Scottish business debt decrees hit record low

The number of debt decrees registered against Scottish businesses fell to a record low last year, according to figures released by Registry Trust, which collects decree and judgment information from jurisdictions across the British Isles and Ireland.

The non-profit organisation found there were 2,192 decrees issued against businesses in Scotland during 2017, 38 percent fewer than the previous year.

In Scotland, Registry Trust 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.

The fall in decrees registered, coupled with a 58 percent decrease in the mean average value of a business decree led to the total value of business judgments plummeting 76 percent to £12 million, the lowest on record.

The extent of this decrease was in part due to two large judgments to the value of £21.5m in 2016. Excluding these decrees, there was a 51 percent decrease in the total value of judgments; the mean average business judgment fell 20 percent to £5,495.

The drop in the mean average value of business decrees was caused by a sharp decrease in the mean average value of judgments against companies; by contrast, for generally smaller unincorporated businesses, there was a five percent increase in mean average value.

During 2017, 22,763 debt decrees were registered against Scottish consumers, nine percent more than in the previous year. The combined value of all consumer decrees was £64m, just two percent higher than 2016.

The mean average value of a consumer decree decreased seven percent. Dropping 10 percent, the median consumer judgment stood at £1,228 during 2017.

The number of ordinary cause decrees issued fell one percent; decreasing four percent, the median value of an ordinary cause decree also remained close to 2016’s figure.

Only 3.67 percent of decrees were marked as satisfied in 2017, far lower than the 13.04 percent of satisfied debt judgments in England and Wales, where satisfaction rates are generally higher owing to legal differences.

These figures reflect similar trends to those shown in the provisional statistics released by the Accountant in Bankruptcy. Corporate insolvencies decreased 15 percent compared to 2016 and personal insolvencies increased year-on-year by eight percent.

“The sharp fall in decrees against Scottish companies last year was good news for the Scottish economy,” said Malcolm Hurlston CBE, chairman of Registry Trust. “Successful borrowing and fewer decrees recorded set the scene for a confident 2018.

“Scottish consumers and businesses however need to make a point of telling Registry Trust when they have paid off a decree so we can mark it as satisfied and improve their record. In an ideal world claimants will tell us too but it will take time to implement a voluntary system.”

In 2017 Registry Trust received 32,734 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.

Malcolm 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.”