Identifying Borrowed Sources in Secured Transactions Law Reform

Abstract

The enactment of Article 9 of the Uniform Commercial Code in the United States has had a profound influence on the reform of secured transactions law in other countries. The operational principles that animate Article 9 were first transplanted into Canada and later into New Zealand. In the last two decades, at least 25 countries have passed personal property security legislation (a “PPSA”) based on these principles. On one level, one could claim that Article 9 has been transplanted into each of these 25 countries. However, on another level this story is far too simplistic. If one examines the various statutes, it is becomes clear that a more complex process has been at work in which there has been innovation as well as borrowing. These innovations in turn influence the borrowings of other countries that enact a PPSA. In this highly dynamic environment the source of borrowing can be difficult to identify. This paper examines the nature and extent of the borrowings that occur in connection with the reform of secured transactions in countries that have enacted a PPSA. It will identify three major templates that are available, namely, the most recent version of Article 9, the Canadian/New Zealand model and the UNCITRAL Model Law. These templates will be reviewed in order to find markers that are present only in that template and not in the other two. These markers will be used to “fingerprint” the PPSA legislation in other countries in order to measure the extent to which the jurisdiction has borrowed from each of the three templates. The paper will conclude with a number of observations about the path of secured transactions law reform on an international level.