In many respects the completion of the work by the Company Law Review Steering Group1 has marked the end of the formal review of company law and all that remains is for the Government to legislate on these matters. However, the subject of company charges has proved the exception to this and the work of the Steering Group on this subject2 has been but a preliminary measure pending further review and consultation. Indeed, the main finding of the Steering Group in this area is that the Law Commission should look into this subject and make recommendations on how it should be reformed, taking into account the very much ‘provisional conclusions’ of the Steering Group as expressed in The Final Report.3 It has to be said that this represents a most unfortunate outcome of what has been an otherwise comprehensive review of company law. Given that the subject has already been dealt with by three separate reviews, the publication of The Final Report amounting to the fourth review, a fifth review by the Law Commission is a daunting prospect. Nevertheless, the subject is of enormous significance to all companies and it is important that when reforms are eventually enacted that we get it right. Secured finance is an essential and well-used tool by today’s companies, large and small.4 Whilst some may care to debate the legitimacy5 or efficiency6 of an economic and legal system that permits financiers or credit providers to take security in consideration for their services, it remains a simple fact that this system is here to stay.7 The acceptance of security, whether good or bad, leads us to address other related regulatory areas. This chapter looks at the area contained in Part 12 of the Companies Act 1985, which provides
1 See generally Modern Company Law for a Competitive Economy: Final Report (London, DTI, 2001), hereafter The Final Report.