This brief article answers the five key questions regarding the new pre-action protocol for debt claims.
Q1) What is it?
A) The new procedure to follow prior to issuing a debt claim against an individual or sole trader.
Q2) When do we have to start using it?
A) From 1 October 2017
Q3) Do we have to use it for every debt that we wish to pursue?
A) No. You only have to use it if you are a business and are pursuing an individual debtor, including a sole trader. There are also some sector specific exemptions and any regulatory obligations should also take precedence.
Q4) What do we have to do in order to comply?
A) The first step is to send the debtor a letter before claim, statement of account and response pack — giving the debtor 30 days to respond. The next step depends on what response, if any, you receive from the debtor.
Q5) What will happen if we don’t comply?
A) The court could penalise you in costs or deny the interest you have claimed.
How Birketts can help you
We recognise that debt recovery is essential to ensure the cash flow and therefore the continuance, of your business. This is why we have a dedicated and experienced team, ready to help with the recovery of unpaid debts, enabling you to focus your time on what you do best.
Our team can:
- prepare the letter before claim and the response pack
- handle any subsequent court claim
- provide your team with the training and resources they need in order to comply with the new protocol.
If you would like to discuss the ways in which our team can assist your business to recover its debts, please contact a member of our Commercial Litigation Team.
The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at September 2017.