Legal inertia in secured transactions reform: how jurisdictions balance the influence of existing law and practice with the adoption of modern principles—an empirical study comparing Thai, Philippine, and Japanese law

Abstract This article has examined the influence of conventional rules, established practices, and commercial realities as potential factors leading to deviation from the modern principles set out in the Model Law. In carrying out this analysis, it focuses on rules which concern the perfection and priority of conflicting security interests in tangible movables and compares the laws of Thailand, the Philippines, and Japan as a case study of jurisdictions which adopted secured transactions reform legislation following the international advancement and adoption of the modern principles. While it is undoubtedly true that long established conventional rules and practices do not necessarily preclude wholesale legislative reforms which align with the modern principles, the reluctance of legislators to entirely abandon these well-established rules can be readily observed. It is as a result of confrontation of legislators with a question of public policy: To what extent should they respect the established commercial realities and practices of domestic secured transactions?