“The use of retention of title (ROT) clauses has had serious consequences for secured creditors. The use of ROT clauses gives a supplier priority to reclaim materials and potentially the proceeds of sale from materials which are subject to a ROT clause. Consequently, this has diminished the rights of secured creditors and has allowed suppliers, who utilize ROT clauses, to evade the rules on registration and prioritization of charges. Undertake an evaluation of this statement using case law and any suggested reforms.”

After much analysis it is clearly evident that due to the inefficiencies of the English and Welsh legal systems the use of Retention of Title clauses remains a means for unsecured creditors to jump the queue and evade the rules on registration and prioritization of charges. This has, as displayed had serious consequences for the secured creditors, such as banks for example who would normally be the first or one of the first in line. However it has also become apparent that the Romalpa clause is becoming extremely unfavourable and harder to prove with the courts now suggesting a registered charge be used. Therefore it is true to say that the Romalpa clause does give the unsecured creditor priority, although as displayed above only in certain cases and only if used correctly as not all of them have prevailed, reflecting that the unsecured creditor with a Romalpa clause may not always…(short extract)