Security over Intangibles: Appearance and Reality

The Paul-André Crépeau Centre for Private and Comparative Law concludes the first year's of its « Les apparences en droit civil » Civil Law Workshops, with a talk by Ross Anderson (bio) (University of Glasgow).

Abstract

What do incorporeals looks like? Their qualities are substantive, not physical. That is true of all rights in all systems. But civil lawyers, it seems, can see what common lawyers do not. The institutional structure of the civil law – persons, obligations, property – together with general patrimonial principles (such as the numerus clausus, the publicity and specificity principles) means civil lawyers know real rights and limited real rights when they encounter them. The division between real rights and personal rights, inherent in the institutional structure, plays a central role in the law of security interests. It is this simplicity, indeed, that is one of the great attractions of the civil law approach to private law.

Perhaps because of its antiquity, its weight of authority, and relative rationality, however, the basic civilian concepts, particularly in the law of security, are all too readily asserted rather than explained. There has not, in general, been the same critical reflection so characteristic of much modern discourse on proprietary security interests in the common law. Those common law responses, on the whole, demonstrate much practical, if ad hoc, ingenuity. But this ingenuity has not been matched by intelligibility.

Coherence has long been a civil law attribute. But even the great civil codes were not always coherent, particularly on technical points involving ownership and security. The codes were composed at a time when land was the paradigm asset and intangibles were, for commercial purposes, dealt with in the commercial codes and, in particular, in the law of negotiable instruments. The result has been the perception of conservatism. The lack of systematic review has sometimes resulted in only piecemeal amendments. The recent review of moveable security law in Scotland has given one opportunity – in an English speaking system rooted, in this area, in the civil law – for wholesale reflection.

In this context I consider, three points: the theory of limited rights as applied to claims and IPRs; the specificity principle; and the publicity principle. The appearance of civil law coherence is shown to be, in places, illusory. Building on the work of George Gretton, however, I suggest that a more coherent approach to basic patrimonial principles brings a clarity to the structure of the law. And it is these doctrinal improvements that allow us to focus on translating our theory into the reality of ordinary financial transactions.

About the Civil Law Workshops

For over a decade, the Paul-André Crépeau Centre for Private and Comparative Law's “Civil Law Workshop” series has been a showcase for new ideas relating to aspects of fundamental private law in the civilian tradition.

This activity was accredited for 1.5 hour of CLE by the Barreau du Québec (no. 10058257).

Registration is not required.