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Standing surety in England and Wales: the sphinx of procedural protection

Lloyd's Maritime and Commercial Law Quarterly

Standing surety in England and Wales: the sphinx of procedural protection James Devenney * , Lorna Fox-O’Mahony * and Mel Kenny † This article evaluates the protection afforded to non-professional sureties in England and Wales. In particular, the analysis considers how specific measures of protection have been developed to protect sureties in this particular legal, social and economic context. More specifically, the article considers how the democratization of credit, the decline in social welfare protection, the significance of judicial policy in consumer bankruptcy and the development of doctrinal principles and statutory protections regulating the surety contract interlink to shape the “sphinx” of surety protection in England and Wales. I. INTRODUCTION This article aims to unpack, map and evaluate the protection afforded to non-professional sureties in England and Wales. In particular, the analysis considers how specific measures of protection have been effectively developed, or not, to protect sureties in this particular legal, social and economic context. More specifically, the article considers how the democratization of credit, the decline in social welfare protection, the significance of judicial policy in the context of consumer bankruptcy and the development of both doctrinal principles and statutory protections regulating the surety contract interlink to shape the landscape of surety protection in England and Wales. The characteristics of suretyship transactions At the outset it is useful to outline the essential characteristics of suretyships and the complex landscape in which they operate. 1 This is a delicate task, for suretyships are frequently only precariously demarcated from other types of “guarantees” and demarcation problems have generated both litigation and legislation. For example, as demand * Durham Law School, Durham University. † School of Law, University of Leeds. We are grateful for the comments of the anonymous referee. The usual disclaimer applies. 1. G McCormack, “Protection of Surety Guarantors in England—Prophylactics and Procedure”, in A Colombi-Ciacchi (ed), Protection of Non-Professional Sureties in Europe: Formal and Substantive Disparity (Nomos, Baden Baden: 2007) (hereafter “McCormack”), 154. 513

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