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Statutory Changes To The Way You Collect Your Debts


The court are implementing a new Pre-Action Protocol for Debt Claims (the “Protocol”) which came into force on 1 October 2017.

What does the Protocol mean to you and your business?

The Protocol only applies to debts owed to a business by individuals and sole traders. As of 1 October 2017, in all letters of demand you send to an individual or sole trader:-

  1. You are now required to include in your Letter of Demand how the debt has arisen, whether this is by an oral agreement, and, if so, you must include details of who made the agreement and what was agreed, along with when and where it was agreed;
  2. If the debt arises from a written agreement you need to detail the date of that agreement, who were the parties to the agreement and state the fact that a copy of the written agreement can be requested by the debtor from you;
  3. With your Letter of Demand you are now also required to enclose the following:-
    3.1a prescribed ‘Information Sheet’;
    3.2a prescribed ‘Reply Form’;
    3.3a financial Statement of Means Form.
  4. With regard to the time limits to respond to your Letter of Demand, the debtor should be allowed at least 30 days from the date of your letter of claim before you instigate any court proceedings.
    4.1 If the debtor has responded to the Reply Form but no agreement is reached, then the parties should take stock of their positions. The creditor should then send a further letter giving the debtor 14 days before proceedings are instigated.

Should I be complying with the Protocol?

With the Protocol, if you do not allow your debtor 30 days to respond to your letter of demand, the risk is that there could be cost sanctions against you if County Court proceedings are issued. These could include cost orders, orders relating to interest and unless orders.

A further issue you need to consider is that the Reply Form itself (as set out at point 3.2) subsequently expressly states that the debtor has 30 days to respond to the Letter of Demand. Should you issue County Court proceedings prematurely, is your debtor going to use this as an excuse to file a spurious defence which will incur unnecessary time and costs for you?

What Is Lupton Fawcett’s View of the Protocol?

We understand that for the creditor who is constantly frustrated by bad debtors that the Protocol does not appear very commercial for operation in the business world, especially when the debt has probably already gone through your internal credit control process.

Lupton Fawcett pride itself on offering commercial solutions on how to deal with the Protocol in practice. Should you have any concerns regarding it, or any debt recovery issues in general, please do not hesitate to contact Dan Elsworth, a Senior Debt Recovery Executive in Lupton Fawcett's Debt Recovery Team.

Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.


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