On the 24th November 2017, the Law Commission published their report on the Goods Mortgages Bill following a consultation, and has recommended replacing the Bills of Sale Acts. The Law Commission set out a number of proposals including the draft text of a the proposed Goods Mortgages Bill which can be found here.
Jacqueline Cook of Stephenson Harwood LLP and a member of Lexis®PSL Banking & Finance consulting editorial board, has written a practice note examining some of the key provisions of the proposed bill. Jacqueline Cook has kindly given the STR permission to post this practice note, which is available here.
Further updates on the progress of the proposed bill will be published on this blog and in the STR mailer.
On the 4th July 2017 Professor Louise Gullifer gave a presentation about the work of the Secured Transaction Law Reform Project and some of the issues considered in the discussion papers written by academic members of the project to stimulate debate, published in January 2017.
The presentation was attended by lawyers from Clifford Chance and elsewhere, as well as by bankers and policy makers. Some of the authors of the papers also attended and took part in the question and answer session.
The presentation is accessible here.
The discussion papers can be found here.
As always the project is very grateful to those who have responded so far and with the debate continuing we would be delighted if others could join by adding there comments to the papers. These comments should be sent to firstname.lastname@example.org.
Rich Eldrige and John Chater of Penningtons Manches LLP have published a brief commentary on the STR’s January 2017 Discussion Papers.
Click here to view this feedback.
Article briefly summarises the progress of the Secured Transactions Law Reform Project thus far, and the steps to be taken by the STR.
The STLRP has published six new Discussion Papers intended to engender a wide debate on the reform of secured transactions law.
For an overview of the purpose and intention behind the STR’s discussion papers, please click here.
- Asset Finance (PDF | DOC)
- Fixed and Floating Charges (PDF | DOC)
- Personal Property Security and Consumers (PDF | DOC)
- Priorities (PDF | DOC)
- Registration (PDF | DOC)
- Sale of Receivables (PDF | DOC)
All views and comments are very much welcomed. Please direct correspondence to this email address.
Professor Duncan Sheehan of the University of Leeds Law Faculty will be hosting a conference entitled Secured Transactions Law Reform: Priority Rules and the Impact on Consumers on the 6th of January 2017.
The conference, held in conjunction with the Secured Transactions Law Reform Project, and part-funded by the Society of Legal Scholars, will assess different models of secured transactions law reform, the impact on other areas of law, and specific problematic asset classes such as financial collateral, intellectual property rights and bitcoin.
It will examine the relationship of a reformed law on two areas in particular. The first is the effect of reform on priorities and nemo dat quod non habet. The latter is the rule that a transferor cannot give his transferee any better title to an asset than he has. These issues will be also considered in the context of consumer protection.
The details of this conference are as follows:
06 January 2017 | 9.30 – 16:45 | Conference
The Liberty Building, Moot Court Room
This is a free event.
Refreshments will be provided.
Please note that registration is required in advance. Click here to register for the conference.
A limited amount of money is available to help with the travel expenses of PhD students attending the conference.
For more information, please contact email@example.com.
In a report published on 12 September 2016 the Law Commission recommended that the Bills of Sale Acts 1878-1882 be repealed (report No 369 Bills of Sale). The report concludes a two-year period of consultation, which saw submission of 38 responses to the Consultation Paper (CP 225), including one on behalf of this Project (http://www.lawcom.gov.uk/wp-content/uploads/2016/02/cp225_bills_of_sale_analysis.pdf). In place of the Acts, the Law Commission recommends introduction of a new Goods Mortgages Act, regulating ‘vehicle mortgage’ and ‘goods mortgage’. The former would be registrable in asset registries, to be designated by the Treasury. Security in goods already owned by borrowers as well as general assignments of book debts made by unincorporated businesses would continue to be registrable at the High Court registry in a simplified process. As a response to the significant appetite for electronic registration, the Law Commission recommended that the new legislation should contain a power to make regulations for implementation of an electronic register in the future. It also recommended that there should be a power to make regulations allowing registration of goods mortgages and general assignments of book debts at the Companies House to streamline the registration regime of security between companies and non-corporates. The legislation would introduce a range of statutory protections, both for borrowers (e.g. a right of voluntary termination) and for private purchasers who act in good faith and without actual notice of security. The Law Commission intends to present the new Act before the Parliament as an uncontroversial Law Commission Act.
Secured Transactions Law Reform: Principles, Policies and Practice has recently been published by Hart Publishing (Bloomsbury). The book grew out of two conferences held by the Secured Transactions Law Reform Project in 2014, and the book was written and edited under the auspices of the project.
Secured transactions law has been and continues to be subjected to close scrutiny globally. One of the main reasons for this is the importance of availability of credit and the consequent need to reform collateral laws in order to improve access to finance. The ability to give security effectively influences not only the cost of credit but also, in some cases, whether credit will be available at all. This requires rules that are transparent and readily accessible to non-lawyers as well as rules that recognise the needs of small and medium-sized enterprises.
The book critically engages with the challenges posed by inefficient secured credit laws. It offers a comparative analysis of the reasons and the needs for a secured transactions law reform, as well as discussion of the steps taken in many common law, civil law and mixed law jurisdictions, written by world renowned experts from many countries.
The book, edited by Professor Louise Gullifer, Professor of Commercial Law at the University of Oxford Law Faculty and Dr Orkun Akseli, Senior Lecturer in Commercial Law at Durham University Law School, reflects the attention paid by the project to secured transaction reform in other jurisdictions. It is intended that the book should be the first in a series reflecting the ongoing reform initiatives around the world.
More details of the book can be found on the publisher’s website.
On 1st July 2016 the Commission for International Trade Law adopted the Model Law on Secured Transactions. This is the culmination of a long term project of Working Group VI of the Commission, which first produced a legislative guide, and has since been working on a Model Law to assist States to implement the recommendations of that guide. Working Group VI will continue to work on a Guide to Enactment of the Model Law.
The purpose of project has been to help states, particularly those with developing and transitional economies, reform and modernise their secured transactions law so as to increase access to, and reduced the cost of, credit and thus to stimulate international trade. The legislative guide has already been used by a number of states in the modernisation of their law, and the Model Law should help many others. The text of the Model Law is designed to work in jurisdictions of all legal traditions, which has been possible because of the involvement of delegations from all legal traditions in its development. The adopted text will be translated into a number of key languages, and is designed to work in all those languages, although it will, of course, have to be further translated into the language(s) of an enacting state.
It applies to all types of assets except intermediated securities (which are dealt with by a UNIDROIT Convention), IP rights which are governed by the particular law of the state, and some other payment rights which are the subject of other Conventions. It enables security to be taken over present and future assets, which can be described generically, and there is a single concept of a security right, which applies regardless of the label put on the transaction by the parties. Third party effectiveness) of security rights can be by possession or registration, or, in the case of certain types of assets, by control. The basic priority rule is first to register or achieve third party effectiveness, but there are special rules for purchase money security interests (called acquisition security rights). Registration is by registration of a notice, which can be in advance of the creation of the security interest: the Model Law includes detailed provisions about registration. A wide range of enforcement mechanisms are provided for, and there are also provisions covering the conflict of laws.
More information is available here. http://www.unis.unvienna.org/unis/en/pressrels/2016/unisl233.html
Professor Louise Gullifer, UK delegate to the Commission on International Trade Law
The Insolvency Service has recently issued a consultation entitled ‘A Review of the Corporate Insolvency Framework: A Consultation on Options for Reform’, which includes certain proposals for priority of rescue finance. This directly relates to the work currently being carried out by Working Group C of the STR project.
Although the consultation concentrates on post-filing financing arrangements, an equally important source of insolvency funding comes from assets within the business. An administrator is free to use assets which are subject to a floating charge without the consent of the creditor or the consent of the court. Working Group C has been told that lenders demand detailed advice as to whether charges will be fixed or floating, which may be difficult to give definitively because of the opacity of the tests. It is feared that that at best this increases transaction costs in the finance market for healthy companies and, at worst, reduces the availability of finance. One vital aspect of Working Group C’s work is to explore the case for the current English law position and for the various options for reform, which impacts directly on the proposals for priority for rescue finance in the consultation. The response to the consultation is available here.