Debt Claims – A New Regime

Thursday 29th June 2017

The 1 October 2017 will see the ‘Pre-Action Protocol for Debt Claims’ come in to force.


The protocol requires businesses (which includes public bodies) to follow a procedure prior to making a court claim to recover a debt from an individual.  Whilst one motive behind the protocol is to protect individual consumers, the protocol also covers debt due from sole traders.  So this will not only impact upon B2C suppliers but also B2B.


Other motives?

  • Encourage creditors and debtors to communicate fully prior to legal action;
  • provide debtors with the opportunity to pay their debt over time, as opposed to facing legal action and court judgments;
  • encourage creditors to work with debtors rather than incur additional costs which would be passed on to the debtor;
  • reduce the number of debt claims before the courts.


From the creditor’s perspective, especially those supplying sole trader businesses, this will be a disappointing development.  The protocol requires a 30 day period between the letter of claim and issuing proceedings, which could be stretched for a further 30 days depending on how the debtor responds.  We could be looking at a 60 day period between sending a letter of claim and being able to make the claim.  At the moment this can be as little as 7 days.  This is a concern, especially when a sole trader operating a business should be able to satisfy their debts as they fall due.  The protocol will also provide unscrupulous individuals with the opportunity to dissipate their assets prior to the creditor being able to make a claim.  On the upside, debtors will be encouraged by the protocol to admit debts at an earlier stage, and also try to come to terms on payment.

It’s inevitable that the protocol will slow down the recovery process for those businesses which deal with individual customers and sole traders.  As a result, they should be looking at their internal credit control procedures now to see if they can mitigate the delays that the protocol will cause.

Please see our Pre-Action Protocol for Debt Claims for further information.


Graeme Davy is a Commercial and Property Litigation Partner, and heads up the firm’s Debt Recovery Unit. Graeme can be contacted on 01274 703 918 / 07788 367 240 or via email at