Will company insolvencies continue to decrease?

Government insolvency data released this month showed a 43% decline in company insolvencies in August 2020 as compared to August 2019, continuing a trend seen in the statistics for the previous quarter. Stuart Evans, Head of Commercial Litigation at BLM, questions whether the tide will turn in the midst of Covid-19.

For the last month, government data revealed a fall in company insolvencies of some 43% compared to August 2019. Company voluntary liquidations were down by 39%, compulsory liquidations down by no less than 67%.

On the face of it, those are remarkable statistics given the deep economic impact Covid-19 has had, and reflected the trend seen in the previous quarter. With the impact of the coronavirus, and regular news of high profile casualties – on the High Street in particular – how can this be possible? Whilst this trend can be explained, it is not one that can continue for much longer.

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Stuart
Evans

Partner , London

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