Bill of Sale Lending: Reforming a ‘Toxic’ Form
Gerald Swaby, Rebecca Kelly and Paul Richards
The Bills of Sale Acts were enacted in Victorian times as a form of secured credit whereby ‘goods’
owned by a borrower could be assigned under the bill of sale to a lender who would have title
to the goods transferred to him. The lender would then allow the borrower to retain possession
of the goods in exchange for instalment payments with interest. In the twenty-ﬁrst century
these bills are most commonly used as ‘logbook loans’ for vehicles with extortionate interest
rates and very little protection for individual consumers. This article examines the operational
background to the Bill of Sale Acts. It focuses upon particular concerns for consumers and
businesses and provides critique of the registration process before examining the proposals and
consultations for reform currently before the Law Commission.
Bills of sale allow individuals in the UK to use ‘goods’
that they own as security
for a loan, while retaining possession of those goods, so-called security bills of
sale. They represent an archaic regime created by Victorian legislation to allow
Victorian individuals to borrow against then every-day items such as pots and
pans, antiques, paintings and indeed any articles capable of complete transfer
On the face of things this appears to be a simple arrangement but
underlying this there is a highly complex regime that is little understood by both
debtors and lenders.
Proposals for large scale reform by the Law Commission
and the government decision to introduce a new Goods Mortgages Act by
2019 ﬁt for purpose in the 21
century are therefore long overdue to reform
this area of law.
Gerald Swaby and Rebecca Kelly are Senior Lecturers in the School of Law, University of Hud-
dersﬁeld, Paul Richards is former Head of Law School at University of Huddersﬁeld. We would like
to thank the MLR peer reviewers for their help and critique of this article in draft. Any errors or
omissions remain our own.
1 Technically the word ‘goods’ should refer to ‘chattels’, but this will be referred to as ‘goods’ for
the purpose of this article’s main text.
2See,J.Weir,The Law of Bills of Sale (Jorden & Sons, 1896) 23 and the example of a bill of
sale extending to ‘all and every the household goods, furniture, plate, linen, china, books,
stock-in-trade, brewing utensils and all the other effects’ of the grantor.
3 Bills of Sale Act 1878 and the Bills of Sale (1878) Amendment Act 1882.
4 The call for reform in this area has been longstanding. See, G. Crowther, Report of the Committee
on Consumer Credit Vol 1 Cmnd 4596 (1971) 179 4596 (Crowther report); A. L. Diamond, A
Review of Security Interests in Property (London: HMSO, 1989) 92, para 18.1.8; Law Commission,
Company Security Interests Law Com No 296 (2005). See also, the Secured Transaction Law Re-
form Project contribution to this discussion at https://secur edtransactionslawreformproject.org/
discussion-papers/https://secur edtransactionslawreformproject.org/discussion-papers/ (last ac-
cessed 19 July 2017).
2018 The Author. The Modern Law Review
2018 The Modern Law Review Limited.
(2018) 81(2) MLR 308–336
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