Only 20% of court judgments recovered

Only one-in-five court judgments is ever satisfied, according to the Law Society of Ireland, leaving banks and the revenue commissioners hundreds of millions of euro out of pocket.

The chairman of the litigation committee with the Law Society, Eamon Harrington, said that due to the nature of the economy, a lot of people simply cannot pay the court judgments that are secured against them.

“In terms of enforcing judgments, if the target debtor falls into the ‘can pay but won’t pay’ then the success rate can be 100%. However, by way of generalisation, given the current levels of heavy indebtedness and negative equity, the general recovery rate is currently closer to 20%, but creditors still prefer to obtain judgment so as to protect their position,” said Mr Harrington.

In the first six months of this year, there were almost €500m in judgments registered in the courts against businesses and individuals, according to the information services company, Experian.

Along with the banks, the Revenue Commissioners are one of the most active institutions in securing court judgments against creditors.

In the first six months of this year alone, the Revenue has secured 889 civil court judgments valued at €54.7m, while in 2011, the authority secured almost €95m in judgments.

A spokesperson for the Revenue said that due to the nature of the judgment process, they wouldn’t be able to provide a breakdown on the number of court judgment which have been satisfied.

“Due to the manner in which the information is collated, we’re not in a position to provide a breakdown of the percentage of civil judgments paid,” a spokesperson for the Revenue said.

Based on the average recovery rate according to the Law Society, the Revenue will only recover about €10m of the €50m worth of judgments they have secured against creditors.

The Revenue has been more successful in recovering fines against people for criminal tax evasion. Fines valued at €439,000 have been imposed following 30 convictions secured in the courts already this year.

The Courts Service is responsible for collecting all fines imposed in criminal cases. Recent improvements in collection methods have resulted in recovery rates above 70%.