Lloyd's Maritime and Commercial Law Quarterly
The travails of English chattel security law reform—a transatlantic view
Jacob Ziegel *
The author examines from a Canadian perspective the hostile reaction to the Law Commission’s proposals of August 2005 to introduce a UCC Article 9 type regime to regulate company security interests in England and queries whether the critics’ assumptions are justified about the satisfactory state of the current law. He also supports the Law Commission’s much more modest proposals of last August and voices his concerns that even these may never reach the statute book because of continued opposition from influential sources. The author urges the DTI and English academics to play a more proactive role in the debate and, in the case of the latter, to focus on the empirical side of secured lending in addition to the more traditional style of legal research.
I. INTRODUCTION
For the past 35 years or more, there has been an intermittent debate among English academics, practitioners and law reformers about the desirability of England’s adopting a new regime for security interests in personal property along the lines of Art 9 of the American Uniform Commercial Code (“UCC”) and the Personal Property Security Acts (“PPSA”s) now in force in all the Canadian common law provinces and Territories,1
and the Personal Property Security Act 1999 more recently enacted in New Zealand.
The debate was initiated in 1972 with the publication of the Crowther Committee Report on Consumer Credit,2
Part 5 of which made a strong case in favour of an Art 9 type reform of the English law. This was followed by the Report of the Insolvency Law Review Committee in 1982, which supported the Crowther recommendations.3
The debate was resumed in 1988 with the publication of Professor Aubrey Diamond’s report to the
* Professor of law emeritus, University of Toronto. This is a modestly revised version of a paper presented by the author at a meeting of the Banking Law Section of the Society of Legal Scholars held as part of the annual conference of the SLS at Strathclyde University on 7 September 2005. As will become obvious, this article lays no claim to exhaustiveness—far from it. I was inspired to write it at short notice because of my surprise about the paucity of academic reaction in England to the harsh professional criticisms of the Law Commission’s Company Security Interests: A Consultative Report
(LCCP No. 176), published in the summer of 2004, and by my belief that legal academics can make an important contribution to the discussion of what personal property security law reforms are appropriate and desirable in the English context..
1. Quebec also adopted in 1994 a civilian version of Art 9. Its principal features are that it recognizes non-possessory hypothecs (hypothèque mobilière avec dépossession
), which are required to be perfected by registration. Retention of title and leasing agreements are not included in the definition of hypothèque
but such agreements are also subject to registration requirements. See generally Louis Payette, Les sÛretês dans le Code civil du Québec
, 2nd edn (Editions du Yvon Blais, 2002).
2. Report of the Committee on Consumer Credit
(1972), paras 5.7.20 et seq.
3. Report of Insolvency Law Review Committee, Insolvency Law and Practice
(1982), paras 1620–1623.
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