Pre-Court Action Protocol for Debt Claims
The Pre-Action Protocol for Debt Claims is a set of guidelines that creditors must follow before commencing legal proceedings against a debtor in England and Wales. It came into effect on 1 October 2017 and aims to encourage communication between creditors and debtors to resolve matters without resorting to court action.
Here’s an overview of the protocol:
Early Engagement and Communication
The protocol encourages early engagement and communication between the parties. This can include the creditor writing a formal Letter of Claim to the debtor, outlining the details of the debt, including the amount, any interest or charges, the agreement under which the debt arises, and whether assignments have occurred.
Information to be Provided by the Creditor
The creditor must provide clear and detailed information about the debt and the agreement to the debtor, along with an up-to-date statement of account. They must also provide a copy of the Information Sheet and Reply Form enclosed in Annex 1 of the protocol.
Responding to the Letter of Claim
The debtor is given 30 days to respond to the Letter of Claim using the Reply Form. If they don’t respond within 30 days, the creditor may start court proceedings (subject to any remaining obligations the creditor may have to the debtor).
Attempts to Resolve the Issue
If the debtor indicates that they are seeking debt advice, the creditor must allow reasonable extra time for the debtor to obtain advice. If the debtor proposes a repayment plan, the creditor must respond in writing within 30 days, stating whether they accept the proposal, or why they reject it.
Disclosures
Before starting legal proceedings, the creditor should provide any documents or information requested by the debtor or give reasons why the documents or information are unavailable within 30 days of the request.
Compliance
If a dispute can’t be resolved without court action, compliance with this protocol will be taken into account by the court. Non-compliance could result in cost sanctions.
At First Capitol, we fully adhere to the Pre-Action Protocol for Debt Claims. We believe in the importance of clear communication and aim to resolve debts amicably and efficiently wherever possible, minimising the need for court action. Our commitment to this protocol reflects our dedication to fair, ethical, and professional debt recovery practices.
