Retention of Title in Secured Transactions Law From a Creditor's Perspective: A comparative analysis of selected (non-)functional approaches

A key feature of the 2013 Belgian Security Rights Act is the functional approach, which aims at creating equivalent legal outcomes for functionally equivalent secured transactions in movable goods despite their potential conceptual differences. The inspiration for the functional approach was found in other jurisdictions, such as Article 9 of the UCC in the United States, and international reform instruments, such as the UNCITRAL legislative guide and model law on secured transactions and Book IX of the Draft Common Frame of Reference (DCFR). Despite the enthusiasm of some states and international organizations to adopt the functional approach, some significant issues remain concerning its application.

Following a functional comparative research methodology, retention of title in the selected jurisdictions (i.e. the United States and Germany) and international instruments (i.e. UNCITRAL legislative guide and model law on secured transactions and Book IX of the DCFR) is analyzed and compared to retention of title in the Belgian Security Rights Act. Based on this analysis, (1) the selected functional approaches and their application to retention of title are clarified, (2) comparisons are made between retention of title in Belgium and retention of title in the selected jurisdictions and international instruments, (3) the application of the functional approach to retention of title is evaluated and (4) recommendations concerning the regulation of retention of title in Belgian law are formulated.