Mr Will Forster

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. We know that digital assets can also present risks, particularly fraud, volatility and abuse, but we cannot ignore them; we must face them head on. We need a modern legal framework that bolsters confidence in our economy and in the use of digital assets, and supports the rule of law. The Bill is clear, well written and makes doubly sure that UK law remains relevant in the digital world. It is supported by the Law Society, by legal practitioners and by the Liberal Democrats. I urge colleagues on all sides of the Committee to support its passage.