Unmanaged debt rising among Scottish businesses

The figures released today by Registry Trust show that the total value of judgments was at its highest since before 2010.

Registry Trust is the non-profit organisation which collects judgment information from jurisdictions across the British Isles and Ireland.

In Scotland it collects information on small claims and summary causes, and ordinary cause decrees.

A judgment is incontrovertible proof of unmanaged debt.

The total number of judgments against businesses rose 5 per cent to 4,624, reversing the trend of improvement seen in recent years. The total value of judgments increased 6 per cent to £31.1m, the highest level of unpaid debt for more than 6 years.

There was some divergence in the performance of incorporated and unincorporated businesses. The number of judgments against corporates fell 2 per cent to 2,172, the lowest since before 2010.

Meanwhile, the number of judgments against non-corporates rose 12 per cent to 2,452, due largely to a 6 per cent fall in the number of small claims and summary causes decrees.

The total value of judgments against corporates stood at £20m, a 5 per cent increase on 2014 and the highest level over the past six years.

More than 85 per cent of this came from the £17.1m worth of ordinary cause decrees. The value of non-corporate judgments rose 8 per cent to £11.1m, much of it coming from the ordinary cause decrees valued at £7.8m.

“There are worrying signs for the economy in the unexpected rise in judgments against businesses,” said Registry Trust chairman Malcolm Hurlston CBE.

“The trend will need careful watching in the first quarter of 2016.”

In 2015 Registry Trust received 26,425 requests to search the register for Scotland, the bulk of which were made online at www.trustonline.org.uk.

TrustOnline allows anyone to search for judgments and similar information registered against businesses and consumers in any jurisdiction across the British Isles and Ireland.

“It is a unique benefit for consumers to be able to check the debt record of any person or business with which they may be transacting,” said Mr Hurlston. “Negative information would certainly make me think twice.”