The UK Jurisdiction Taskforce (a taskforce of the Law Society’s LawTech Delivery Panel) has published a statement on the legal status of cryptoassets and smart contracts, following a public consultation. Its two key findings are set out below, but these have not yet been tested in the English courts and stakeholders are likely to want to see appropriate legislation and regulation brought into force to address these issues.
- Cryptoassets have all the legal characteristics of property and are, as a matter of English legal principle, to be treated as property. This conclusion is likely to have important consequences in areas relating to succession on death, the vesting of property in personal bankruptcy and the rights of liquidators in corporate insolvency.
- Smart contracts are capable of satisfying the requirements of English law contract formation principles and can therefore be interpreted and enforced using ordinary and well-established legal principles. Further, a statutory signature requirement is highly likely to be capable of being met by means of a private key encryption.
The Court of Appeal has upheld the High Court’s decision on an agreement that purported to assign the copyright in songs written by Bob Marley from his record company at the time, Cayman Music Inc (Cayman), to Island Logic.
Marley had misattributed 13 songs (including the hit No Woman No Cry) to other artists as a way of preventing the relevant copyright and royalties from going to his record company under a recording agreement. The key question before the court was whether the songs were included within the agreement.
The High Court held that the songs were “compositions” within the terms of the agreement, so that the rights in the songs were transferred under that agreement, even though the agreement did not expressly refer to the songs. The Court of Appeal upheld this decision.
The case shows how important it is to draft contracts precisely, particularly in the context of a complex set of background facts.
Many employers have substance misuse policies or contractual clauses in employee contracts that give them the right to test their staff for drug misuse, particularly where staff are operating machinery or driving vehicles.
Whilst staff cannot be made to take a drugs test it is common that disciplinary action may follow if they refuse.
Four of the major drug screening providers have recently confirmed significant rises in the number of tests they conduct every year, and reports indicate that smaller businesses, including retail, are choosing the test their staff too, including testing for legal highs as well as the more traditional drugs.