Viehweg's Topics, Article 9 UCC, the 'kautelarische Sicherheiten' and the Hungarian Secured Transactions Law Reform

Abstract

It goes without saying that secured transactions law is one of those emerging and growing legal disciplines which has attracted the most attention during the 1990s on all levels. Despite some encouraging developments and first steps taken in introducing new secured transactions laws, all the transitory economies of most Central and Eastern European countries seem to suffer fromt he same malaise in this context. In a nutshell: system-oriented thinking and the inherent deference to traditional legal principles of civil law tend to stymie the creation of a high-quality legal framework inevitable for the gradual formation of credit economy. A credit economy, without which no market economy can exist, and without which hardly could such burning problems, as housing or the revival of the economy, be solved. In sum, traditional legal rules, be they enshrined into civil codes, or just hovering somewhere in the vacuum, are not the tools for bringing about a credit economy. In order to effect the necessary changes, problem-oriented thinking should come to the forefront, to which the acceptability of even the tiniest technical details of a new law would not depend on whether the new solution could be brought under the penumbras of any of the traditional legal principles, but rather whether innovation could in practice improve the conditions for extending credits. And eventually, to what extent can any one solution help solving the main policy aim, which I will refer to in a somewhat shorthand way as the creation of credit economy. In attempting to outline the central thesis, I shall exploit the possibilities inherent to four main phenomena, the relationship of which has neither been analysed nor ever justaposed as categories having something common to date. The first phenomena is the recent Hungarian secured transactions law reform, which rates high not just in the Central and Eastern European region, but on a worldwide scale. The main deficiency of these reforms appears to coincide with the central thesis of this article. The second aid in my efforts could be best defined as the quintessence of a remarkable product of theory of law, that is, Theodor Viehweg's 'Topics and Law', which superbly explains the dilemmas lying behind the mechanics of system- versus problem-oriented thinking in law. Thirdly, I have made use of the sui generis, customary law based German security law, known under the heading of kautelarische Sicherheiten (that is, 'contractual-clauses-based securities), primarily becasue of the close resemblance of Hungarian and German legal systems. This peculiar pearl of German law is interesting also because it is the proof of the existence of problem-oriented thinking in civil law and of the fact that our central thesis has merit also in developed civil laws. Fourthly, Article 9 of the Uniform Commercial Code - to date the most successful secured transactions pattern - has become an important gear wheel of this paper mainly due to two factors. On one hand, as the repository of many efficient credit-enhancing mechanisms, some of Article 9's constituent elements have been utilised to demonstrate by concrete examples what is meant by problem-oriented thinking in the secured transactions domain. On the other hand, givent that Article 9 is in and of itself a kind of system, it is also a good example for the reconciliation of problem and system-oriented thinking. What is sure, however, is that the intention here is not to bring to the surface each and every technical deficiency of the new Hungarian secured transactions reform. Yet, if adhered to, the panacea offered here (that is, revealing the central conceptual and methodological deficiencies of the reform) may fundamentally change pre-conceptions of relevance to secured transactions law and may put reform efforts in transitory countries on the right track. All this applied to Hungary means that, in spite of the impressive results of the Hungarian reform, without parting with the presuppositions identified on the following pages, no genuine breakthrough should be expected.