Debt recovery firm reveals over 40% rise in demand for legal services
A leading credit management and debt recovery company says demand for legal services has increased sharply over the past 12months and is showing no sign of slowing down. Credit Style, based in Sheffield, has revealed the average number of legal actions they have commenced on behalf of clients has grown significantly from just over 13,000 cases to almost 19,000 in the past year alone.
Previously, cases related to legal services at Credit Style have remained relatively consistent, with requests of this nature almost identical in volume at circa 13,000 throughout 2019 and 2020. However, those statistics do not consider the impact of the coronavirus lockdowns, which caused a significant backlog to services and left many creditors with debts unpaid going into last year.
Today, more businesses than ever are desperate to resolve cases that have been overlooked and left outstanding, resulting in an uplift of over 40% in legal service requests. A CCJ (County Court Judgement) often remains the best route to ensure monies are recovered when a debtor continuous to ignore pleas to pay what they owe. Evidence from the Registry Trust confirms the new data suggested by Credit Style that cases are growing, showing there were 958,549 new judgements processed in 2021, a 32% increase in the number of judgments compared to the previous year.
Whilst the amount of people facing legal action suggests a post-pandemic mindset shift will need to be addressed in the long term, the immediate task for many companies is to resolve as many cases as they can to keep their company afloat. Court action and intervention can therefore expect to keep gaining prominence, as more and more out of pocket creditors attempt to recover vital funds and secure the future of their businesses.
This has all been compounded by the ongoing energy crisis, as many utility firms have collapsed in the face of wholesale energy prices that continue to soar. Credit Style has seen an 80% increase in incoming calls, mainly attributed to insolvency contracts in this timeframe.
Richard Martin, Operations Director at Credit Style says, “There is undeniable pressure on creditors and the courts presently, to fix the ongoing circumstances related to unpaid debts. The rise in demand we have seen for legal services, combined with the influx of calls we are receiving related to the energy crisis, is also putting pressure on debt recovery firms, as we find ourselves busier than ever.
“Whilst the increased need for court interjection is a negative trend that must be addressed, it should be noted that this increase in demand has had some positive connotations for careers in the sector. Businesses like ours require experts that can specialise in legal cases as well as those who can handle cases of insolvency and the crystalised debt formed after a utility provider goes bust. We have already seen over a dozen temp-workers convert into permanent members of staff in response to this increase in demand, and we will certainly not be alone in this regard.
“Only time will tell if this increase in legal requests will plateau or maintain its upward trajectory beyond 2022, but both our annual figures and the most recently published industry data suggests demand is only continuing to grow.”