The Enduring Relevance of Pledges in English Secured Transactions Law: Delivery of Possession, Non-Registrability, and the Case Against Abolition

Abstract

Security interests are central to transactions and may be regarded as the lifeblood of secured dealings. English law recognises three typical forms of security interest: the pledge, the mortgage, and the charge. Over recent decades, pledges—the oldest form of security—have been partly superseded in practice by mortgages and charges, giving rise to debate about their abolition. This essay argues that although pledges are now used less extensively than mortgages and charges, they remain an important form of security, particularly in short-term security arrangements. To explain the relative decline of pledges in practice, the essay examines the definitions and nature of the three security interests. A pledge requires delivery of possession of an asset to secure repayment of a debt. A mortgage involves the transfer of title—legal or equitable—as security for a liability. A charge, by contrast, confers an equitable proprietary interest over the secured asset without any transfer of legal or beneficial title. Building on this doctrinal comparison, the essay analyses the distinctive features of pledges, notably the requirement of delivery of possession and the common-law concept of non-registrability, and considers their implications for the utility and limitations of pledges. It concludes that pledges retain significant doctrinal and practical value and should not be abolished.