Commercial debt judgments down 90pc as activity tails off
The value of commercial debt judgments registered in the courts in Ireland has collapsed by more than 90pc in just one year.
New figures obtained by the Irish Independent revealed that there had also been a steep fall in both the volume and value of unregistered judgments.
Registering judgments in court is usually the last port of call for creditors who are pursuing unpaid debts.
The falls reflected the enormity of the decline in commercial activity, especially in the property sector, according to industry analysts.
In the first eight months of this year, the value of commercial judgments registered through the courts was just €30.3m, compared to €137.6m in the corresponding period last year.
The value of debts collected by state-owned banks was down by some 40pc, as registered consumer and commercial debts fell by some 46pc, from €6.67m in the first half of 2010, to €3.08m in the first half of 2011.
Banks have been the most active by volume, with the figure up by more than a third.
Credit unions have also intensified the pursuit of hundreds of borrowers who failed to adhere to repayment schedules.
The value of the unpaid credit union debt has increased by two-thirds, from €5.1m to €8.6m, according to latest data compiled by BusinessPro, the debt reporting and credit bureau company.
Greg Connell, managing director of the Irish Fraud Bureau and a non-executive director of BusinessPro, which publishes 'Stubbs Gazette', said that the falls in the value of commercial debts was evidence that, in general, "most of the bad news" has already been witnessed through writedowns and high-profile court actions.
"We may be at the tail-end of that initial financial rush to judgment," said Mr Connell, who added he had mixed views about the results.
"We have not seen NAMA pick up where the banks have left off," he pointed out.
"Until we see what NAMA has done with the poor-quality debts that have been transferred to it, it is hard to draw firm conclusions."
Commercial lawyers, who enjoyed a surge in work in recent years as banks and other creditors tried to recover their debts in the courts, said the lack of business disputes unrelated to debt and lodged in the courts was actually a worrying sign as it indicated an underlying lack of commercial activity.
"The Commercial Court was introduced to facilitate economic activity, but there appears to be very little of it," said one senior corporate lawyer.