Lovetts, the debt recovery legal firm has revealed an alarming increase in cashflow difficulties faced by UK businesses during the past year, exceeding levels last seen during the recession.
In 2015, over half of all County Court Claims to recover debt, resulted in a County Court Judgment (CCJ) because the debtor was unable to pay. This is the highest level seen in over 6 years. The findings underline warnings from George Osborne that 2016 has opened with a “dangerous cocktail of new threats” and support recent reports of a downturn in business confidence.
Lovetts has seen a similar pattern in its own debt recovery activity for clients. The number of cases where the Claim has converted to a CCJ was 44 per cent in 2015, up from 38 per cent in 2014.
Michael Higgins, Managing Director of Lovetts said: “There have been various warnings about the state of the UK economy, with some saying it may be the toughest year for the global economy since the financial crisis. Our own figures show the percentage of claims to CCJ conversion increased by 6%, from 2014 to 2015 – this is quite a year on year jump.”
“It is a concern that the conversion reported by the Civil Justice is even higher than during the recession, a strong indication that UK businesses are under increasing financial pressure – both those acting to recover debts and those issued with CCJs.”
