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Pete Gardner
Pete Gardner
Associate - Defended Commercial Recoveries Manager
01295 204038

The Pre-Action Protocol for Debt Claims – 4 Months On

by Pete Gardner | Feb 15, 2018 |
money - notes and coins

Back in October 2017, the Pre-Action Protocol for Debt Claims (“PAP”) was launched to very little fanfare. PAP is part of the Civil Procedure Rules which govern how parties deal with litigation claims through the County Court and is the first time that strict rules have been put in place for pre-action conduct on a debt matter. I wrote an article about PAP at the time to explain the ins and outs of it. http://www.se-law.co.uk/legal-blog/pete-gardner-blog/2017/10/03/the-pre-action-protocol-for-debt-claims-has-arrived.

Remind me, what is PAP?

If you are a business chasing a customer, who is not a limited company or partnership, for overdue payments then PAP sets out specific rules that you must follow if you intend on taking any of your customers to Court for non-payment of the debt. You must send a detailed Letter before Claim to your customer including various information and attachments including the amount of the debt, details of the agreement that you are chasing them in relation to, an Information Sheet, Reply Form and Financial Statement. Once the letter and attachments have been sent, you must wait 30 days for your customer to respond. If there is no response, you can sue them. If they do respond then various time restraints come into play, depending on the nature of their response, meaning that the customer can string out this pre-legal stage to about 90 days if they wish.

How is it working in practice?

At this early stage, PAP seems to be working smoothly. My initial fears that nefarious debtors would use the PAP to delay matters for as long as humanly possible do not seem to be coming to fruition. All in all, things are the same. Some debtors respond and provide information as to why they cannot pay or why they dispute the debt whilst others ignore us. The main difference is that you have to wait a few weeks longer to sue the debtors who do ignore, or refuse to come to an agreement, which if you have cash flow issues is not particularly helpful.

There are a couple of areas of PAP which are unclear such as the correct procedure when you agree an instalment plan with a debtor who then defaults but my feelings on this are that as long as you comply with the ‘spirit’ of PAP in your subsequent correspondence then all should be well.

Can I ignore it?

At this stage, we still do not know how tough the Court will be with non-compliance having had no publicised cases hitting the Court on this subject. However, I would advise against ignoring it. If your claim proceeds to litigation, the Court will expect you to have complied with PAP. If you have not complied then you could end up with serious sanctions.

Moving forward

We are confident that the processes and procedures we put in place last October are fully compliant with PAP and providing effective recovery of outstanding debts. If you would like to discuss how Spratt Endicott can assist you, please feel free to contact me by email at pgardner@se-law.co.uk or phone my direct line on 01295 204038.

*Disclaimer: While everything has been done to ensure the accuracy of the contents of this article, it is a general guide only. It is not comprehensive and does not constitute legal advice. Specific legal advice should be sought in relation to the particular facts of a given situation.​

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