Is the epidemic of County Court Judgments hurting our economy?
Kate Briscoe explains the real impact of CCJ’s on personal finance and the wider economy.
Nurses in Cardiff recently lost a court hearing meaning they will now have to pay fines incurred with Indigo Parking for parking in their hospital car parks. Seemingly unjust, as the hospital has not provided enough spaces for staff, forcing them to park in visitor spaces, these unfortunate nurses have found themselves hostages of the court enforcement that many consumers and small businesses have experience of annually.
This reminded me of the statistics released for the first quarter of 2017, showing 300,000 county court judgments issued, if that trend continues, we shall see 1,200,000 CCJ’s in 2017, a further sharp increase from 2016’s 800,000 CCJ’s.
So two million CCJ’s in just two years, how does that impact the tax paying, contributing working people? Based on the 2011 Census there are 30,766,945 adults aged between 25 – 65. These figures suggest 6.5% of them have received a CCJ in the last two years, which does not include all CCJ’s issued in the previous four years to take account of how many people have a CCJ in the population at any given time.
MOJ statistics show that CCJ’s fell between 2009-2012 but have climbed sharply in the last five years, in fact showing a 22% increase between 2016 Q1 and 2017 Q1 figures.
Aggregated over the last 6 years, around 4 million UK working adults could have a CCJ; which would be around 12% of the working population. These people will be unable to secure new employment in many roles, especially finance, they may even be sacked from certain jobs. They will be unable to buy property or even rent a property in their own name without a guarantor. They will be unable to take out any credit, HP or finance of any kind, even on a mobile phone. If they do find finance, it will be very expensive indeed, so a CCJ prevents virtually all financial development or growth for six long years.
So who are all the reckless, post credit crunch lunatics still taking out debts they clearly cannot afford? And why the sudden explosion now?
From what we are seeing on the LegalBeagles forum…… pretty normal, unsuspecting and sensible people because these numbers are mainly coming from the now infamous and prevalent private parking tickets. Many are issued in dubious circumstances and the bulk nature of their operation means the appeals process is often down to persistence and determination rather than fairness, let alone justice. Council traffic wardens are models of virtue compared to the very lucrative activities of the private parking contractors who now manage thousands of private parking spaces around the UK.
A large chunk also comes from the still lingering hangover of pre-credit crunch interest free credit cards and loans which tripped up the unwary when the rates rocketed and the owners could not escape. Bank charges have also continued to cause many problems generating huge unplanned overdrafts. The banks, who invest more in aspirational advertising than service, do not wish to have visibly grubby hands from chasing down these debts. So they quite swiftly sell on the accounts for around 10% of their face value to a debt purchaser to enforce 100% of the debt, usually through the courts.
The notoriously tricky to use Money Claim online court is a thing of terror for those on the receiving end of one of its automated court claim forms. The recipient has to acknowledge quickly, then admit or defend the debt. Many people do not realise just how serious one of these forms is, ignore it and you will get a default judgment. In that event, you have 30 days to pay up or the CCJ will sit on the credit file for 6 years.
The one thing I cannot make estimates for is defaults on credit files; which are almost as damaging as a CCJ. Many people discover them months if not years after they have been placed, but ironically, even if you pay off the amount in full, the default/CCJ will stay the full 6 years; which rather defeats the point of using court action or credit rating damage to encourage repayment and responsible conduct.
The bottom line is that the UK population is being hit with a baffling array of extra fees and charges for things like parking, banking and phone usage. But nowadays, the companies just issue a court claim to enforce the debts, often for very small amounts. It is a shame that such small debts get treated with exactly the same level of seriousness as a £9,000 claim to recover money owed from a business colleague or similar.
While the MOJ considers the future online court, perhaps they should consider a different system for debts under £1000; which simply should not be able to cause such huge personal financial impact. Many companies boast of issuing tens of thousands of court claims monthly against consumers, that should not be a proud boast, it should be a warning cry that the system is being abused by profiteers and bullies, who ignore requests for defence extensions, who don’t send documents to prove their claims, who deliberately trip up the unwary and use their superior knowledge of the Money Claim online processes to get a default judgment at the earliest opportunity. Perhaps also, the county court is not the appropriate venue for deciding ‘petty’ parking tickets? An online payment, query and appeals system could be a far more suitable system which would save millions in court costs and mitigate the clear economic damage being caused by a tidal wave of small judgments.
If 12% of our economically viable population is unable to contribute to growth for 6 years, just when we need our country to function at its very best, then we need to reconsider the balance of justice clearly being threatened and fuelled by the commercial bulk use of our tax payer funded justice system.