Pre-Action Protocol
Applicable to debts owed by individuals or sole traders
Pre-Action Protocol for Debt Claims
In 2017, the Ministry of Justice introduced a pre-action protocol for debt claims specifying the type of information, documents and timescale for payment that should be given to your customers.
If you are seeking payment of a debt from an individual or sole trader, you will need to comply with the Pre-Action Protocol for Debt Claims.
This page provides you with all the information, including a video and a free downloadable template letter, to ensure you comply with the protocol.
On 4th May 2021, Breathing Space Regulations also came into force which may impact on the way you collect debts from individuals and sole traders. Click below to find out more information.
What is the aim of this protocol?
What are you required to put in your letter?
To ensure you send a compliant letter, you are required to include:
- up to date financial information including details of any interest and administrative charges added to the debt amount;
- details of the agreement under which the debt is payable. If the agreement was oral, you should say who made the agreement, what was agreed and where the agreement was made;
- confirmation that further information or a copy of any written agreement can be made available if your customer asks for it;
- the method and how payment can be made, and details on how to contact you if your customer wants to discuss payment options;
- a copy of the Reply Form, Information Sheet and Financial Statement Form. Templates are included in the protocol;
- an address to which your customer can return the Reply Form.
In addition to the above, your letter should be clearly dated and posted within a day of the date stated. The letter should be sent by post unless your customer has explicitly requested it be sent by an alternative method. Note you are not prevented from sending the letter by post and email.
What timescales are involved?
Letter
The protocol requires your customer to be given 30 days (plus time for postage) to reply or pay the debt before court proceedings can be issued.
Reply form completed
Under the protocol, you should not start proceedings within 30 days from receiving a completed reply form from your customer.
Document requested
If your customer requests copy documents or information, you must give a further 30 days from the date you provide them before issuing court proceedings. If you can’t provide them, you have to give a reason why within 30 days.
Customer getting advice
If in the customer’s response, they state that they are getting advice, you should give the customer at least 30 days before taking legal action. A longer period of time should be given if that would be reasonable.
Partial Reply Form
If you receive a partially completed Reply Form, you should contact the customer to find out further information i.e is there a dispute or do they need time to pay?
Agreement not reached
If you are unable to resolve the matter or reach an agreement, you will need to ensure you have given your customer a final 14 days’ notice before issuing court proceedings.
Issuing a claim
At any stage of the pre-action process, your customer must be given least 14 days written warning that legal proceedings may be issued. An exception to this is if the debt is due to be statute barred.
