The number of commercial and consumer judgments businesses had to deal with rose significantly during the first six months of the year as financial pressures pushed businesses towards legal action to recover debt.
According to new data from business information company CRIFVision-Net, the number of commercial judgments between January and June increased by 130% compared to the same period last year, while the number of consumer judgments increased by 56%.
The manufacturing sector saw a 450% increase in the number of commercial judgments while the hotel and restaurant sector saw a 233% rise. Construction saw an increase of 132%.
The average value of commercial judgments rose from €25,320 to €64,038 — a 152% increase.
The value of consumer judgments increased to €182m during the first six months of the year compared to €27.6m during the same period in 2023. The average judgment was valued at €944,212.
Managing director at Provision-net, Christine Cullen, said the increase in the number of both business and consumer debt recovery since the start of the year highlights “mounting financial pressure, a lack of forbearance, and a growth in relying on legal recourse for debt recovery”.
Ms Cullen said the key contributing factors for these increases include the higher cost of living, inflationary pressures, as well as higher interest rates.
All this has “put pressure on the ability of both corporates and consumers to meet their financial commitments”, she said.
The company also recorded 409 insolvencies during the first six months of the year.
The conclusion of the Government’s pandemic support measures has been cited as a challenge for many Irish businesses, according to the company.
The data shows that 40% of these commercial judgments were filed by Revenue with CRIFVision.net, suggesting this shows businesses are not yet out of the woods from the hangover from the pandemic.
The rise in commercial judgments coincided with the ending of the Government’s tax warehousing scheme in May.
Additional startup data published by CRIFVision-Net shows that there has been a 4% increase in the number of startups so far this year.
Ms Cullen said this is “positive”, but represents only “modest growth”.
“It again demonstrates the resilience of the Irish domestic economy at a time of renewed economic uncertainty at a global level. We anticipate this growth in startup numbers will continue into the second half of the year,” she said.
In total, 14 counties saw an increase in startups during the first six months of the year. The largest increase was seen in Carlow at 19%, followed by Louth and Waterford, both at 17%.
However, 11 counties saw a contraction in the number of startups, with Roscommon seeing the biggest decline, dropping 31%.
Startup growth is expected to continue through the rest of the year.