According to government statistics for January to March 2023, County Court claims were up 8% year-on-year to 443,000, the highest volume since Q1 2020. Of these, 371,000 (84%) were money claims, a year-on-year increase of 9%. Judgments were up 15% at 264,000, with 91% of these being default judgments.
These alarming statistics come against the backdrop of a justice system that is only just beginning to recover from the effects of the COVID-19 pandemic. Court closures and restrictions caused significant backlogs and there are still lengthy delays in cases coming to court.
Defended cases over £10,000 are taking an average of approximately 80 weeks to get to trial. Cases involving less than £10,000 can take anything up to a year.
Although the courts are particularly busy right now, that shouldn’t put you off taking legal action if it’s necessary. There are a number of ways you can prevent delays and reduce defended claims.
Act fast and be persistent
The sooner you take action to chase an overdue debtor, the better. If you don’t, there’s a danger you’ll be seen as a ‘soft touch’ and the debtor will prioritise other creditors. There’s also the risk that the debtor may relocate and become difficult to track down.
It’s also important to remember that debt default can be a symptom of more serious financial problems. The business may go bust, which means you’re unlikely to get back all of the outstanding amount due to you. In fact, if there are no funds or assets available, you may get nothing.
Of course, you may not have the time or resources to chase the debt effectively or follow through with legal action. If that’s the case, it could be time to seek professional help from a debt collection agency. They can act quickly, using their experience and expertise to achieve a successful outcome.
Maintain good records
Throughout the debt collection process, it’s important to keep a paper trail, which can be used to support your claim if necessary. This will strengthen your case against the debtor and reduce the risk of delays in court proceedings.
Follow pre-action protocols
To ensure legal action proceeds smoothly, it’s important that appropriate measures are taken and protocols followed before making a claim in the courts. This will reduce the risk of issues arising in the proceedings, which could cause additional delays.
Before making a claim for a County Court Judgment, it’s usual to send what’s typically referred to as a ‘letter before action’. This will state your intention to take things to the next level if the debt is not settled within a specified time frame.
If the customer is an individual or a sole trader, wording the letter in the right way and including certain specified information, such as the amount of the debt and how it can be paid, can ensure you comply with the litigation Pre-Action Protocol for debt claims.
You should also bear in mind that there’s a time limit for taking legal action. If you don’t register your claim within six years, the debt will become ‘statute barred’, which means you’ll be unable to enforce recovery via a court judgment.
Consider accepting settlement
To avoid a lengthy legal battle, it may make sense to negotiate a settlement agreement with the debtor. You’ll at least get a proportion of the money you’re owed relatively quickly and you could save a lot of time and further expense involved in taking the claim through the courts.
Stay on top of overdue debts with our support
At Redwood Collections, we can relieve you of the stress and worry of chasing overdue debts. As one of the UK’s leading debt collection agencies, we have a strong track record of success. We’re highly responsive and we work on a ‘no collection, no commission’ basis, which means it’s in our interests to recover the debt for you as quickly and efficiently as possible. With the support of Redwood Collections, your business can Grow Stronger.
