The Law Commission of England and Wales published its Consultation Paper on the Bills of Sale Acts on the 9th September 2015. The consultation will run for three months, during which time any interested parties may respond. The Consultation Paper, Executive Summary and other related documents, including details on how to respond, can all be downloaded here.

Much of the Law Commission’s work focuses on the use of bills of sale for high-cost consumer lending, when sub-prime borrowers grant security over their vehicles.  In this so-called logbook loan market, the Law Commission proposes to do away with the requirement to register bills of sale at the High Court, relying instead on asset finance registries such as HPI. There are proposals to stream-line the High Court registration process for bills of sale over other assets, and for receivables financing transactions, which are also registrable at the High Court when entered into by non-corporate debtors. However, the Law Commission has not taken this opportunity to recommend more extensive reform of the Bills of Sale Acts. In particular, the proposals would retain aspects of the legislation which currently prevent unincorporated businesses from granting certain types of security, such as the floating charge.

The Project intends to respond to this consultation.

Further reading:

L. Gullifer and S. Hurst, Bills of Sale Acts: ripe for reform? [2013] JIBFL 685

On 9 August 2015, Minister for Small Businesses Anna Soubry announced the Government’s intention to use its power under the Small Business, Enterprise and Employment Act 2015 to nullify ban on assignment clauses. The move has been taken in order to increase access to finance for small businesses. The Asset Based Finance Association and the National Federation for Small Businesses have spoken in support of the move.

The Government’s response to its consultation is accessible here.

For more detail on the consultation and work done by the project in this area, please see ourban on assignment clauses pages.

On Wednesday 27 May 2015 a webinar was held to discuss the key points arising from the Australian PPSA statutory review.

The Australian Personal Property Securities Act, which introduced a new scheme for registration, priorities and enforcement of secured transactions in Australia, came into force in 2012. The Act included a built-in statutory review, to be completed three years after commencement (which can be downloaded here). The review culminated in March this year in the delivery to Government of a 500-page Final Report containing 370 recommendations. For further information on the Final Report, including material providing an overview of the review see the section on Australia.

The webinar was chaired by Professor Hugh Beale. Associate Professor David Brown of the University of Adelaide discussed key points arising out of this review, and Professor Louise Gullifer commented on its significance for secured transaction reform in English law and around the world.

A recording of the webinar, as well as slides from the presentation, can be accessed here.

STR deputy executive director Magda Raczynska provided an update on the work of the Project for the Lexis Nexis Loan Ranger.

On 27^th March 2015 the Secured Transactions Law Reform Project (STR) held a conference on security interest over intellectual property rights, kindly hosted at the offices of Olswang. It centred on the legal and practical difficulties encountered when taking security interests in intellectual property  rights, which is of particular significance in relation to access to finance. Events of this kind, where IP practitioners and credit financiers meet to discuss problems in this area, are rare and STR would like to express its gratitude to Olswang for hosting and contributing to this important conference, which – it is hoped – will be a beginning of a productive debate.

Click here for more information and to download presentations from the day.

The Small Business, Enterprise and Employment Act, which received the royal assent on 26th March 2015 and the text of which can be found here, provides that the Secretary of State may make regulations providing that a ban on assignment clause has no effect, either generally, or in relation to persons of a prescribed description, or only for prescribed purposes. Consumer contracts are excluded, as are ‘excluded financial services contracts’. The power is wide, and the details of any new regulations will be important, but this is clearly a step towards control of such clauses.

The Secured Transactions Law Reform Project has been considering whether there should be a statutory override of such clauses for some time, and has produced a survey to ascertain industry views. If you are involved in the receivables financing industry please take a few minutes to fill in this survey which will then continue to inform our work in this area.

Ban on assignment survey

STR Executive Director Louise Gullifer talks to Jacqueline Cook, solicitor in the LexisPSL Banking & Finance team, about the work of the Project.

Details of useful websites for more information on the Project and Lexis®PSL Banking & Finance are at the end of the webcast.

Two conferences were held by the project on 18^th and 20^th June on Secured Transaction Reform in other jurisdictions.    The first was held at the offices of Freshfields Bruckhaus Deringer LLP, and the second at Durham University, supported by Bond Dickinson LLP.    Each included presentations about the recent introduction of a Personal Property Securities Act system in Australia, reform initiatives in Scotland, Ireland and Jersey, and discussion of topical issues arising under the Canadian PPSA and Article 9, UCC.   The conference attendees were a mixture of practitioners, bankers and academics, and there was lively debate about the merits of the various systems outlined, as well as identification of conceptual and policy differences between specific jurisdictions.    We would like to thank everyone who attended.     The project intends to publish the papers in a book, together with others covering more jurisdictions.

The documents and powerpoint presentations given at the conferences are available here.

On 8^th May 2014 an audience of bankers and lawyers attended a seminar on receivables financing organised by the project at the offices of Freshfields Bruckhaus Deringer in London.     The discussion in the first session focused on how the rules on the registration of interests in receivables and priority between interests could be improved, and in the second session on whether there should be a (limited) override of ban on assignment clauses.     There was some really excellent participation from those who were there, which the project will consider very carefully.  We would like to thank everyone who attended.
The presentations given at the seminar are available here.

We are also keen to find out the views of anyone who is interested in this area but was unable to attend the seminar.   We have drafted a survey which we distributed at the seminar.   If you are involved in the receivables financing industry, please take a few moments to fill in the survey and send a scanned copy to info@securedtransactionslawreformproject.org

Ban on assignment survey