A more efficient way of recovering debts?


On 1 October 2017, a new Pre-Action Protocol for Debt Claims came into force.

The Protocol sets out criteria which a creditor must follow prior to issuing a claim. It applies to any business claiming payment of a debt from an individual (including a sole trader) but is not applicable to business-to-business debts unless the debtor is a sole trader.

The Protocol aims to encourage early engagement and enable the parties to resolve the matter without the need for court proceedings.

steps to be taken by the Creditor

A Letter of Claim must be sent to the debtor. It should include the information specified in the Protocol, for example:

  • the amount of the debt;
  • whether interest or other charges are continuing;
  • details of the agreement which the debt arises from;
  • details of how the debt can be repaid

The Letter should enclose:

  • a Statement of Account;
  • Information Sheet;
  • Reply Form;
  • Financial Statement Form

If the debtor does not respond within 30 days, the creditor may commence court proceedings.


The debtor should:

  • set out their response in the Reply Form;
  • Request copies of any documents they require;
  • Enclose copies of any relevant documents
  • Indicate whether they are seeking debt advice

Where a debtor is seeking debt advice, the creditor must allow a reasonable period for the advice to be obtained.  Court proceedings should not be started less than 30 days from receipt of the Reply Form or the creditor providing any documents requested by the debtor (whichever is later).

Where a debtor requires time to pay, the parties should try and agree for the debt to be paid by instalments.  Steps should be taken to resolve the dispute without resorting to proceedings, for example, by discussion and negotiation.

If the matter proceeds to litigation, the court will take into account non-compliance when dealing with the management of the case.

Our view

The timescale of 30 days for the debtor to respond to a Letter Before Claim exceeds the 14-day deadline in the Practice Direction for Pre-Action Conduct which was applicable for all debt recovery matters prior to the Protocol coming into force. The Protocol also subjects a creditor to more rigorous criteria, such as the requirement to send the debtor the above-mentioned enclosures.

However, the requirement for the debtor to complete a financial statement would appear to enable matters to be resolved more quickly in cases where a debt is not disputed. The onus to settle is likely to be persuasive particularly in matters involving low-value debts. Where debt recovery is a common problem for a business, precedents can be created to maximise efficiency.


If you’d like to know more about the Pre-Action Protocol for Debt Claims and how it can benefit you as an individual or business, please contact our Dispute Resolution department – our team of expert solicitors will be able to assist.The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of November 2017.


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