The collapse of the judicial system dangerously exposes small businesses


It now takes almost 12 months for a small claim to be heard

LONDON, UNITED KINGDOM, March 11, 2022 / — Delays in legal proceedings, compounded by COVID-19, allow companies to potentially cheat suppliers with their hard-earned money, a stream entrepreneur has claimed cash.

Gary Brown, founder of Debt Register, an automated digital platform to collect business debts, says a meltdown in the legal system not only fails suppliers, but also allows their customers to walk away without settling their debts, and often without any prejudice to their own credit rating.

He calculated that over the past two years the average time it takes a business to have their day in court for a small claim (i.e. less than £10,000) has risen to 50.7 weeks, or 12.6 weeks longer. taken before the pandemic in 2019.

For larger debts (fast track multi-track claims for debts over £10,000) the wait is even longer – an incredible 70.6 weeks.

“What this means in simple terms,” says Gary, “is that if you issue a lawsuit today for an unpaid commercial debt and it is assigned to the fast/multiple track in the UK court , and the company being sued is offering a defense , then we would be looking at a trial date around September/October 2023!And you have to remember that it can take two or three months of paperwork and letters to take action before to be able to issue a complaint in the first place!

“Bad companies know this and present a false defense, knowing that the plaintiff often loses the will to pursue the debt further. For larger debts, the plaintiff is forced to pay £1,000 court costs up front, which has the effect of throwing money after the harm.

Gary says bad companies also get away with increasing bad debt, but without any damage to their credit rating: Companies House gives a company 18 months to file accounts, extended to 21 months due to COVID, and credit reporting algorithms are driven from past transaction history and the latest available financial data.

Negative court data – if such data exists – is also included in a credit report, but only impacts a company’s profile if, and when, a judgment is issued: “Basically, it It could be three years after the event before another company has visibility of this company’s poor payment history – and that’s three years in which many other providers could suffer significant losses.

Gary has created an innovative fintech that allows businesses to avoid legal action delays altogether.

Simply put, Debt Register is a software platform that automatically identifies and verifies a customer’s email contacts responsible for paying bills. (Incorrect emails are still the number one cause of unanswered collection requests.) It requests payment for an invoice, which results in the company being reported to major credit reference agencies (CRA). This hurts their credit score, as well as their reputation, in an age when payment performance must be reported to shareholders.

“There are hundreds of companies that generate large volumes of often low value debt, where their only solution to late payments is to write them off or go through the courts. But with the justice system virtually at a standstill, and with no guarantee of success either way, I felt there had to be a better way. And that’s how Debt Register was born,” Gary continues.

“Debt Register offers a tangible and direct consequence for these companies if they continue to fail to pay an undisputed, overdue bill,” he adds, “and it’s that ‘consequence’ that seems to focus the mind!”

Sam Wilson
Debt register
07542375236 ext.
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