Debt claim changes

On 1st October 2017 a new procedure for claiming debts from individuals came into force, known as the 'pre-action protocol'.

Call 01905 727700 or email

On 1st October 2017 a new procedure for claiming debts from individuals came into force, known as the 'pre-action protocol'.  This lays down the process that a creditor must follow when trying to recover a debt from an individual (which includes sole traders).  The protocol does not apply to debt claims in relation to business to business debts unless the debtor is a sole trader.

The protocol sets down key stages that must be taken in relation to the recovery of the debt.

The initial letter of claim must be sent prior to court proceedings being started.  This letter must contain comprehensive information about the debt and there are a number of prescribed forms to be used.  The letter must include an up to date statement of the amount of the debt owed, including interest and any other charges that have been added.  Interestingly, the letter of claim must be posted on the same or following day that it is dated.

The debtor has 30 days to respond to the letter of claim and can request any relevant documents. The debtor must also be given a reasonable time to take debt advice if they indicate that this is a step that they want to take.

If the debtor does not reply within the 30 day timeframe, the creditor can start court proceedings to recover the debt.

The parties will be encouraged to avoid court by pursuing an alternative dispute resolution (ADR) method such as mediation. Agreement as to payment by instalments is also encouraged.

It is accepted that this new protocol will present a creditor with an increased burden in terms of administration and time to comply.  Debtors could delay payment for up to 90 days and there could be further cost and delay if ADR is pursued.

Many organisations handle their own debt recovery.  However it is clear that the new protocol will require organisations to engage more quickly with their debtors and will have to accept that a debtor may have more time under the new regime to pay.  Given the increased administrative burden, you may consider taking legal advice on the matter of debt recovery.

To discuss this or any other litigation related issue, contact us.

Members: Simon Shaw, Elizabeth Rimell and Janice Leyland.
All members of Scaiff LLP are solicitors of England and Wales. Individuals referred to in this website and elsewhere as 'partners' are members of Scaiff LLP or an employee or consultant with equivalent standing and qualifications.
Authorised and regulated by the Solicitors' Regulation Authority. The Authority's rules can be accessed at
Registered in England No. OC326884. Registered Office: 23 Foregate Street, Worcester WR1 1DN. VAT Reg No. 286 1004 73