Summonses, judgments and liquidations drop – some statistics showing trends in litigation by Louis Rood, Consultant at Fairbridges Wertheim Becker (Cape Town)

Statistics South Africa reports that the number of civil summonses issued for debt in the country dropped by 11% from May 2014 to May 2015. This mirrors a steady decline in the number of civil summons issued for debt over the past four years. In May 2011, there were over 100,000 civil summonses issued for debt. By May 2015, this had dropped to 63,000. That is a significant decline.

The number of civil judgments recorded for debt also dropped by 7.2% from May 2014 to May 2015. In May 2011, there were 45,000 civil judgments recorded for debt. Four years later in May 2015 this had dropped massively to 25,000 judgments.

In the Western Cape, the number of civil summonses issued for debt actually increased from 9,760 in May 2014 to 11,421 in May 2015. For the same period in Gauteng however, the number of civil summonses issued dropped by 21% from 25,278 in May 2014 to 19,956 in May 2015.

In the Western Cape, the number of default judgments in the Western Cape dropped by 20% from 4,095 in May 2014 to 3,267 in May 2015. For the same period, the number of civil judgments for debt in Gauteng dropped from 6,519 in May 2014 to 6,300 in May 2015.

The number of liquidations in South Africa dropped by 20,6% in one year from June 2014 to June 2015. This also mirrors a steady decline of more than 50% over the past six years in the total number of liquidations, from 4,133 in 2009 to 2064 in 2014.

Over the same six year period, the insolvencies of individuals have also dropped by 49% from 6,078 in 2009 to 3,102 in 2014.

What this means is that there is not less debt or fewer defaults. It mirrors a shrinking economy where there are less transactions taking place and as a result fewer failures to pay. The introduction of the National Credit Act has also probably had a negative influence, with less credit being granted.

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