David Carter of The Sheriff’s Office reports that figures released by Registry Trust, show that 2014’s rise in the number of consumer judgments has continued into the first quarter of 2015. Their report shows that with consumer debt:
- There was a 30% increase in consumer County Court judgments (CCJ) in 2014, rising from 536,700 in 2013 to 698,200 in 2014, the highest level since 2011. This trend continues with a 20% increase in Q1 2015 compared with Q1 2014, which was 38% up on Q1 2013.
- There were 209,679 CCJs against consumers in the first quarter of this year, the first time first quarter consumer CCJs has exceeded 200,000 since 2008.
- The total value on consumer judgments has risen – by 20% in 2014 and by 12% in Q1 2015 compared with the same period in 2014. However, the average value has dropped to £2,171.
Malcolm Hurlston CBE, chair of Registry Trust says that the rise is due to a higher proportion of consumer debt now being in the hands of debt buyers rather than the originating lenders. The increase in numbers resulted largely from a different business model and not from a general deterioration in the experience of consumers. For this reason he says there is no inconsistency between the fall of personal insolvencies in the first quarter and the rise of CCJs.
Commercial or business debt on the other hand is continuing to fall. In 2014 corporate CCJs dropped by 9.7% and non-corporate business CCJs by 9%. All business CCJs also fell by 10% to 26,195 in Q1 2015 over the same period in 2014 and the fewest since Q1 2009, when there were 71,867 CCJs
In terms of total value, corporate debt was down by 14% and non-corporate by 20% in 2014, and 17% down across all business judgments in Q1 015 to £87.5m, the lowest Q1 result since 2008 when it was £209.7m.
High Court judgments (HCJ) are a very different matter according to David Carter – in 2014 there was overall growth of just 0.2% but consumer is only a fraction of what it was five years ago, with 445 judgments and a value of £182m in 2014 compared with 1239 judgments for £1,267m in 2010.
The drastic change in HCJs is that the value of corporate judgments doubled to £141m with the average value reaching £1,544,318, an increase of 137%, despite the actual number of judgments in this area falling by 25%.
These are small numbers, so a handful of very large judgments will skew the data, but it is still quite a shift.
In 2014, 86% of CCJs were awarded via the County Court Business Centre (CCBC)*, which is likely to have been influenced, at least in part, by the closure of 142 courts in the last Parliament, and is a trend that is likely to continue as Michael Gove** has just announced that many more will now be closed.
With the exception of the rise in corporate HCJs, the business statistics do seem to indicate a stronger economy, as well as the maintenance of better credit control that many organisations adopted during the recession. On the consumer front, it will be interesting to see whether the numbers start to level off as debt purchasing becomes the norm.
David Carter of The Sheriff’s Office
*The County Court Business Centre (CCBC) – The County Court Bulk Centre (CCBC) is in effect a central county court for England and Wales created to deal with claims via electronic documents and computer as opposed to physical hearings. If any case might require a hearing it is transferred to another county court.
The increasing use of computers and Internet access in court work emulated work carried out in other countries such as Canada on alternative dispute resolution (ADR) by electronic means and led to the English court system allowing greater use of information technology to run court proceedings.
**Michael Gove Speech on Civil Justice – “What does a one nation justice policy look like?”