The registration of company charges regime has been revised several times since it was introduced in 1862: the last revision was in 2013. However, the wider law, including the priority rules and the law relating to security interests created by unincorporated businesses and individuals, has been the subject of criticism and of a number of reform recommendations.
The Crowther report in 1971, which led to the Consumer Credit Act 1974, criticized the law as incoherent and inefficient, as well as regulating transactions according to their form and not their substance. This was because charges were treated differently from transactions such as hire-purchase agreements. It recommended the adoption of a new notice filing scheme based on Article 9 of the US Uniform Commercial Code.
The Cork report in 1982 made certain recommendations: that retention of title clauses should be registrable, and that non-corporate businesses should be able to grant floating charges over business property.
The Halliday report in 1986 looked at the law in Scotland recommended a notice-filing system for Scotland, though limited in scope.
The Diamond Report in 1989 recommended an Article 9 style system, but also made some interim suggestions for improving the law, which were enacted in the Companies Act 1989. The relevant part of this Act was never brought into force because of technical difficulties, particularly in relation to the land registration system.
The Company Law Review Steering Group, which published its final report in 2001, recommended a notice filing system for company charges, and the matter was referred to the Law Commission for detailed consideration. The Law Commission produced a consultation paper in 2002, which provisionally proposed a notice-filing scheme, and a consultative report in 2004, which proposed a fully worked up scheme based on the Personal Property Security Acts in Canada and New Zealand and the Revised Article 9. Its final report in 2005 was more limited: for example, it did not recommend the full scheme because it recognized that in some areas more work was needed. But in most respects its recommendations on registration of company charges and also sales of trade receivables followed the PPSA scheme closely.
The Law Commission’s final recommendations have not been enacted, although limited reforms to the registration system were introduced in 2013.
The Secured Transaction Law Reform Project is picking up where the Law Commission left off, and taking as a starting point its 2004 consultative report. A more limited consideration of reform is being undertaken by the City of London Law Society Financial Law Committee, who are at present looking into the issues of the distinction between fixed and floating charges, and anti-assignment clauses.