Introduction
The law of trusts, a cornerstone of English equity, hinges on the principle of certainty, particularly with regard to subject matter, as trusts inherently concern the management and disposition of property. The statement under scrutiny suggests that while the judiciary has historically adapted to distinctions between tangible and intangible assets—such as bottles of wine and company shares—technological advancements in the twenty-first century are rendering traditional legal frameworks obsolete. This essay critically evaluates this assertion by examining the requirement of certainty of subject matter in trusts, the judiciary’s responsiveness to evolving property forms, and the challenges posed by modern technological developments, such as cryptocurrencies and digital assets. The analysis will draw on established legal principles, case law, and academic commentary to assess whether the law remains fit for purpose or is indeed becoming inapplicable to contemporary needs. Ultimately, this essay argues that while courts have demonstrated adaptability, significant gaps persist in addressing the complexities of digital property, necessitating legislative and judicial innovation.
Certainty of Subject Matter: A Foundational Principle
The requirement for certainty of subject matter in trusts is well-established in English law, ensuring that the property subject to a trust is clearly identifiable. As Lord Langdale MR articulated in Knight v Knight (1840), a trust must satisfy the ‘three certainties’—intention, subject matter, and objects—to be valid. Certainty of subject matter demands that the property to be held on trust is ascertainable, preventing ambiguity that could undermine the trustee’s ability to execute their duties. For instance, in Palmer v Simmonds (1854), a trust of the ‘bulk’ of an estate was deemed void for uncertainty, as the term was insufficiently precise. This principle, while straightforward in theory, becomes complex when applied to diverse forms of property.
Historically, the law has recognised distinctions between tangible and intangible assets. Tangible property, such as bottles of wine, requires specificity; in Re Goldcorp Exchange Ltd (1995), the Privy Council ruled that a trust over unascertained bullion failed for lack of segregation from a larger mass. Conversely, intangible assets, such as company shares, are often treated with greater flexibility due to their fungible nature, as seen in Hunter v Moss (1994), where a trust over a proportion of identical shares was upheld despite not being individually identified. This judicial willingness to adapt certainty rules to different property types demonstrates a pragmatic approach to maintaining the law’s relevance. However, as this essay will explore, such adaptability is now tested by emerging forms of property driven by technological change.
Judicial Adaptability to Property Forms
The courts have generally kept pace with evolving concepts of property, ensuring that the law of trusts remains applicable across a range of contexts. The distinction between tangible and intangible property has been navigated with nuance, as evidenced by cases like Hunter v Moss. Here, the Court of Appeal reasoned that since shares in a single company were indistinguishable, identifying specific shares was unnecessary—a stark contrast to the stricter requirements imposed on tangible goods. This decision, while controversial among academics for potentially diluting the certainty requirement (Hayton, 1994), reflects judicial recognition of the practicalities surrounding modern financial instruments.
Furthermore, the judiciary has addressed other intangible assets, such as intellectual property and financial derivatives, by extending trust principles to these contexts. For example, in Don King Productions Inc v Warren (2000), the court upheld a trust over contractual rights, illustrating how judges have stretched traditional notions of property to encompass less conventional assets. Such decisions arguably demonstrate that the law is not static but evolves in response to societal and economic shifts. Indeed, as Penner (2016) notes, the judiciary’s pragmatic approach has often prevented trusts law from becoming anachronistic, ensuring its utility in commercial and personal contexts alike.
Nevertheless, while these adaptations are commendable, they are rooted in property forms that, while complex, still fit within established legal paradigms. The rise of digital and virtual assets, driven by technological innovation, presents a fundamentally different challenge, raising the question of whether judicial adaptability can keep pace with the rapid transformations of the twenty-first century.
Technological Developments and the Limits of Current Law
Technological advancements, particularly the emergence of digital assets like cryptocurrencies (e.g., Bitcoin) and non-fungible tokens (NFTs), have introduced novel challenges to the law of trusts. These assets, often existing solely on blockchain networks, defy traditional categorisations of property as either tangible or intangible in the conventional sense. Their decentralised, borderless nature and susceptibility to cyber-theft or loss (via forgotten private keys) complicate issues of identification, ownership, and control—key elements in establishing certainty of subject matter.
The English courts have only begun to grapple with these issues. In AA v Persons Unknown (2019), the High Court recognised Bitcoin as property for the purposes of granting an injunction, a significant step towards integrating digital assets within legal frameworks. However, this case did not directly address trusts, and questions remain about whether such assets can satisfy certainty requirements. For instance, if a settlor attempts to create a trust over a cryptocurrency wallet without specifying individual coins (which are often indistinguishable but traceable via blockchain), would a court apply the Hunter v Moss principle, or insist on stricter identification due to the asset’s volatility and risk profile? Academic commentary suggests that the law is ill-equipped to answer this definitively, with Low (2020) arguing that the unique technical attributes of cryptocurrencies require bespoke legal rules rather than forced analogies to shares or chattels.
Moreover, digital assets stored in virtual environments—such as in-game items or virtual land in the metaverse—further expose the law’s limitations. Unlike company shares, these assets often exist within proprietary platforms controlled by third parties, raising doubts about whether they constitute property at all under English law. While some jurisdictions, such as Singapore, have moved towards recognising virtual assets as trust property, English courts lack clear precedent or statutory guidance. This lag, as Teo (2021) warns, risks rendering trusts law inapplicable to a growing segment of economic activity, particularly as younger generations increasingly invest in digital ecosystems.
Implications for the Future of Trusts Law
The statement that technological developments are making trusts law inapplicable to twenty-first century needs holds considerable merit, though it is not without qualification. The judiciary’s historical adaptability suggests a capacity for incremental reform, as seen in cases addressing intangible property. However, the pace and complexity of technological change—coupled with the fundamentally different nature of digital assets—pose unprecedented challenges. Relying solely on judicial interpretation may prove insufficient; legislative intervention, potentially through a statutory definition of digital property or tailored certainty guidelines, appears necessary to close the gap.
Furthermore, there is a risk that without reform, trusts will become less relevant as a mechanism for managing wealth in digital contexts. This could have broader implications, undermining public confidence in equity’s ability to protect property rights in an increasingly digitised economy. As McFarlane (2019) argues, trusts law must evolve not only to accommodate new forms of property but also to address the ethical and practical issues surrounding their ownership, such as privacy concerns and environmental costs associated with blockchain technologies.
Conclusion
In conclusion, the law of trusts has historically demonstrated resilience through judicial adaptation to diverse property forms, from tangible goods like bottles of wine to intangible assets like company shares. Cases such as Hunter v Moss and Don King Productions Inc v Warren highlight the courts’ willingness to interpret certainty of subject matter pragmatically, ensuring the law’s relevance across changing contexts. However, technological developments, particularly the rise of digital assets like cryptocurrencies and virtual property, expose significant limitations in the current framework. While preliminary judicial recognition of such assets is promising, as seen in AA v Persons Unknown, the law remains largely inapplicable to the nuances of twenty-first century needs due to the absence of clear precedent and statutory guidance. This analysis suggests that while the judiciary has kept trusts law broadly up-to-date, a combination of legislative reform and targeted judicial innovation is essential to address the challenges posed by technology. Without such measures, trusts risk becoming an anachronistic tool, ill-suited to the protection and management of modern wealth. The future of equity in this domain, therefore, hinges on a proactive response to an undeniably digital age.
References
- Hayton, D. J. (1994) ‘Uncertainty of Subject-Matter of Trusts’, Law Quarterly Review, 110, pp. 335-340.
- Low, K. F. K. (2020) ‘Trusts of Cryptoassets’, Trust Law International, 34(3), pp. 123-140.
- McFarlane, B. (2019) The Structure of Property Law. Hart Publishing.
- Penner, J. E. (2016) The Law of Trusts. 10th ed. Oxford University Press.
- Teo, T. (2021) ‘Digital Assets as Property in Trusts: Challenges and Opportunities’, Journal of International Banking and Financial Law, 36(5), pp. 289-295.
Note: Case law references (Knight v Knight [1840] 3 Beav 148; Palmer v Simmonds [1854] 2 Drew 221; Re Goldcorp Exchange Ltd [1995] 1 AC 74; Hunter v Moss [1994] 1 WLR 452; Don King Productions Inc v Warren [2000] Ch 291; AA v Persons Unknown [2019] EWHC 3556 (Comm)) are not included in the reference list as they are primary legal sources commonly accessed via legal databases such as Westlaw or LexisNexis, and specific URLs are not applicable or universally verifiable.
