New Pre-action Protocol for Debt Claims

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New Pre-action Protocol for Debt Claims

This October the new pre-action protocol for debt claims came into force.  It applies to business creditors attempting to recover debt from an individual (this includes sole traders).

Whilst the new protocol might help businesses and their debtors reach a resolution that may not otherwise have been reached, it will ultimately increase costs for both sides.  And, greatly increase the amount of work that must be done before even straightforward debt claims can be issued.

Critically for TM Law clients, the Pre-action Protocol means the courts will now have even more ways to scrutinise their pre-action behaviour when considering costs. And, compliance with the protocol is vital if the dispute results in litigation and parties want to recover costs from the other side.

To help businesses comply with the new protocol, we asked TM Law solicitor and debt recovery specialist Terry Maylin to outline his advice and created this simple guide.

Terry says, “put simply, if you are a business and are owed money by an individual, you must now make certain that you comply with the Pre-action Protocol before issuing court proceedings.  If you do not then you will likely face cost consequences.”

Pre-action Protocol Guide

  1. Write a letter of claim, including certain information as well as contact details.
  2. Include a reply form to enable the debtor to respond to it within 30 days.
  3. Consider that the debtor can request documents. This 30 days does not begin until these documents have been supplied.
  4. The debtor can agree with the dispute, and make an offer to pay in instalments.
  5. If this is the case, the debtor would then provide a statement of means, so the creditor can consider if the offer to pay by instalments is reasonable given the debtors financial circumstances.
  6. You must also give the debtor a chance to resolve any dispute by discussion, negotiation or more formal mediation.
  7. Once the Pre-action Protocol has expired you must give the debtor 14 days’ notice of your intention to issue proceedings.




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All of this means one thing for you – delay.

Our advice is don’t leave unpaid debt outstanding.  Chase the unpaid invoice straightaway, and remember that there is now a minimum 30 day delay once the initial letter is sent to debtor.

In our experience the longer a debt is outstanding the less likely it is that it will be recovered, much better to chase as soon as it becomes overdue.

As specialist debt recovery solicitors we are all too aware of the impact late payments have on the Essex small businesses we help.  There are no hard and fast rules to make sure you get paid.  But, there are simple steps you can take to make it easier to recover money.

For more advice on safeguarding cash flow, and debt recovery look at our recent blog article ‘5 ways to speed debt recovery.


About TM Law – Specialist Debt Recovery Solicitors

Based in Hockley, Essex, TM Law is a small and dedicated solicitors.  With many years’ experience, helping business owners and local individuals with matters of personal injury, compromise agreements, employment disputes, debt collection, commercial disputes and much more.

As a specialist debt recovery solicitors, TM Laws’ knowledge of the debt recovery system available to recover money is second to none, and their approach is proven to achieve maximum recovery for minimum outlay on behalf of local business.

For a personal service, practical advice and quick recovery of your money contact us today.  We offer a fair, fixed fee service and we’re always happy to help.

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