Company charges - proposals to reform law are shelved

United Kingdom

The DTI have confirmed that they will not make any changes in relation to the law of company charges for the time being.

There is no provision in the Company Law Reform Bill (introduced to the House of Lords on 1 December) except to provide for power to implement changes, and the DTI have been asked by the City of London Law Society to confirm what their intentions are. They have now done so, and although they say that Scotland intends to implement the main recommendation of the Scottish Law Commission through the Bankruptcy and Diligence Bill, the government will continue to consider and discuss with interested parties what changes should be implemented. They have said that they do not want to make any changes before the Land Registry's e-conveyancing is running smoothly. They are putting the issue (for England & Wales at least) "on the back burner".

The delay will come as a relief to most practitioners and clients. Over the next few years, it is likely that we will move to full electronic filing of company charges to bring the system into line with e-conveyancing. At that time it will be necessary to think again about the implications for priorities, Slavenburg issues and the loss of the conclusive certificate, but it seems unlikely the more radical changes to English security law as originally proposed will happen in the near future.