Sharp rise in company debt judgments

The number of debt decrees registered against Scottish businesses rose sharply during the first half of 2018, according to figures released today by Registry Trust.

Registry Trust is the non-profit organisation which collects decree and judgment information from jurisdictions across the British Isles and Ireland. In Scotland it collects information on small claims, summary, ordinary cause and simple procedure sheriff’s court decrees. A decree is incontrovertible proof that debt has not been managed.

There were 1,573 decrees issued against all businesses in Scotland during Q1 and Q2 2018, 31 percent more than during the same period of the previous year.

A massive 64 percent rise in the number of decrees issued against companies accounted for this increase. In sharp contrast the number of decrees registered against unincorporated businesses, which are generally smaller, decreased by 19 percent.

Despite rising in number, the average company decree’s value halved causing the total value of company decrees to fall 17 percent; the total value of non-corporate decrees surged 51 percent. Together, these changes caused the total value of all business decrees to drop two percent.

During Q1 and Q2 2018, 13,190 debt decrees were registered against Scottish consumers, 20 percent more than in the first half of 2017. This combined with an 11 percent fall in average value caused the total value of all consumer decrees to increase by seven percent.

Only 3.42 percent of decrees were marked as satisfied during the first half of 2018, far lower than the 14.54 percent of satisfied debt judgments in England and Wales, where satisfaction rates are generally higher owing to legal differences.

“Registry Trust is analysing debt claimants in Scotland by sector to improve understanding of the bare statistics. Currently the four major categories are debt purchasers, local authorities, primary lenders and housing associations. The increased number of decrees against companies is more likely to be associated with more active debt purchasers than with any deterioration in the economy. The increased recording of debt problems is in the public interest, making it more likely that credit ends up in the right hands.”

In Q1 and Q2 2018 Registry Trust received 17,607 requests to search the register for Scotland online at www.trustonline.org.uk. TrustOnline allows anyone to search for judgments and similar information registered against consumers and businesses in any jurisdiction across the British Isles and Ireland.

Mr Hurlston said: “If you are considering any business transaction you would be wise to check for decrees or judgments first. It is fast, cheap and easy to look on TrustOnline.”

Business statistics
● Q1 and Q2 2018 Decrees against all businesses (compared with Q1 and Q2 2017)
○ Total: 1,573 (up 31 percent)
○ Total value: £7,413,013 (down two percent)
○ Average value: £4,713 (down 26 percent)
○ Median: £1,687 (up two percent)

● Q1 and Q2 2018 Decrees against incorporated businesses
○ Total: 1,197 (up 64 percent)
○ Total value: £4,935,712 (down 17 percent)
○ Average value: £4,123 (down 49 percent)
○ Median: £1,545 (down 14 percent)

● Q1 and Q2 2018 Decrees against unincorporated businesses
○ Total: 376 (down 19 percent)
○ Total value: £2,477,301 (up 51 percent)
○ Average value: £6,589 (up 87 percent)
○ Median: £2,109 (up 46 percent)

Consumer statistics
● Q1 and Q2 2018 All consumer decrees (compared with Q1 and Q2 2017)
○ Total: 13,190 (up 20 percent)
○ Total value: £35,298,834 (up seven percent)
○ Average value: £2,676 (down 11 percent)
○ Median: £1,272 (up three percent)

● Q1 and Q2 2018 Small claims and summary cause decrees
○ Total: 11,977 (up 20 percent)
○ Total value: £18,135,248 (up five percent)
○ Average value: £1,514 (down 12 percent)
○ Median: £1,155 (up three percent)

● Q1 and Q2 2018 Ordinary cause decrees
○ Total number: 1,213 (up 24 percent)
○ Total value: £17,163,586 (up nine percent)
○ Average value: £14,150 (down 12 percent)
○ Median: £8,162 (up four percent)