Debt Claims: How Will New Rules Affect You?

by | Oct 10, 2019 | Bad Debt, Debt Claim, Debt Collection, Debt Management, Late Payment, Lawyers, Litigation | 0 comments

Businesses typically may not be prepared for litigation or debt recovery, but new rules governing how debt claims can proceed against individuals may make a big difference to them, and to the resources they will need to make a claim in the first place.

The new Pre-Action Protocol for Debt Claims came into effect on 1 October 2017 and means changes for businesses wishing to make claims against individuals such as consumers.


The stated aims of the new protocol are to:

  • encourage earlier and clearer communication between parties in dispute, acting responsibly and proportionately
  • where possible, settle disputes out of court

It will also, in theory, encourage more efficiency in the management of unavoidable proceedings.

The protocol sets the rules for claimants where they must submit a Letter of Claim to the debtor. This new procedure will supersede the Letter Before Action and is markedly different in what it demands of the claimant.

Notably, it requires far more detail from the claimant at an earlier stage, including comprehensive supporting documentation and a detailed reply form for the claimant to send to the debtor, who must then complete it within 30 days of receipt.

All this is set out in clear stages for the claimant to follow.

There is, however, a sense that the protocol is shifting the burden away from the legal process onto the claimant. Certainly, there is scope for claimants to have to invest more time and resources – including money – in preparing their claim before submitting it.


If the introduction of the protocol is partly in response to the large number of cases coming to court, and those that fail because of lack of submitted documentation, it may in fact deter claimants but without delivering its desired efficiencies and improvements.

It has the potential to increase the number of documents in circulation, as it requires that the debtor complete the extensive paperwork of the reply form before the claim can proceed.

Is the protocol then a heavy-handed solution to a problem, the proverbial sledgehammer to crack the nut, which does more damage in the pursuit of its objective?

The result may well be that less business-consumer disputes go to court, but not for the right reasons.

While we advise spotting bad debt in advance, if you have any late payment issues, please do not hesitate to contact us, in the strictest confidence.

Photo: Courtesy of InvestmentZen

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