Tough quarter for business debts

The number of debt decrees registered against Scottish businesses rose by more than a third during the third quarter of 2018, according to figures released today by Registry Trust.

There were 754 decrees issued against all businesses in Scotland during Q3 2018, 34 percent more than during the same period the previous year.

A 44 percent rise in the number of decrees issued against companies accounted for most of this increase. In contrast the number of decrees registered against unincorporated businesses, which are generally smaller, increased by just two percent.

The total value of all business decrees rose by 21 percent to £2,874,044 over the year. Within this, the total value of company decrees, rose 17 percent to £2,116,734 and the average company decree’s value fell by 19 percent to £3,398, the lowest corporate average for a third quarter, despite rising in number. The total value of non-corporate decrees increased 31 percent to £757,310 with the average at £5,781, a 29 percent increase on Q3 2017.

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.

During Q3 2018, 5,668 debt decrees were registered against Scottish consumers, six percent more than in the third quarter of 2017.

A further one percent increase on last year’s historic Q3 high in the average value of small claims and summary cause decrees set a new record, whereas a 22 percent drop in average value of ordinary cause decrees, to £13,102 gave the lowest Q3 figure on record. This combination caused the total value of all consumer decrees to remain approximately flat at £15,100,752.

Only 3.38 percent of decrees were marked as satisfied during Q3, far lower than the 15.75 percent of satisfied debt judgments in England and Wales, where satisfaction rates are generally higher owing to legal differences.

Trust chairman Malcolm Hurlston CBE said: “Both consumers and businesses need to be more alert to having decrees marked satisfied when they have been paid. It gives an immediate boost to credit records and several thousand are currently missing out.”

In Q3 2018 Registry Trust received 8373 requests to search the register for Scotland online at 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: “People can check their own records through credit reference agencies but only TrustOnline gives access to judgment information about other people and businesses. The golden rule is: Check before you transact.”

Business statistics

● Q3 2018 Decrees against all businesses (compared with Q3 2017)
○ Total: 754 (up 34 percent)
○ Total value: £2.9m (up 21 percent)
○ Average value: £3812 (down ten percent)
○ Median: £1434 (down three percent)
● Q3 2018 Decrees against incorporated businesses
○ Total: 623 (up 44 percent)
○ Total value: £2.1m (up 17 percent)
○ Average value: £3,398 (down 19 percent)
○ Median: £1332 (down six percent)
● Q3 2018 Decrees against unincorporated businesses
○ Total: 131 (up two percent)
○ Total value: £757,310 (up 31 percent)
○ Average value: £5,781 (up 29 percent)
○ Median: £1,826 (up 35 percent)

Consumer statistics

● Q3 2018 All consumer decrees (compared with Q3 2017)
○ Total: 5668 (up six percent)
○ Total value: £15.1m (down 0.2 percent)
○ Average value: £2,664 (down six percent)
○ Median: £1,215 (down five percent)
● Q3 2018 Small claims and summary cause decrees
○ Total: 5124 (up five percent)
○ Total value: £7.9m (up six percent)
○ Average value: £1,556 (up one percent)
○ Median: £1,203 (up four percent)
● Q3 2018 Ordinary cause decrees
○ Total number: 544 (up 20 percent)
○ Total value: £7.1m (down seven percent)
○ Average value: £13,102 (down 22 percent)
○ Median: £7,741 (down eight percent)