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Debt Recovery Series No.3 – Pre-Action Protocol Compliant Letter Before Action

Published on 3 January 2018 | Modified on 15 May 2023

Written by Stacey Bennett

This is the continuation of the debt recovery mini series. Please see previous article here.

Once you have exhausted your own internal credit control procedures and there is a requirement to instruct Solicitors to assist you in recovering the debt, the first thing that we will do, once we have reviewed your papers and advised you as to any issues or concerns that we may have arising from the information you provide, will be to send a pre-action protocol compliant letter of claim.

From the 1st October 2017, there has been a requirement under the Court guidelines (the Civil Procedure Rules) to send a letter before action complying with the relevant pre-action protocol. The guidelines provide various pre-action protocols which relate to specific matters. The most recent one is for debt recovery.

  1. Aims of the protocol

The aims of the protocol are to encourage early engagement and communication between the parties with a view to resolving the debt without the need to enter into Court action. The Court rules generally place an emphasis upon any litigation being proportionate to the level of the debt and the guidelines place the emphasis upon this pre-action protocol also.

  1. Content of the letter

The letter should contain sufficient information about the debt to enable the other side to know the case that they have to answer. It will include the capital and any interest that is being added on to the debt. A copy of any agreement (or, if an agreement was made orally, then specific details as to the creation of that agreement) will need to be included within the letter.

As you would expect, the letter also needs to enclose details of how the debt can be paid as well as confirmation as to when the payment should be made by. The pre-action protocol does state that the debtor should have 30 days from the date of your letter to respond to the letter before you can commence legal proceedings. This does, in my opinion, add an extra layer of timescale into the debt recovery proceedings which may, arguably, not be strictly necessary.

There is now a standard reply form and a financial statement form as part of the protocol which will need to be sent with the letter before action to enable the debtor to respond.

  1. Court action?

If the debtor fails to respond to the correspondence within the 30 days, then you are perfectly entitled to commence Court proceedings at that point.

However, the protocol does place an emphasis upon seeking alternative dispute resolution with a view to resolving the matter. If the parties can reach settlement in advance of issuing proceedings then that will be best for all concerned but, sometimes, settlement proposals that the debtor is able to offer are simply not acceptable to you. In circumstances such as this, then you are in a position to commence proceedings should you wish.

  1. Do I have to comply with the protocol?

It is always advisable to comply with Court guidelines. If the matter were to proceed further through to litigation then obviously, we may be needing to look to compliance with the pre-action protocol with a view to recovering your legal costs. If you do not comply with the pre-action protocol then the Court will look at this in respect of not only costs but also the management of proceedings going forwards (i.e. in relation to what documents may still need to be disclosed for example).

As such, if costs are not going to be an issue because of the level of the debt, you may feel that you do not need to comply with the pre-action protocol. It would be my strong advice that this is a risky position to take and a pre-action protocol compliant letter should be sent in all debt recovery proceedings.

Should you require any assistance in relation to debt recovery then please do not hesitate to contact Sarah-Jane Dunhill, Head of the Litigation Team for further advice and assistance on 01260 275337 or by email


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