The Law Commission’s “third category”: welcomed but look to the futur

Written by James Ramsden KC, and co-founder of Astraea Group

In its consultation paper on digital assets, the Law Commission provisionally proposed that the law explicitly recognises a “third category” of personal property that could accommodate digital assets. Following the consultation, the Commission has published its final paper, containing its final recommendation on this third category. The provisional proposal is largely unchanged, except that the boundaries of the third category are set no longer by hard “criteria” but by softer “indicia”. The recommendation of a third category, and the shift from criteria to indicia, have attracted much attention and are both welcome. But, as for the crypto litigation that is regularly before the courts in this jurisdiction, the Commission’s future work will be more impactful.

The third category aims to resolve uncertainty as to where digital assets fall in the categories of property recognised by the law of England and Wales. Traditionally, the law has divided personal property (i.e. property other tha…