Louise Gullifer is Professor of Commercial Law at Oxford University, and Fellow and Tutor in Law at Harris Manchester College, Oxford, where she has been the senior law tutor since 1999. She has been teaching at Oxford since 1991, and, before that, she practiced as a barrister.
Her research interests focus broadly on commercial law and corporate finance and she writes extensively in areas such as security and title financing, corporate finance, corporate insolvency, personal property and set-off. Professor Gullifer is executive director of the Secured Transaction Law Reform Project and has been recently invited as a speaker at the Reform of Secured Transactions Law Conference, organized by Central European University and Chinese-EU School of Law in Budapest, on September 25.
Lawyr.it: First of all, we would like to know Professor Louise Gullifer better. What made you choose a legal career and how did your career evolve?
L.G.: At the age of about fourteen I decided I wanted to be a barrister after I saw a television program about the Bar and what being a barrister entailed, and I thought this would be a nice thing to do. Then I applied to Oxford to study Law, which, I must say, I really enjoyed. I also did a graduate program – the BCL (ed.n. Bachelor of Civil Law), on which I now teach courses in Corporate Finance Law and Legal Concepts of Financial Law.
For me, it was relatively easy to become a barrister, but I must say things were really different back then, thirty years ago. Nowadays, to become a barrister, you need to face a very competitive market, and go through lots of different, complicated interviews and other admissions processes. To become a barrister, you first have to do a pupillage (ed.n. apprenticeship to a member of the Bar, which allows a barrister to practice independently in the UK). In those days, it was reasonably easy to get a pupillage (it is now much more difficult). After pupillage, I practiced for five-six years and, I must confess, I never thought of doing anything else. I mainly practiced in commercial law, banking and banking fraud, but also did some criminal law work.
In 1991, after a short break, some people in Chambers (ed.n. organization under which most barristers practice law, though they remain independent) arranged for me to meet Professor Roy Goode, who was setting up a commercial law course for which he needed help with teaching, opportunity that I could not refuse. After a couple of tutorials, I started to do more and more teaching. I eventually never got back to the Bar as I got a permanent teaching job at Oxford University. Therefore, as you can see, I was really intending to be only a practitioner, but I ended up being an academic.
Lawyr.it: You have been teaching at Oxford for over two decades now, but have practiced as an attorney as well. Which one did you find more challenging and why?
L.G.: I believe they have different challenges. Though as a practitioner I never got senior enough to see the whole perspective, since I have only practiced law for six years, most of my friends are senior lawyers and actually some of my best friends are judges so I can see what they are going through. With regards to academia, I have been teaching for a long time and I find it very challenging, though I do love teaching. One of the reasons why I think being a professor is so great is because, maybe surprisingly, I have a lot of contact with practice. When I was at the Bar, most of my contacts were with other barristers and with solicitors who did litigation. Nowadays, for example, I interact a lot with solicitors who do not do litigation, but who are in charge of setting up transactions (rather than dealing with their later problems). To be honest, though teaching is simply great, I would probably enjoy equally going back to the Bar. Some of my colleagues from academia have done some practice as well, but I could never figure out how they found time to do it!
Lawyr.it: Your research focuses on commercial law, corporate finance, and secured transactions law. What do you consider to be the biggest challenges you encountered in researching these topics?
L.G.: Generally, they all are very technical subjects. However, I find the real challenge in trying to work out what the law is and what the law should be, taking into account both the technical law and the way in which it has developed, and what is going on in practice. Sometimes you see a practice that goes on and you get to wonder ‘But how can that really work, given the technical and conceptual side of the law?’, and getting these two together is sometimes quite difficult. See for instance areas such as financial collateral, intermediate securities, set-off. People simply do them. It is happening all the time. And then it is up to academics to try to turn them into a proper set of conceptual rules.
Lawyr.it: How is Secured Transactions law taught at Oxford and how do your students perceive Secured Transaction law?
L.G.: At Oxford, at Undergraduate level, we only teach a bit of Secured Transactions (ST) law, as part of the commercial law course, not as an independent course, and commercial law itself is only optional (around twenty-five students per year). However, if I am not mistaken, I believe we already teach more Secured Transactions compared to most of the undergraduate commercial law courses in England (although we spend only three weeks on this), and this is because of Professor Roy Goode who set up the course. But, from what I noticed, students love it, possibly because, while technical, it is very interesting.
At Graduate level, where students come from all over the world, we have quite a lot of students (around forty) who already have an interest in Corporate Finance, some of whom who have already practised in the field. At Oxford, we do not do a separate course on Secured Transactions Law as such, but several courses cover ST elements, such as securities, financial collateral, intermediate securities, securitisation. Also, at this level, though we also teach English law, it is much more of an international discourse. We try to make them think about the conceptual building blocks that are used to shift and manage risks on the financial market. We are not doing a separate class on Secured Transactions regulations.
Usually, in England, Secured Transactions Law is taught as part of several classes, so we do cover the most important concepts. What we do not do is apply the American model and teach a full, separate Secured Transactions Law course, with very few exceptions (such an exception is UCL).
Lawyr.it: Let us now inquire about the Secured Transaction Law Reform in which you have been involved, which was set up in 2010. How did it all start?
L.G.: The project was Professor’s Roy Goode idea. I was only part of the project. He has always been keen on reforming the law in England and there have been a number of government committees and commissions looking at it. Several attempts have been made starting from 2001, but none was successful enough, in my opinion, as there were too many limitations imposed. That is what he wanted to do: set up a reform project that was not bound by any scope, time or political limitations. To do that, he gathered a group of people, including myself, to work with practitioners, policy makers, and basically everyone that was interested on putting together proposals for a reform in Secured Transactions law in England. It was only a couple of years ago, when Roy decided it was time to retire, when I took over the entire project.
Lawyr.it: How did the project later evolve?
L.G.: While we have carried on with the initial project, we have also tried to engage in what was going on around the world on all fronts, and see what we could learn from different countries’ Secured Transactions law reforms. This has, in fact, led to us putting together a book on the topic, which hopefully will come out at the beginning of 2016. We also started to organise a couple of conferences.
Moreover, we have been collaborating with the English government in reforming different smaller fields, such as the registration system or overriding anti-assignment clauses. There is also a Secured Transactions Draft Code, a really interesting project with which we would like to engage, which was set up by the City of London’s Law Society. However, we are still firmly of a view that the best way forward for the UK would be a whole sale reform, along the lines of PPSA (ed.n. Personal Property Security Act, which is a statute passed by all common law provinces of Canada). Of course, we would still have to figure out what aspects of the PPSA would work best in the UK.
We use the word PPSA to describe the generic UCC Article 9 – type reform, but actually the PPSAs in different countries, though not completely different, are quite different. UCC Article 9 is quite distant from the Canadian PPSA (both in terms of drafting and content), the Australian PPSA differs quite a lot from the Canadian and New Zealand’s PPSA. There are various models to use now, so we are trying to analyse them in detail and work out what is best for UK, and by UK I mean England, Wales and Northern Ireland (as Scotland has a different status in private law, based on civil law).
As you can see, we are not just an academic project, we are well aware that we cannot be focused only on theory. We have to be practical and engage in what is going on as well.
Lawyr.it: What are the external legislative sources that you used as an inspiration? How helpful have the UCC Article 9, as well as the Australian, Canadian and New Zealand personal property security laws been in your endeavour?
L.G.: UCC Article 9 is a great source in theory, but in practice not really, as it does not translate too well in English law, primarily in terms of drafting. The Canadian and New Zealand laws were easier to use for our purpose.
Lawyr.it: What is your opinion about Secured Transactions law reforms around the world, having studied and analysed so many different attempts and processes (over 30 countries)?
L.G.: Secured Transactions law reform has lately become quite of a big thing around the world, as many states, including in Europe, have reformed their systems, or are currently working on that. Various organisations, like EBRD or World Bank, have also stepped in to help out world countries accomplish this goal. In any case, after seeing so many examples, what I can say is that successfully reforming Secured Transactions law takes a long time. It is a bit daunting, but it is actually true, as you need to make sure that everybody gets it right.
Lawyr.it: How about the reforms that were undertaken by Central and Eastern European countries? How effective would you say they were?
L.G.: I first have to mention that our information is based on what people from these countries, for instance, Lithuania, have offered us. Then, from what I could notice, many of these reforms have taken place in stages, and you can see why. It is very hard to adopt a completely new system. The problem, however, with a reform that takes place in stages, is that, until you get to the last stage, you cannot get a system that works well. This leads to a high level of complexity, as only part of your system is reformed, as well as a constant state of change.
Maybe a reason why it is very hard to assess the success of a certain reform is that you can never really tell whether a problem comes from the reform in itself or from another source. Maybe the fact that a freshly reformed system is not working well is not a consequence of a fault in the system, but of external causes, such as the financial crisis.
Lawyr.it: In your opinion, given the different manner in which several European states have reformed their ST laws, how plausible is that Europe eventually embraces one common model of Secured Transactions law?
L.G.: That is a very good question, and a huge problem is, I think, the differences between the civil and common law systems, the fact that we see things in a very different manner. For instance, a civil jurisdiction’s view on how you create propriety interests is not compatible with the English law system and an Article 9 – type system. Having said this, there are enormous efforts trying to overcome these obstacles. Such examples are the UNCITRAL Model Law and the DCFR (ed.n. Draft Common Frame of Reference) that tried to produce a common model. The thing is that, even if you harmonise the laws of several countries as it happened with the laws on financial collateral, it has to fit in with the law of all countries. If it does not fit, the harmonisation process would simply not happen efficiently.
As to whether harmonisation per se is desirable, there are, indeed, several advantages of harmonisation, particularly when it comes to assets being moved between jurisdictions. Whether that would happen is a completely different thing.
Lawyr.it: What do you think about the Book IX of the DCFR (on secured transactions) as a potential viable solution for the harmonisation of European Secured Transactions laws?
L.G.: The main question stands as how well it would fit in different countries’ legislative frameworks. For example, I think some bits of the DCFR would not work in England. Unless you reform common law in itself and how it sees propriety interests, some provisions such as Book IX of the DCFR’s would not fit within the current system. And property law is something that can be hard to reform.
Lawyr.it: What do you think will be the next big challenge in the ST field?
L.G.: One thing that will definitely be on the agenda is the extension of the Cape Town Convention (ed.n. Convention on International Interests in Mobile Equipment from 2001) to rail equipment and possibly to other mobile equipment as well. The next one would be, at least in English law, to enact a law on financial collateral. We will try and do our best to help with that, as that is an area that may become extremely problematic, as case law seems to point out.
Another area could be security of Intellectual Property (IP). This is an area that really needs to be sorted out, as smaller companies encounter difficulties in obtaining financing. One issue, specifically, that needs to be clarified, relates to the valuation of IP.
Lawyr.it: Lastly, our trademark questions: if you have to give one piece of advice from your experience, what would you recommend to law students?
L.G.: This is a very Oxford answer, but I would recommend them to make sure they read the primary materials. There is an enormous tendency to rely on secondary sources, such as lectures, textbooks, slides. I think that good law students should know well the primary materials, as that is what makes a good lawyer.
This interview was originally published in the ninth issue of the magazine, which can be accessed here.