Proposed Court Closures Expose Necessity of Effective Credit Management
Taking legal action to retrieve unpaid debts for your business may very soon become even more difficult under Government proposals to close 91 courts and tribunals in England and Wales, including 19 county courts, in what Justice Secretary Michael Gove has labelled reducing ‘surplus capacity’.* This proposal comes alongside another announcement from the Ministry of Justice of a new consultation on court fee increases**; a rather disagreeable announcement considering March’s substantial hike in court fees. Both announcements suggest that companies wishing to take legal action against debtors are further restricted by not only the cost of going to court, but now by the location in which they can carry out court proceedings.
At CMG UK, we also question how the court system will cope in dealing with a much higher capacity of cases, as from our experience with the courts over the past 12 months has found that the service has slowed significantly and the time taken to take legal action has been extended. It is in our opinion that courts are already overextending their resources, and by closing 19 county courts across the UK this will increase dramatically once again.
Nevertheless, whether you agree or disagree with the proposals, they certainly highlight the necessity to implement an effective credit management system within your business, so that you can take ensure every possible precaution is taken to ensure you are paid before having to take legal action. This does not simply include your collections process, but the entire order to cash process must include credit management strategies; from the moment you meet a potential customer to the time you are paid, and every stage in between.
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