The Law Commission has launched a consultation on how to resolve cross-border disputes in the era of digital assets.

As the consultation explains, where disputes have a cross-border element questions quickly arise as to where the dispute should be litigated, which country’s law should apply, and how a judgment can be enforced in another country. Private international law has traditionally resolved these questions by placing emphasis on geographical location, asking questions such as where the property is situated or where the damage occurred.

However, these tests are of limited utility in a world of distributed ledger technology (DLT) where there is often a network of computers located in different jurisdictions around the world.

As the Law Commission puts it, certain uses of DLT pose “a direct challenge to the territoriality principle on which modern systems of private international law is premised and which its rules reflect”. The consultation paper goes on to explain that “use of DLT can mean that the act, event, or object does not simply exist “nowhere”, but arguably exists “nowhere and everywhere, at the same time.” It therefore becomes harder to resolve conflicts of jurisdictions and of applicable laws because there is no connecting factor that convincingly points to a single national court or single national system of private law as the clear “winner” over each of the others”.

In practice, this can mean that litigants who, for example, seek to recover crypto tokens that have been stolen face significant challenges in bringing and pursuing their case in the courts of England and Wales.

The consultation examines some of the recent cases in this area, before going on to propose a series of recommendations aimed at reaching legal certainty and ensuring such litigants have access to justice.  Proposals include (i) new rules on which is the most appropriate court to hear a cross-border property claim aimed at the recovery of a crypto-token, (ii) the introduction of a new power of the courts to grant ‘free-standing information orders’ in cases with a ‘digital and decentralised context’ where either the use of pseudonyms or the difficulty in tracing misappropriated assets means that it can be difficult to bring a claim, and (iii) a new approach to how the courts should determine which law should be applicable in a particular case, setting out a range of factors that should be considered.

The consultation closes on 8 September 2025, and can be read in full here.