Are you ready for 1 October 2017?

16th August 2017

Are you ready for 1 October 2017?

What’s going to happen on 1 October 2017?

On 1 October 2017 the new Pre-Action Protocol for Debt Claims (‘the Protocol’) comes in to force. The Protocol imposes certain requirements on creditors seeking to recover debts from individuals, (including sole traders) to provide information, documentation and to allow at least 30-days before issuing court claims.

The main changes

A typical Letter Before Action is currently one or two pages but this will need to increase to approximately 12 pages in length in order to comply with the Protocol requirements after 1 October

Instead of giving the debtor a usual seven days to pay the debt before issuing a court claim, the debtor will have at least 30 days to reply and before proceedings should be commenced (this time is extended if the debtor requests a document or replies to the letter of claim).

What is it?

Any creditor intending to issue Court claims in respect of recovering debts are already required to adhere to the Practice Direction for Pre-Action Conduct that is presently in place. The aim of this Practice Direction is to encourage early resolution of claims between the involved parties without the need to progress to a court claim. The new Protocol's stated aims are similar in nature but are specific to claims for debts.

Does it affect you?

The Protocol will apply to any business (public bodies and sole traders included) that seeks to claim payment of a debt from an individual (sole traders included).

Unless you are seeking to claim a debt pursuant to a guarantee given by an individual, the Protocol does not apply to purely business to business debts. If the debt is owed by an individual or sole trader then the Protocol is likely to apply.

How does it affect you?

The Protocol imposes several burdens on creditors in respect of information and documentation that should be in place before they can commence court proceedings

Letters of Claim (letters before action), being the first stage of the Protocol, will need to contain much more detail of the debt. These first stage letters will need to include certain information and documentation:

Minimum information to be included in the Letter of Claim

  • how the debt has occurred (if it was an oral agreement, who made the agreement, what was agreed and where?)
  • the amount of the debt
  • statement showing details of any interest and other charges being applied to the original debt amount and if these amounts are continuing
  • whether payment by instalments are being offered or being paid and an explanation of why they are not acceptable resulting in proposed court proceedings
  • information on how the debt can be paid
  • details on where to send a completed reply form
  • if the debt relates to a written agreement the letter must state that the debtor is entitled to request a copy of the agreement

Documents required

  • reply form (the suggest format in the Protocol is four pages)
  • information sheet; informing the debtor on what to do and where to obtain advice (two pages)
  • financial statement; for the debtor to provide details of their financial circumstances (four pages)

The Letter of Claim must be sent by post on the same day it is dated (the date must be clearly stated at the top of the first page) after which the debtor has 30 days to reply. The letter cannot be sent by email only (unless there is an existing explicit by the debtor that correspondence should not be sent by post). It can however be sent by email on the same day it is posted.

Additional disclosure of documents and time scales

The debtor will have 30 days (from the stated date of the letter) to request a document – you will have 30 days from the request date to provide the document or an explanation as to why it is not available. Proceedings should not be issued until 30 days after the requested document or explanation is provided.

If the debtor indicates that they intend to seek debt advice, a reasonable period must be allowed for this.

In the event the parties have engaged with one another but no resolution has been reached the debtor should be given at least 14 days notice of your intention to commence court proceedings.

Failure to comply

Failing to comply with the Protocol could lead to court imposed sanctions, particularly regarding the ability to recover legal costs, in the event proceedings are commenced.

How we can help

Our dedicated Debt Recovery team specialises in collecting unpaid invoices on behalf of businesses of all sizes. They are able to help your business prepare for the Protocol coming in to force on 1 October by ensuring you have the correct procedures and documentation in place or by simply recovering your debts for you.

To find out more about Higgs & Sons' Debt Collection services download our latest infomation sheet, or to contact a member of the team click here.


Download the full Protocol here



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Brierley Hill
West Midlands, DY5 1LX

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