The English Law of Real Security

Abstract

The subject of security over movable property is rightly seen as belonging to the core of activities dealing with the harmonisation and unification of European private law. The current differences in the laws of Member States of the European Union inhibit the free movement of capital and delay the completion of the internal market. English law is widely considered as sympathetic to secured credit and has therefore facilitating the making of loans to industry and commerce. In this article, the author emphasises the ease and simplicity with which a creditor can take security, drawing attention to the celebrated floating charge. He points to the current failure of English law to subscribe to the functional policies underpinning article 9 of the American Uniform Commercial Code (so influential in the model law drafted for the European Bank for Reconstruction and Development). Finally, he draws attention to the way English law focuses on freedom of contract between secured creditor and debtor, refusing to take account of distributional (or third party) considerations. Change, however, is in the air. The Privy Council has recently imposed controls over the taking of fixed security and the creditor's self-help remedies are under threat from proposed legislative change.