New Pre-Action Protocol for Debt Claims from 1st October 2017

On the 1st October 2017, a new Pre-Action Protocol for Debt Claims came into force. The new Protocol is slow and onerous and creditors must follow it before a claim can be issued in court. The Protocol is aimed at avoiding court proceedings and encourages parties to engage in alternative forms of dispute resolution.

The Protocol applies to all businesses, including sole traders, who are claiming payment of a debt from an individual (also including sole traders).

The process involves sending a detailed Letter of Claim to the debtor with certain prescribed contents. Creditors have to give debtors at least 30 days to respond before instigating court proceedings.

We’ve updated our Debt Recover Guide and put together a number of templates to help ensure creditors follow the right procedures (click here). For more information, contact our Legal Advice Helpline.