Secretary of State to publish codes of practice on the attributes of digital things that confer personal property rights. The clause aims to provide guidance to the courts on how to assess whether a digital asset is the object of personal property rights.

The Liberal Democrats welcome the Government’s decision to accept the Law Commission’s recommendations. Financial Conduct Authority figures indicate that nearly 12% of UK adults now hold cryptoassets—I know because constituency cases are raised with me when things go wrong—and that figure has more than doubled since 2021. However, victims of fraud, people seeking restitution in insolvency, or simply those wishing to assert ownership over what they rightfully hold, have been operating in a murky legal landscape. The Bill leaves room for the common law to develop in that sphere of property. That will help the law to reflect the evolving nature of technology, but it must be monitored over time to ensure that regulation ultimately aligns with the need to protect individual rights and support our economy.

I call the Minister to wind up the debate

With the leave of the Committee, I give my sincere thanks to the hon. Members for Bexhill and Battle (Dr Mullan) and for Woking (Mr Forster). It has been a pleasure to discuss the clauses in more detail, and it is good to see constructive consensus about a piece of legislation. I think we all agree that it brings legal certainty, keeps pace with legal innovation, is proportionate, and meets the moment, with the growth of cryptocurrency and other related industries. I thank all those who have contributed to this important debate.

I beg to move, That the Bill be now read the Third time.

Let me I start by reiterating my sincere thanks to Members of this House and the other place for their support and insightful contributions. I am particularly grateful for the support expressed on Second Reading by the hon. Members for Bexhill and Battle (Dr Mullan) and for Woking (Mr Forster), and all Members who have contributed throughout the passage of the Bill. Their engagement demonstrates strong, cross-party momentum behind modernising our personal property law.

I also pay tribute to the former Special Public Bill Committee, which gathered expert evidence and was ably led by Lord Anderson of Ipswich. The Law Commission deserves particular recognition for its exemplary work, led by Laura Burgoyne and Christopher Long, and on which this Bill stands. Their engagement with stakeholders has been gold standard and demonstrated the benefits of coherent law reform—transparent, expert-led and deeply consultative. I would also like to thank the former law commissioner Professor Sarah Green for her contribution to this work and for giving evidence at Committee.

Lastly, I put on record my thanks to the officials who have worked tirelessly on this Bill. I thank my policy officials, Alicia Love and Jonathan Fear, the Bill managers, Harry McNeill-Adams and Lily Sullivan, and Helen Hall from the Office of Parliamentary Counsel. I also thank my private office, in particular my private secretary, Amelia Overton, and Meheret Ashenafi.

This is more than a Bill; it is a landmark step towards ensuring that the law of England and Wales, and Northern Ireland, not only keeps pace with innovation but leads it. The Bill will give digital pioneers the certainty they need, backed by the legal strength they expect from our country. It shows that our economy is open, our ambition is global, and we are here to support innovation. By supporting the recognition of digital assets as property, the Bill helps establish legal certainty.

I rise simply to put on the record my thanks, particularly to the Bill Committee and to the Law Commission for its diligence. Yet again we see the great benefit that our state machinery and apparatus as whole derive from having the Law Commission. I have nothing further to add.

I thank colleagues from across the House. It is a good example of cross-party working, delivering a Bill that has been well-scrutinised and is fit for purpose. In that spirit, I hope that the Minister can take that away and encourage her colleagues to do the same with other legislation.