In light of the recent global pandemic and economic crisis, we think it is more important than ever to provide insight into what is happening with key financial indicators such as judgments. After all, our core principle is 'Public Data for the Public Good.'
Towards the end of June we released a breakdown of judgment levels across the months the UK has spent in lockdown. A detailed breakdown of judgment levels from March 2020 through to May 2020 is available here, including a comparison of judgment levels, based on defendant type, dating back to January 2019. Summarising both number of records and amounts, the tables give insight into how the crisis is manifesting in different regions across England and Wales. As the pandemic continues to have economic effects, we will continue analysing our data to ensure that the financial reality of individuals across the UK is evidenced.
I wanted to use this blog to highlight a particularly interesting story which emerged during the period.
There was a reduction in the number of judgments being imported onto the register. We believe this was an effect of both the protective measures put in place by the government and regulators, and the partial shutdown of the court service.
The graph above focuses solely on Judgments. However, there was a very different story in regard to satisfactions. Satisfaction refers to the process of paying for, in full, a monetary court judgment, more than one calendar month from the date of judgment. Satisfactions are only registered when proof of payment is supplied to the courts or Registry Trust. This is a crucial way of improving your access to reputable lenders in the future.
Satisfaction levels have remained consistent over the last 14 months. In fact, during the weeks of lockdown, there were times when there were more satisfactions were imported onto the register than judgments, something never seen before..
*Week 14 refers to the week beginning 30th March 2020.
Due to the drop of in judgment levels, satisfactions in the last quarter accounted for 37% of all transactions processed, compared to the usual average of 13%.
There has been coverage recently in the national press that during lockdown, UK consumers paid off a record £7.4bn debt . This is a significant amount, but is likely to be a temporary trend that coincides with large reductions in credit expenditure.
The evidence from judgment data offers an interesting extension to this story. Judgments, due to their very nature, are indicators for those in the most difficult financial situations. Therefore, you might assume that during times of economic uncertainty, this would be the group that would see a fall in the amounts of debts satisfied. While the amount of judgments being satisfied didn’t increase, it is a success that satisfaction levels stayed constant. What we can see from these statistics is that there has been a change in the balance between claimant and debtors. Whilst claimants may have turned their attentions elsewhere, there has been a continued focus on resolving debts where possible.
However, caution must be taken. Satisfaction rates may appear higher as a percentage, but this is due to the reduction in the number of judgments being taken out. The relation between satisfactions and judgments is important to observe, as proportionally there is greater debt being paid off but in absolute terms it is consistent. This is an important finding as it ensures that attentions are not drawn away from debt support and advice. Instead it demonstrates that preparations must be made to anticipate the uptake in judgments which is likely to follow the relaxation of protective governmental measures. We studied what this looked like in judgment levels post 2008 financial crisis in this blog.
In February, we launched our #GetSatisfaction campaign. The aim of the campaign was to get more attention and awareness on the importance of satisfaction for credit access. What is reassuring by the satisfaction levels, that despite not seeing an increase in satisfaction levels, the fact they have remained constant shows that those who are able to pay are clearing their debts.
We will be keeping a close eye on how these realities are evolving through the lens of judgments and will ensure to regularly touch base with this through our blogs.
For now, check out our analysis on how looking back might educated on looking forward and keep an eye out for our Half Year statistics which will be released towards the end of the month.
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