The new rules for debt recovery

The introduction of the Protocol is a timely reminder that debt recovery should not just be an administrative exercise. If it is not undertaken correctly, this could have serious consequences later down the line.

Beth Wheatley | Associate

At Primas, we pride ourselves on our ability to offer a quality bespoke and results driven approach to our clients’ debt recovery requirements.

A debt claim will usually start with correspondence from the creditor to the debtor and now new rules have come into force via the ‘Pre-Action Protocol for Debt Claims’  which outlines steps a creditor should take before commencing Court proceedings.

Who does it apply to?

The Protocol will only apply to any business claiming payment of a debt from an individual. Many commercial entities could be forgiven for assuming that the Protocol does not apply to the recovery of business to business debt. However, the Protocol makes clear it will apply to individuals who are acting in the course of business – i.e. sole traders.

Further, as is becoming more and more common (and is encouraged), many of our clients will be protecting their interests in commercial agreements with personal guarantees, and the Protocol should be adhered to when pursuing those who have provided such guarantees.

Key Requirements

The Protocol outlines the information that should be included in a letter of claim, including the amount of the debt, interest, and information on any contractual agreement.

Additionally, a reply form and financial statement must now be sent with the letter of claim which should be completed and returned by the debtor. Somewhat unhelpfully, the Protocol does not provide such a form, but at Primas, we have created a detailed and compliant document to accompany all our letters of claim.

The debtor is then allowed 30 days to reply to the letter of claim before any Court action can be taken. Previously, there was no set timescale, but the Court would require parties to act within reasonable deadlines. If the reply form is completed and the debtor has requested additional documents these should be sent within 30 days from the date of the request.

Where the Protocol has been followed, the matter has not been resolved and it appears that proceedings cannot be avoided, a further letter should be sent to the debtor giving 14 days’ notice of intention to start court proceedings.

Failure to comply

The Court is entitled to take into account compliance/non-compliance with the Protocol when giving directions and making orders in relation to costs. For example, a Court could order a creditor who has succeeded in obtaining judgment in relation to debt, to pay the debtor’s legal costs in circumstances where the creditor did not follow the Protocol.

Although the Protocol has only just come into force and it remains to be seen how the Courts will penalise non-compliance (particularly in Small Claims matters where recovery of costs is limited), our advice would be to ensure that the Protocol is followed wherever possible.


Whilst the Protocol does not create insurmountable hurdles for creditors, the additional requirements could pose somewhat of an inconvenience for them and cause problems if it is not complied with and the matter ends up at Court.

Primas will advise clients on their claim from inception to completion whilst ensuring compliance with Protocol. Whilst many law firms and debt recovery companies offer a ‘one-size fits all’ approach to debt recovery matters, the service we offer is tailored to the individual client’s needs, whilst remaining cost-effective and results focused.

If you would like to discuss your debt recovery requirements, or if you have any queries on the Protocol please contact one of the team at in the Commercial Department at Primas on 01925 430 404.

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