Research Sheds Light On Rise In Contract Claims

New figures which show that the number of contract claims reaching the High Court have almost doubled in the past 12 months show how many businesses have been pushed to take desperate steps in difficult economic times.

Reports have revealed that figures from the Chancery Division show that 982 claims were issued in 2011, with both breach of contract and debt being cited as the main reasons behind such legal action.

The figure marked an increase of 44 per cent from 2010, when just 683 of such cases were believed to be launched.

Nick Bates, regional managing partner of Irwin Mitchell’s Leeds office and expert in commercial litigation, said the research showed how the economic climate has led many businesses to take desperate measures in such difficult times.

He outlined: “Businesses which are launching claims are issuing more because the need to get funds in is getting all the more pressing due to the financial pressures they are facing.

“In addition, it may be viewed that litigation in the past couple of years has been a discretionary spend, but many companies may have reached the point where all other opportunities to avoid such action have been exhausted.

“Quite simply, as people get desperate maintaining commercial relationships becomes less important. Further to that, defendant companies are likely to have less funds to pay up, so in the light of the above, may be on the receiving end of action more often.”