Most businesses need credit in order to flourish, and the inability to access credit on reasonable terms is a particular problem for businesses in developing economies, and for small and medium sized enterprises throughout the world. An efficient legal system governing the provision, registration and enforcement of secured credit (‘secured transactions law’) facilitates access to credit and decreases the cost of credit. It is therefore important for international trade and economic growth for states to have such a law. However, the costs and difficulty of reforming law in this technical area are considerable. The UN the Commission for International Trade Law (UNCITRAL) has been working for some time on texts to assist in this process for states who wish to reform their law, particularly in developing economies. A legislative guide was produced in 2007: it was then decided to produce a Model Law based on the legislative guide, and work on this started in 2013. The legislative guide has already been used by a number of states in the modernisation of their law, and the Model Law should help many others. The text of the Model Law is designed to work in jurisdictions of all legal traditions, which has been possible because of the involvement of delegations from all legal traditions in its development. The adopted text will be translated into a number of key languages, and is designed to work in all those languages, although it will, of course, have to be further translated into the language(s) of an enacting state.
Professor Louise Gullifer has been involved in the drafting of the Model Law since 2013 by attending advisory drafting groups, and in 2016, attended one working group meeting and one Commission meeting as the UK delegate to the Commission. The Commission approved the Model Law at the session in July 2016.
UNCITRAL has 60 member states, of which one is the UK. Until Professor Gullifer attended as a delegate in 2016, the UK had not been represented in relation to the work on secured transactions since 2011. Professor Gullifer, who has written books and articles on domestic and comparative secured transactions law, as well as on secured transactions law reform around the world, was able to use her expertise to inform the drafting of the law, and to help ensure that it was as clear, comprehensible and functional as possible. She continues to be involved in UNCITRAL’s next project, which is to produce a Guide to Enactment to the Model Law, and will be making a presentation on how far the Model Law is suitable for secured lending to micro-businesses at a forthcoming Colloquium where the next projects of the secured transactions working group will be decided.
UNCITRAL are holding a colloquium in March 2017 to discuss the future work of Working Group VI. Professor Gullifer will be presenting on the question of whether the Model Law and the draft Guide to Enactment might need to be expanded to address matters related to secured finance to micro, small and medium-sized enterprises (MSMEs).