…welcome back pop pickers! Yes I’m still mired in the 80’s but it’s my blog so I’ll cry if I want to. You surely all remember Tom Cruise in Top Gun, and its naff but catchy theme tune, but who now remembers that it was the band Berlin who played the song?

But I digress; it’s time to review the Insolvency Service’s latest statistics for the period July to September 2015. Yup, you guessed, they don’t take my breath away, there’s no radical shift this time round. If Q2 showed a continuing downward trend in the number of corporate and individual insolvencies then it’s no surprise that Q3 follows suit.

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The Financial Conduct Authority (‘FCA’) having analysed the five year history of 34 million card holders has reported that credit card customers with persistent debt but who manage to make minimum repayments are receiving little help from credit card firms.

The FCA commented that these customers should be encouraged to pay off their debt when they could. 40,000 individuals were interviewed about their credit card use and the the FCA’s interim findings were as follows:

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Although it has been generally in decline for the last 30 years manufacturing is still a valuable part of the UK economy and in 2013 the UK steel industry was worth £6bn a year of which £4.9bn was generated by exports. It employed 20,000 employees - but increasingly it had been having less of an impact on the UK economy; in 1990 UK Steel represented 0.5% of UK economic output but now it is down to less than 0.1%.

Annual UK steel production is 12m tonnes whereas China produces 780m tonnes (48% of the world output). China has become the world’s steel producing behemoth and on the back of China’s rapid economic growth world steel production actually rose 96% between 2000 and 2014; mainly driven by China’s state investment in steel plants to provide the steel for China’s huge growth in infrastructure.

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I am not sure how many of you have seen the recent press reporting of the cases the Insolvency Service are bringing against the directors of Sports Direct/USC and City Link, but it demonstrates another risk for SME directors if they employ staff and their business is failing.

The prosecutions are being brought under s194 of the Trade Union & Labour Relations (Consolidation) Act 1992, which essentially outlines the requirement for a business to consult with its employees ahead of any redundancies (the provisions are summarised below) and in the event of not complying with this requirement, then the directors can be convicted of a criminal offence and fined up to a maximum of £5,000. My belief is that the Insolvency Service will then utilise a successful conviction under this legislation to form the basis of further disqualification proceedings, as the criminal offence will be prima facie evidence of misfeasance by the directors.

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New proposals from the Ministry of Justice could see further increases in court fees, with the maximum charges climbing to £20,000 or more for claims over £200,000. Opposition to these measures has been predictably fierce on the grounds of access to justice, which is purportedly a public service, becoming unattainable.

Arguments have also been put forward that these reforms could result in lost revenue for law firms, particularly in the City, due to fees in financial centres, such as New York, being more competitively priced. Further concerns have been expressed over the impact of these changes on small businesses and individuals, who would not have access to the funds required to pursue their debts through the courts and consequently could be pushed into insolvency. A worrying scenario. Could mediation, or “ADR” be a viable alternative for those who cannot afford to pursue debts through the courts?

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