By Nicola Grant
Litigation Executive (GCILex)

Any business (including sole traders and public bodies) claiming payment of a debt from an individual (including a sole trader) must comply with the Pre-Action Protocol for Debt Claims which came into force on 1 October 2017.  Courts will not look favourably upon businesses who fail to comply with the protocol and may penalise them during the course of subsequent court proceedings, potentially in the form of cost sanctions.

The aim of the protocol is to encourage early communication between the parties to a debt claim with a view to enabling them to resolve disputes without court proceedings.  The protocol effectively extends the time before creditors are able to issue proceedings against debtors, which in practical terms means that it will now take longer for businesses to recover debts from individuals than it did prior to October 2017.

A creditor must send a letter of claim to the debtor containing detailed information about the debt, including details of any agreement out of which the debt has arisen, a statement of account and details of how the debt can be paid.  Certain documentation must be enclosed with the letter of claim.

The debtor has 30 days from the date of the letter to respond to the letter of claim, after which the creditor may start court proceedings (provided that it has given 14 days’ notice to the debtor of its intention to do so).

Chubb Bulleid have a great deal of experience in acting for clients in successfully recovering debts from individuals and other businesses and will be happy to deal with this on your behalf, thus ensuring compliance with the protocol (where it applies).  Please contact us to discuss further and request a quote.