Debt judgments fall to lowest level since 2008 crash

News Article

The number of debt judgments recorded against businesses in the county courts of England and Wales during 2015 fell to its lowest level since before the 2008 crash, marking the sixth consecutive year of improvement.

The figures released this month by Registry Trust are a clear sign that businesses are once more on top of their borrowing.

Registry Trust, a non-profit organisation, which collects judgment information from jurisdictions across the British Isles and Ireland, operates the Register of Judgments, Orders and Fines on behalf of the Ministry of Justice.

Andrew Skinner, a partner and head of Debt, Possession and Insolvency at Palmers, said: “A judgment is incontrovertible proof of unmanaged debt. There were 100,072 County Court Judgments (CCJs) against businesses in England and Wales during 2015, down seven per cent on 2014 and the fewest since before the financial crisis.

“The total value of CCJs decreased 11 per cent to £336 million last year, with the average value of a judgment falling four per cent to £3,357.

“Taking inflation into account, the latter represents a decrease of 39 per cent on 2008.”

A factor affecting judgment values has been the increasing role of debt buyers. Both incorporated and unincorporated businesses are included in the statistics, but there was no marked difference in the figures affecting their relative performance.

The number of High Court Judgments (HCJs) against businesses fell 56 per cent to 109 in 2015, a sharp decrease from an already low base of 246 in 2014.

The total value of HCJs fell 54 per cent to £83 million during 2015, a complete reversal of the previous year’s steep increase to £175 million. The average value of a HCJ saw a relatively small rise of seven per cent to £764,000, owing mainly to a near 50 per cent increase among unincorporated businesses.

Andrew added: “These latest figures show just how resilient businesses have been, with many having weathered the economic storm well.

“However, despite the general fall in judgments, a number of companies continue to struggle; with outstanding debts and poor cash flow still responsible for many business owners finding themselves in financial straits. In such cases it is important to seek professional advice to mitigate debt before matters come to a head.” For advice on issues relating to commercial debt and insolvency, please contact us.