Following on from our previous blog, we explained the reasons why the Government introduced the Pre-Action Protocol for debt claims and what it aims to achieve. The protocol is designed for both creditors and debtors to give each other a reasonable amount of information so that each side can understand the other’s position. It also expects you to try to reach an agreement if you can.

Now if you are currently going through a disputed debt, these are the steps you will need to take before issuing a court claim:

Letter of claim

You (the creditor) must write to the debtor with concise details of the claim. The letter should include the basis on which the claim is made, a summary of the facts, what you want from the debtor, and if money, how the amount is calculated. The pre-action protocol sets out a detailed outline of what the letter of claim should include, which you can find here.

Awaiting response

If the debtor does not reply to the Letter of Claim within 30 days of the date at the top of the letter, the creditor may start court proceedings. If the debtor indicates that they are seeking debt advice that cannot be obtained within 30 days, the creditor should allow reasonable extra time for the debtor to obtain that advice where it would be reasonable to do so.

Disclosure of documents

Early disclosure of documents and relevant information can help to clarify or resolve any issues in dispute.

If the debtor requests a document or information, the creditor must –

(a) provide the document or information; or

(b) explain why the document or information is unavailable within 30 days of receipt of the request.

Trying to settle and resolve disputes

The court expects both parties to try and deal with any disagreements before court proceedings. This means that if the debtor disagrees with having to pay the money being claimed, they should try to discuss this with the creditor and consider using alternative dispute resolution (ADR) which might enable the parties to settle the dispute without commencing proceedings. Litigation should be a last resort.

Court proceedings

If the creditor makes a court claim, the court will expect both the creditor and the debtor to follow the protocol. The court will look at whether the main points have been met.

  • If the creditor does not follow the protocol and eventually wins the court case, the court may reduce the amount of interest added to the debt and the creditor may incur all of the court costs.
  • If the debtor does not follow the protocol, the court may decide that they have to pay all of the court costs and pay any interest outlined on top of the debt.

If you would like assistance with recovering a debt and complying with the Pre-Action Protocol, you can contact us by email or telephone: / 0808 145 1886