Pre-Action Protocols for Debt Claims

A new pre-action protocol for debt claims came into force on 1 October 2017.

This protocol will apply to businesses pursuing debts against individuals including where an individual acts as a sole trader. Other business to business debts are not covered.

As with other pre-action protocols, the aim of the new debt protocol is to make sure creditor and debtor enter into an early exchange of information.

Rather than send a simple 7 day letter of demand, under the new protocol, a creditor is required to send the debtor a detailed letter of claim which sets out its case and attaches relevant supporting documentation. Upon receipt of this pack, the debtor has 30 days in which to respond using a standard reply form and financial means statement which is included within the protocol pack sent by the creditor. A creditor cannot commence court proceedings within this 30 day period. Further, if the debtor wishes to seek advice but cannot do so within 30 days, then he or she must provide details as to why advice cannot be obtained and when advice is expected. The creditor should then allow reasonable extra time if it is reasonable in the circumstances.

The protocol is set out in full on the attached link:

If you would like to discuss the new pre-action protocol for debt claims and implementation of compliant processes for your business please do not hesitate to contact us. Anthony Corps Director T: 01904 755222