Debt recovery court judgements in Sligo rise by record 6,700%

CONNACHT saw a historic surge in debt recovery court judgements during 2009, while Dublin and Munster are weathering the economic storm better than most.

The total value of court judgements against businesses in Connacht soared dramatically from the fourth quarter of 2008 to Q4 2009. For instance, Sligo leapt from just €9,006 to €612,365, an unprecedented spike of 6,700%.

Figures released yesterday by business research specialists ICC Information showed court judgements soared from €13m in 2008 up to €36m in 2009.

The average value of court judgements in Ireland increased by 54%, rising from €11,452 in Q4 2008 to €23,778 in Q4 2009. The volume of judgements, however, decreased from 2,065 down to 1,531.

Michael Gannon, ICC Information product and marketing leader, said: “The average value has gone up hugely, but that has been distorted by the large judgements in construction. That was happening throughout 2009. There will be an increase in court judgements this year, and we don’t expect the trend to change anytime soon.

“The higher value sectors like construction are the ones in most trouble. As a rule, you are more likely to be sued in industry, but we also think there will be an increase in retail and hospitality court judgements this year.”

Construction accounted for 31.4% of all judgements filed, totalling €11.4m. Manufacturing and business activities hit 14% and €5m, respectively. Hospitality reached €2.9m, with another €2.7m in real estate and renting.

Naturally, Dublin companies accounted for the majority of total judgements at 36% and €13m of the total, with Cork next at 13% and €4.6m. Companies in Kilkenny, Clare, Longford, Carlow and Laois were the lowest offenders, with less than 1% of the total value each.

However, the surge in court judgements in Connacht attracted the greatest geographical concern, suggesting an entire province on its knees.

Michael Gannon notes: “Leitrim and Sligo saw huge increases in value, as did every other county in Connacht. That massive increase must be very upsetting for business in the west.”

“When you hear of ghost estates in the media, Leitrim is always mentioned. These figures confirm that impression. Business is struggling, and money is drawing to a standstill in Connacht.”

While construction was by far the worst hit sector, Mr Gannon pointed out a notable trend in retail. While smaller retail outlets such as independent fashion stores tend to leave themselves open to debt recovery court judgements due to their sometimes less stringent approach to financial management, ICC is predicting that the same fate could occur with larger retail outlets and the hospitality sector during 2010.