News

Are there going to be new rules as to how you recover debt?

Fiona Patrick, Affiliate Member of the Chartered Institute of Legal Executives in Astle Paterson’s Litigation & Dispute Resolution Department discusses the proposed introduction of a Pre-Action Protocol for debt claims.

Fiona explained, “Pre-Action Protocols provides guidance as to the steps people are expected to follow before issuing claims at Court.

The Protocols seeks to assist parties to resolve matters without the need for Court proceedings to be issued, by encouraging early exchange of relevant documents and evidence and by encouraging people to act in a reasonable manner towards each other at all times (including not incurring disproportionate legal costs).

Failure to adhere to Pre-Action Protocols is not looked on favourably by Courts – and a Court may punish the non-compliant party by Ordering that they pay the costs of the other person.

The proposed new Pre-Action Protocol for debt claims is currently under consultation, but if approved will set out the steps a Court would expect a business to take in pursuing an individual for a debt.

It is thought that any Pre-Action Protocol for debt claims will require the business to send a detailed Letter of Claim to the debtor together with an information sheet and reply form.

After receipt of the Letter of Claim, the business will then need to give the debtor 30 days to reply to the letter of Claim – albeit the business will need to give the debtor more time to pay or respond, should the debtor indicate that they are seeking debt advice.

Only thereafter can the business issue Court Proceedings against the debtor.”

Fiona concluded, “The proposed Pre-Action Protocol for debt claims will mark a step-change for how businesses conduct their credit control and debt recovery – at the very least it will mean that the business will need to spend more time in providing the debtor with detailed information regarding the debt and to provide the individual with more time to pay or challenge the demand than that which the business may have previously given.”

At Astle Paterson, we have extensive experience in pursing business debts.  Should your business have a debt owed to you and you need assistance please contact Astle Paterson’s Dispute Resolution Department on 01283 531366 or by email at fpatrick@astlepaterson.co.uk.

Back to News

More News from Fiona

High Court revives a struck-out claim – Rules it is not an abuse of process

Fiona Patrick, Trainee Legal Executive in Astle Paterson’s Litigation and Dispute Resolution Department discusses a recent High Court case with ...

Read More
Connect with Astle Paterson

Connect

Book an Appointment
Book an appointment
Burton on Trent Uttoxeter
Astle Paterson Accreditations

Business & Commercial   •   Conveyancing   •   Family   •   Litigation   •   Wills, Inheritance Tax & Probate   •   Employment