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The Law Commission’s Programme of Reform

Posted on 18 December 2017 by Laura Godfrey

The Law Commission’s Programme of Reform

Following a consultation, the Law Commission has set out its plans for the next three years to explore areas of law which require reform including residential leasehold, chancel repair liability and smart contracts and electronic signatures. These have been highlighted, amongst others, as areas of law which require modernisation and for which there is government support to update.

The consultation received more than 1,300 submissions, a record response since the commission was set up in 1965, and a number of responses were highly critical of the above aspects of the current legislation.

One of the most topical areas the Commission is set to look at is residential leasehold - particularly, lease administration fees, rights of first refusal and service charges. The Commission wish to review what reforms are necessary to the commonhold ownership law to enable it to operate successfully, ways to simplify the procedure of a leaseholder purchasing their freehold and move forward to the regulation of managing agents.

They also highlighted the uncertainty surrounding the legal status of the liability of certain landowners to pay for repairs to a local church. The Land Registration Act 2002 was supposed to bring the problems to an end where the right had not been protected by October 2013. Since then however, legal arguments have been raised meaning that the liability may not have disappeared. The Commission note that they want to “close the loophole” in order to bring greater clarification and added that doing so would “eliminate the current standard of practice of purchasers searching and/or insuring against the risk of liability, which costs an estimated £20m each year.”

The Commission also said “there is a compelling case for reviewing the current English legal and regulatory framework to ensure that it facilitates the use of smart contracts” , being self-executing contracts written in computer code. Also, the Commission wants to bring certainty to the use of electronic signatures as there is an element of caution about their use in conveyancing matters given the Land Registry's requirements and concerns about how an electronic signature should be witnessed.

Law Commission chair Sir David Bean, a Court of Appeal judge, said: “We want to help tackle injustices by making the law simpler, clearer and fit for the future. We will also be making sure the law supports cutting-edge technical innovation such as automated vehicles and smart contracts. Although we are operating in uncertain times, I am confident that our independence and ability to build consensus will help ensure that parliament can take forward law reform in these areas.”

Posted in: Buying & Selling Your Home