Moveable transactions (security over corporeal and incorporeal moveable property; assignation of incorporeal moveable property)
Commissioner
Dr Andrew Steven
Team members
John Dods, Project Manager
Neil Campbell, Legal Assistant
This is a medium-term project in our Eighth Programme of Law Reform.
It covers the project on assignation and security over incorporeal moveable property which was included in our Seventh Programme of Law Reform but adds to it the subject of security over corporeal moveable property. Thus book debts (money owed but unpaid), loan books (sums due on mortgage, credit cards, car loans etc), intellectual property rights (patents etc), stock in trade, and equipment (vehicle fleets etc) all fall within the scope of the project.
All three areas (assignation, security over incorporeal moveable property, and security over corporeal moveable property) are important to the smooth running of the Scottish economy but in all three areas Scots law appears to be out of date and insufficiently business-friendly. From an international perspective current Scots law would appear to be in need of radical reform.
We published a Discussion Paper on Moveable Transactions (DP 151) in June 2011. The paper considered the current law, identified its shortcomings, and suggested possible ways forward. Other legal systems were looked at, including the model that originated in the USA (Article 9 of the Uniform Commercial Code) and which has now been adopted (with some variations) in a number of other countries including Australia, Canada and New Zealand. Although the paper concluded that a wholesale adoption of this model would not be appropriate, it is suggested that Scots law would benefit from adopting some of its ideas.
It is proposed that there should be a new type of security right that could cover both corporeal and incorporeal moveable property. There would be a new online Register of Moveable Transactions, in which the security right would be registered. The new register could also be used to register transfers of financial rights, for example in securitisations and factoring.
The consultation period for this project has now closed and we are analysing responses to the Discussion Paper with a view to reporting in the latter part of the 8th Programme of Law Reform.
Contact: john.dods@scotlawcom.gsi.gov.uk.