Reform of the Scottish Floating Charge

A. INTRODUCTIONB. PREVIOUS REFORM ATTEMPTS(1) General(2) Failed expansionism: the Murray Report(3) Failed revisionism: the Bankruptcy and Diligence etc. (Scotland) Act 2007 Part 2C. THE SLC MOVEABLE TRANSACTIONS PROJECT(1) Beginnings(2) Discussion paper(3) Consultation(4) ReportD. REFORM OF ENGLISH LAW(1) Impetuses(2) City of London Law Society(3) Secured Transactions Law Reform ProjectE. FUTURE REFORM IN SCOTLAND(1) Introduction(2) UK PPSA(3) UK Secured Transactions Code(4) Insolvency law (plus?) reform(5) Reform leading to single security rights in England and ScotlandF. CONCLUSIONA. INTRODUCTIONIn MacMillan v T Leith Developments Ltd (in receivership and liquidation), towards the end of his judgment, Lord Drummond Young states:‘The introduction of the floating charge into Scots law, and subsequently the concept of receivership, have created significant practical problems. A large part of the difficulty has, I think, been an attempt to reproduce concepts of English equity in a legal system that has no similar institution … It is difficult to translate the institutions of English equity into another legal system, especially one based on the more rigorous conceptual structure of Roman law, as is the case with Scots law and most other European legal systems other than English law.’He goes on to say that the solution to the difficulty is reform, citing in particular the Scottish Law Commission's work on moveable transactions. I declare an interest here as the lead commissioner responsible for the report on that subject, which was published in 2017. That role reinforced to me the persistent difficulties of achieving reform in this area and in the law of security over moveable property more generally. As shall be seen, a similar pattern has been observable south of the Scottish border. To a certain extent this is unsurprising given the commonality of the law in relation to floating charges, their source, of course, being English law.This chapter focuses with some tentativeness on future prospects. It begins by trying to learn lessons from the past. Part B looks relatively briefly at previous attempts to reform floating charge law in Scotland that proved unsuccessful. There is particular emphasis on the Murray Report and Part 2 of the Bankruptcy and Diligence etc. (Scotland) Act 2007 (the 2007 Act). Part C then considers the moveable transactions project. At the time of writing there is reasonable confidence that its recommendations will lead to legislation, al