No abstract

In September 2015 Lord Hodge published an article in the Edinburgh Law Review which concluded that there can be no room for Scots law particularisation in the sphere of commercial law, as it could only increase transaction costs (as to which, see Hodge, “Does Scotland need its own Commercial Law?” (2016) 19(3) Edinburgh Law Review 299). Whilst agreeing with Lord Hodge, in this article Jonathan Hardman proposes a different model for potential reforms of Scots commercial law – refocusing on lowering transaction costs using empirical economic analysis. This model is then applied to various elements of the Scots law of security, before being critiqued for its limitations.

Scottish limited partnerships (SLPs) have been the focus of much press and government attention due to their use for fraudulent activity. Recent developments appear to have slowed the speed of incorporation of new SLPs. However, this article argues that current reforms may not help tackle existing fraudulent SLPs. This does not matter as existing arguments from partnership law can be applied to combat fraudulent SLPs. By viewing the limited partnership as a general partnership with some additional features, we can identify that fraudulent SLPs have ceased to exist, and SLPs which have moved entirely offshore may have lost their separate legal personality. That this has been so far missed can be traced to current organisational theory. The current received wisdom is that separate legal personality is a gift from the state. However, the Scottish example demonstrates that this cannot be universally stated to be the case. This article therefore identifies the implications of reconceptualising the SLP for wider organisational theory and identifies options for state gift thinkers to reformulate their wider claims. Either the claim that separate legal personality derives from the state needs to be diluted to near tautology, or it needs to be limited in geographical extent. Both have theoretical and practical implications, and impact future law reforms.

The final provisions of the UK’s Companies Act 2006 have now been in force for 10 years. Part of this regime included a new form of model constitution, known as the Model Articles. This article uses empirical data to establish whether the Model Articles have been used in practice or not. To do so, it tracks the constitutions of a sample of companies (those incorporated in Scotland in October 2009) from their incorporation until December 2017. It undertakes a leximetric methodology to code 12 variables across the constitutions, with a 0 being coded for convergence to the default regime and 1 being coded for divergence from the default regime. The results show that the majority of companies do not deviate from the default regime, other than in one respect: most allowed for the ability to appoint alternate directors. More importantly, however, the dataset shows that few of the sample companies amended their articles of association following incorporation, and that there is a strong correlation between certain coding patterns and the presenter, or formation agent, used to incorporate the company.

Agency cost analysis is a fundamental aspect of Anglo-American company law theory. Within the company three types are said to exist: director/shareholder, majority/ minority and firm/outside world. Whilst law is, doctrinally, consistent at mitigating the first of these (the paradigmatic corporate agency cost), it fails to mitigate the second. Several features of UK company law exacerbate this agency cost, which is felt most acutely in private companies. Ostensible protections for the minority fail to mitigate these issues. This raises questions for company law theory: should law provide additional minority protections, or do fundamental differences exist between categories of agency costs identified within the company? Company Law, Corporate Law, Agency Costs, Private Companies, Minority Shareholders, Minority Remedies, Doctrinal Analysis, Economic Analysis of the Law