The number of companies receiving County Court Judgements (CCJs) in the first quarter of the year have increased dramatically.
Between January 1st and March 31st, there were 51,174 judgments made against businesses according to detailed figures compiled by The Registry Trust.
This was up 46.4% from the previous quarter and up 34.6% from the same period in 2024 when 38,028 judgments were made.
If the number of judgements continues to rise at this level then it will surpass the 173,025 total seen in 2024, which itself was an annual increase of 35.5%. The first quarter numbers are already a third of the yearly total from 2024.
The majority of judgements – 87.8% – were unsatisfied.
Every company that receives a CCJ is at a higher risk of insolvency going ahead than other businesses but sole traders could find themselves in even more jeopardy.
This is because Limited companies enjoy specific legal protections when it comes to their business debt that isn’t shared by sole traders. If they go on to receive a CCJ then they would be expected to settle any outstanding debts from their own personal assets or bank accounts.
A CCJ is not like a winding-up petition, which has a legal standing to compel companies to repay their debts (or face being closed through a compulsory liquidation if they can’t).
Instead it gives High Court Enforcement Officers (HCEOs) and bailiffs the legal right to visit business premises – including the home of a sole trader if they are one and the same – and seize company assets up to the value of any outstanding debts.
Additionally, CCJs are also publicly available to view via the Register of Judgements, Orders and Fines so any creditor, customer or supplier can find it. CCJs also make future borrowing more difficult to obtain and more expensive as a result due to unpaid CCJs remaining on business credit files for six years.
Chris Horner, insolvency director with BusinessRescueExpert, said: “Receiving a CCJ doesn’t mean that a business is definitely going to go into insolvency or be liquidated – but it’s a distinct probability.
“Depending on the individual circumstances of a business, they’ll usually have more options than they believe they have but they’ll only find out for definite what they can do if they have a conversation with an expert first.
“We offer a free initial consultation so they can quickly understand their position and what their next moves could be.
“The sooner they take action, the better for their business.”