_________________________________________________________________________Swansea University E-Theses Secured transactions law reform and the modernisation of personal property law. Renaudin, Muriel How to cite: _________________________________________________________________________ Renaudin, Muriel (2010) Secured transactions law reform and the modernisation of personal property law.. thesis, Swansea University. http://cronfa.swan.ac.uk/Record/cronfa43139 Use policy: _________________________________________________________________________ This item is brought to you by Swansea University. Any person downloading material is agreeing to abide by the terms of the repository licence: copies of full text items may be used or reproduced in any format or medium, without prior permission for personal research or study, educational or non-commercial purposes only. The copyright for any work remains with the original author unless otherwise specified. The full-text must not be sold in any format or medium without the formal permission of the copyright holder. Permission for multiple reproductions should be obtained from the original author. Authors are personally responsible for adhering to copyright and publisher restrictions when uploading content to the repository. Please link to the metadata record in the Swansea University repository, Cronfa (link given in the citation reference above.) http://www.swansea.ac.uk/library/researchsupport/ris-support/ SECURED TRANSACTIONS LAW REFORM AND THE MODERNISATION OF PERSONAL PROPERTY LAW By MURIEL RENAUDIN Submitted to the University of Swansea in fulfilment of the requirements for the Degree of Doctor of Philosophy Swansea University 2010 ProQuest Number: 10821531 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a com plete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. uest ProQuest 10821531 Published by ProQuest LLC(2018). Copyright of the Dissertation is held by the Author. All rights reserved. This work is protected against unauthorized copying under Title 17, United States C ode Microform Edition © ProQuest LLC. ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106- 1346 LEDRARY SUMMARY This thesis deals with the legal reform of secured credit law regimes. Particularly, it considers to what extent the modernisation of secured credit laws could be achieved through approximation of law methods. Although, a justification of secured lending continues to be a topic of debate amongst economic scholars, the case for the modernisation and approximation of secured credit law regimes is now clearly established and now represents a general consensus amongst academics and commercial actors. The archaism and divergences of national secured credit law regimes have become too cumbersome and inadequate to meet the requirements of modem commerce. Accordingly, the question is addressed of whether the modernisation of secured credit law regimes could be successful using approximation of law methods such as legal transplantation, legal harmonisation and legal unification. A comparative law approach is retained in the thesis in order to assess whether a modernisation using approximation of law methods could be successful. Fundamental divergences are identified between the law of personal property in Civilian jurisdictions such as France and Common Law jurisdictions such as England. It is argued that secured credit law regimes are well entrenched in ‘legal culture’ which constitutes one of the major obstacles to the successful modernisation of secured credit law regimes in the light of an approximation of law. It is thus further questioned whether the modernisation of secured credit could occur outside the framework of the state. The recognition of an independent legal framework to regulate secured transactions can however be challenged as not being entirely feasible nor desirable. DECLARATIONS AND STATEMENTS This work has not previously been accepted in substance for any degree and is not being concurrently submitted in candidature for any degree. Signed Date STATEMENT 1 This thesis is the result of my own investigations, except where otherwise stated. Where correction services have been used, the extent and nature of the correction is clearly marked in a footnote(s). Other sources are acknowledged by footnotes giving explicit references. A bibliography is appended. Signed Date STATEMENT 2 I hereby give consent for my thesis, if accepted, to be available for photocopying and for inter-library loan, and for the title and summary to be made available to outside organisations. Signed Date CONTENTS Page Number ACKNOWLEDGEMENTS TABLE OF STATUTES TABLE OF CASES ABBREVIATIONS INTRODUCTION CHAPTER ONE IN PURSUIT OF A RATIONALE FOR SECURED CREDIT INTRODUCTION 1 THE PUZZLE OF SECURED CREDIT: CURRENT THEORIES 5 The theories measuring the economic efficiency of secured credit 7 The monitoring costs explanation 7 The signalling theory 10 The Free riding theory and the Relational theory 12 The redistributive theory 16 A major threat to the institution of secured credit 16 The uncertainty of the exploitation thesis 20 THE ECONOMIC ANALYSIS: A NEW CHALLENGE FOR THE LAW OF SECURED CREDIT 28 The use of the economic analysis to account for the institution of secured credit 29 The economic analysis as new norm to challenge the law 33 The law as an instrument of economic dominance 34 Legal origins thesis 37 CONCLUSION 39 CHAPTER TWO SECURED TRANSACTIONS LAW REGIMES AND THE PHENOMENON OF MODERNISATION THROUGH APPROXIMATION OF LAW INTRODUCTION 44 MODERN SECURED LENDING AND THE NEED FOR REFORM: A COMPARATIVE ANALYSIS OF INTELLECTUAL PROPERTY SECURITY REGISTRATION SYSTEMS 49 The registration mechanism for security interests in intellectual property assets in the United States 51 The registration of security created in intellectual property assets under English secured credit law 56 Current regime 57 Recent considerations for reforms 60 The registration of security created in intellectual property assets in France 63 Special dispositions 65 General regime 67 SECURED CREDIT AND APPROXIMATION OF LAWS 70 The Cape Town Convention 71 Approximation of secured credit laws: a consensus? 76 Methodological challenges 83 CONCLUSION 85 CHAPTER THREE LEGAL TRANSPLANTS AND THE MODERNISATION OF SECURED CREDIT LAW REGIMES INTRODUCTION 88 CONCEPTUALISATION OF LEGAL TRANSPLANTATION AS LEGAL METHOD OF LAW REFORM 93 The approach adopted 94 The culturalist theories 96 Legal autonomy theories 100 Accessio - A case study 102 The legal transplantation of accessio in France 103 The legal transplantation of accessio in England 106 THE FEASIBILITY OF LEGAL TRANSPLANTATION OF ARTICLE 9 UCC IN EUROPEAN SECURED CREDIT LAW REGIMES 111 Legal transplantation of Article 9 UCC in England 112 Legal transplantation of Article 9 UCC in England 112 Codification as a new legal instrument for law reform 115 The retention of title clause dilemma 119 The purchase money security interest 122 Notice filing 126 The treatment of the floating charge 131 The Floating charge and insolvency 139 The transfer of Article 9 UCC reform experiences to other Common Law jurisdictions and the fate of the floating charge 146 Legal transplantation of Article 9 UCC in France 149 Terminological obstacles 152 Obstacles related to the functional approach 153 The concept of ‘real right’ and the ‘security interest’ 154 The retention of title clause dilemma 157 The introduction of the fiducie: the extension to the use of property based securities 163 The legal transplantation of Article 9 UCC in Quebec: a mixed success 165 CONCLUSION 168 CHAPTER FOUR HARMONISATION AND THE MODERNISATION OF SECURED CREDIT LAW REGIMES INTRODUCTION 172 DOCTRINAL ASPECTS OF HARMONISATION AS LEGAL METHOD TO MODERNISE SECURED CREDIT LAW IN THE EU 177 Nature of Harmonisation 178 The use of harmonisation as legal method of secured credit law reform in the EU 181 Regulatory competition vs. harmonisation in Europe 188 The competence of the EU to legislate in the sphere of secured credit law 191 EUROPEAN SECURED CREDIT LAW REGIMES: RETENTION OF TITLE CLAUSES AND HARMONISATION 196 Comparative law aspects of property laws in France and England 199 The Civilian Tradition and the absolute character of ownership 200 Common Law jurisdictions and the relative character ofproperty 205 Comparative analysis of the regulation of the parties’ rights and obligations under retention of title clause 213 Legal nature of the buyer’s rights until payment 213 The buyer’s conditional real right in France 214 The nature of the buyer’s rights in England 218 Legal nature of the seller Js right until payment: security (charge) or proprietary right? 222 Comparative analysis on retention of title clauses Principle of transparency 229 The numerus clausus principle 232 CONCLUSION 235 CHAPTER FIVE UNIFICATION OF LAW AS LEGAL METHOD TO MODERNISE SECURED CREDIT LAW REGIMES INTRODUCTION 242 INSTRUMENTS OF UNIFICATION 246 International conventions 246 The process of ratification and amendments 249 Difficulties related to the interpretation of international conventions 254 Model laws and restatements 258 MODERNISATION OF SECURED CREDIT LAW REGIMES AND THE UNCITRAL LEGISLATIVE GUIDE ON SECURED TRANSACTIONS 266 CONCLUSION 274 CHAPTER SIX CONCLUSION: THE NEW TRANSNATIONAL COMMERCIAL LAW AND THE GRAND CHALLENGE OF LAW