Debt Recovery Update: Reflections Upon Collections
19 January 2016
Indicators suggest that 2016 will be a busy year once again in the Irish Courts, not least with appearances by high-profile litigants, among them a number of sitting TDs as well as prominent businessmen. Many of the cases involving them are listed for hearing before the High Court and Court of Appeal over the next few months. Nationwide, listings show that the Circuit Court remains busy with residential repossession cases.
At the same time, the improving public finance situation has signalled the green light for long-awaited staff recruitment and promotions by the Courts Service, as well as the building/refurbishment of certain Irish courthouses. Accordingly, as it has done so often in the past, activity in the Irish courts seems to reflect current Irish economic and social developments, with the logical time-lag that one might expect with litigation/court activity.
Debt Recovery Business
What of the level of debt collection activity before the courts?
Looking closely at the numbers of High Court summary summonses issued over the past eight years, the table below shows that numbers of such summonses issued in 2015 were just over 2,000, slightly over a third of the amount issued in 2010. The upward revision of the monetary jurisdiction limits in early 2014 has affected numbers, but the graph remains indicative of a broader trend.
The table below shows the number of default judgments, marked in the District, Circuit and High Courts, obtained by creditors against debtors. It indicates that such judgments peaked in 2010. Numbers then dropped steadily in the following years, down from almost 50,000 in 2010 to fewer than 15,000 in 2014. Given this figure includes those issued in all of the three above-mentioned courts, the 2014 jurisdiction changes cannot be said to distort it. When figures are released for 2015, we expect they will show that the reduction in debt recovery proceedings is continuing.
Figures for judgments that creditors actually chose to publish also reflect this trend.
The lack of credit in both the banking and business sectors in Ireland during the recession years is now being reflected in the drop-off in numbers of legal cases being taken to pursue the debt that invariably arises from the extension of credit. Few might argue that the presence of debt collection litigation is a pillar of a healthy economy, but its absence nonetheless reflects the fact that Ireland has not had normal economic activity for a number of years now. Nonetheless, most commentators agree that 2015 brought the return of such activity and fiscal returns and employment statistics seem to support that.
We predict that 2016 will also continue to be busy, with economic recovery generating further court activity, including collection litigation.
For more information, please contact a member of our Debt Recovery team.
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