Rising consumer credit and business debt and a likely slowdown in UK economic growth, not to mention potential Brexit-inspired economic problems, point to debt recovery being a lucrative area of work for law firms in the UK in the coming years.
The future will offer opportunities to law firms which can tie up with major debt purchasing companies and which can offer one-stop-shop collection-to-recovery services. Investment in new technologies, such as predictive analytics, is likely to be a growing feature of the market as law firms aim to target their actions on those debtors most likely to pay, thereby reducing costs and improving their cost effectiveness.
These and other areas are covered in the IRN Research report, Debt-related Legal Services 2017 which provides an overview of the legal services related to debt recovery and debt collection. (see Table of Contents below)
The report (86pp, PDF), is available directly from IRN Research, priced at £180. UK sterling price is plus VAT so total price is £216.
IRN Research
Established in 1991, IRN Research is a market research consultancy with a particular focus on the legal services market. We offer a range of bespoke research services, on an ad-hoc and continuous basis, to law firms and suppliers to the sector. These services include client satisfaction surveys, market studies and competitor intelligence, client industry reports, and strategic studies. For further information on the report or our research services contact Gary Giddings on +44(0)7970829751 or ggiddings@irn-research.com URL: www.irn-research.com
This is one of a series of reports published through the year by IRN Research and a subscription to all the reports is available for £1,200 (plus VAT). Combined price for all reports purchased separately would be almost £1,650 (plus VAT). The reports included in the annual subscription are:
UK Legal Services Market Report
UK Residential Conveyancing Market
UK Wills & Probate Market
UK Family Law Market
UK Personal Injury Market
UK B2B Legal Market
UK Commercial Law Market
Debt-related Legal Services
Medico-Legal Services
PLUS: Password access to UK Legal Services Dashboard containing 50 historical and regularly updated time-series on the UK legal market.
TABLE OF CONTENTS
4 EXECUTIVE SUMMARY
4 Introduction
4 A market which is growing and presenting new opportunities
6 Some key facts about the market
6 Some key facts about the future
7 INTRODUCTION
7 An overview of the debt collection and recovery process
10 Overview of mortgage and rental debt recovery
10 Overview of the insolvency process
12 Insolvency involving property
12 Legal action often results in a second best outcome
13 Debt sales
13 There’s consumer debt and then there’s regulated consumer debt
14 Abbreviations
15 MARKET DRIVERS
15 Consumer debt under control but signs the burden is increasing
17 Did consumers control their debts or were they forced to control their debts?
18 Consumer liabilities almost £2 trillion
The burden of debt has fallen but that still leaves many adults facing problems
22 Poorer households the most vulnerable
23 Business debt declines after financial crisis but is now rising again
26 5% of businesses in the UK could be zombie companies…
26 Although most can comfortably repay their debts
27 Almost half of B2B trade is conducted on credit, making late payments an issue
27 With almost half of payments late or uncollectable.
28 Many SMEs are not sure how to recover debt
29 MARKET DEVELOPMENTS
29 It’s becoming harder for smaller legal firms to compete
30 The FCA steps up its scrutiny
31 Legal changes make it harder and less attractive to pursue legal redress
34 BREXIT impacts on insolvency rules
35 Changes to the insolvency regime
36 Online court for small claims
37 Enforcement of Judgments and Orders
38 SRA gives up regulatory oversight of insolvency practitioners
39 MARKET STRUCTURE AND THE KEY PLAYERS
39 London and regional markets
41 Over 2000 practices operate in this market
41 Debt-related work often overlaps with other legal work
42 The debt recovery and insolvency work of the top 6 UK Law Firms
45 Examples of other firms offering debt recovery legal services
55 MARKET SIZE AND TRENDS
55 The volume of debt-recovery work on the rise
57 But debt write offs fall for banks and building societies…
57 But that leaves an exposure of £91 billion…
58 And write offs remain significant for businesses
59 Almost 1 million CCJs…
61 With High Court Enforcement Officers clearing over 80,000 writs
62 County Courts now the main venue for debt cases
62 Cases filed in court are the tip of debt collection iceberg
64 Company insolvencies rise in 2016…
64 With more companies wound up in court
66 Big rise in personal insolvencies in 2016
66 Over 18,000 mortgage procession and 140,000 landlord possession claims
68 Mortgage arrears showing signs of rising
70 MARKET SEGMENTATION
70 Consumers represent the bulk of CCJs…
72 But businesses are more significant in terms of debt write offs and non-performing debt
73 Credit cards and unsecured loans the areas where most debt recovery work is involved
76 Most company insolvencies are creditors’ voluntary liquidations
77 Bankruptcies becomes less important for personal insolvencies
80 THE FUTURE
80 A future which is hard to predict
81 Debt recovery work set to rise
82 With rapid growth in the value of non-performing loans
82 And debt write-offs for businesses
83 PROFESSIONAL BODIES AND REGULATORY AUTHORITIES
83 Debt-recovery focused
85 General but covering debt recovery
