Push to reform Secured Transactions law following new ‘Code’ discussions

A new law of secured transactions is one step closer after lawyers and legal academics met to discuss reforming the law.

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Lawyers and legal academics met to discuss reforming the law

At a recent conference organised by Nottingham Law School, the City of London Law Society (CLLS) and University College London and hosted by Norton Rose Fulbright LLP, senior City practitioners and academics as well as representatives from the English and Scottish Law Commissions met to discuss the draft Secured Transactions Code produced by the CLLS.

English law is widely used in international financial transactions and, in the light of Brexit, there is a fresh impetus to create a new law of secured transactions based on the existing law but simplified and modernised: something the Code can achieve.

The purpose of the conference was to build on earlier discussions on secured transactions reform with the sessions drawing on the work of the Secured Transactions Law Reform Project and the CLLS in seeking to identify where consensus can be found.

The Code changes and codifies the law in as clear and straightforward a way as possible and retains the flexibility of the current law – important in enabling the Code to give effect to changing commercial practices. Key provisions include the removal of the distinction between fixed and floating charges; the creation of a charge at the point of registration; and the simplification of the priorities rules as between chargees.

Dr Paula Moffatt, Associate Professor and Director of External Engagement at Nottingham Law School, said: “Post-Brexit, we need to make clear to the world that we have a modern and clearly understandable English law secured transactions regime that is ‘best in class’ to encourage inward investment.

“However, it is a complex task and there are many areas of real difficulty that must be addressed as part of the process.  The English law of secured transactions, as it is currently understood, is not a discrete set of rules; it cuts across the legal foundations of contract, trusts and land law as well as company, insolvency and property law.

“The good news is that most of the thinking about how the English law of secured transactions should be reformed has already been done by the Law Commission, the Project and the CLLS. Much of this work demonstrates a common understanding of the underlying jurisprudence, supplemented by a desire to modernise and improve the existing law.”

Following the conference, a revised version of the Code will be produced with a view to a second meeting later in the year.  This second iteration will then be used as a base line position from which to work towards legislative reform.

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Push to reform Secured Transactions law following new ‘Code’ discussions

Published on 9 May 2019
  • Subject area: Law, criminology and justice
  • Category: Press office; Nottingham Law School

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