Pre-Action Debt Protocol
Wednesday 10 January 2024
From 1st October 2017 the pre-action debt protocol was implemented in England and Wales. The protocol applies to all businesses claiming the payment of a debt from an individual (including a sole trader). The protocol does not apply to business-to-business debts (except sole traders).
The protocol sets out a number of requirements, including:
- form and required information in communications with the debtor
- payment arrangements which should be offered to the debtor
- time allowed for the debtor to reply
Whilst failure to comply with the protocol may result in the following:
- delays to the collection of the debt due to remedying compliance with the protocol
- additional cost sanctions due to payment of debtors legal costs or a failure to recover costs from the debtor
- the inability to recover interest from a debtor or recovery at a reduced rate.