New Pre-Action Protocol for Debt Recovery – are you compliant?
29 September 2017
A new Pre-Action Protocol comes in to force on 1st October 2017, laying down new guidance for how businesses deal with Debt Recovery matters.
This Protocol has been in existence since the early part of 2017, giving the business community around 6 months to get their systems ready to go live in October.
The new rules are designed to encourage early communication and settlement, promote the consideration of payment plans as a sensible option, and work to avoid costly court action where possible.
The rules apply to debts owed to a business by an individual. The definition of a business includes those set up as limited companies, partnerships, sole traders and public bodies. The debtor must be an individual or sole trader, as these rules do not apply to business-to-business debts.
Do you have unpaid invoices? Are you responsible for credit control processes? How do you deal with late or non-payers? Are you ready for the changes that came in on 1st October?
At Curtis Law we are often instructed by businesses looking to recover unpaid invoices and debt. This can range from a one-off unpaid bill of a few hundred pounds, right the way up to unpaid invoices running over months and totalling many thousands.
We have been aware of the changes coming in and have updated our processes accordingly. The Protocol sets out a number of formalities which must be complied with, including specific details to be included in the formal Letter of Claim and supplemental documents which must be provided to the debtor. Failure to comply with the Protocol can lead to delays in the debt recovery process, costs sanctions at court or a restriction to the interest that can be recovered.
As with everyone in business, we all hope that it will not prove necessary to pursue a customer or supplier for unpaid invoices. However, it is the experience of our experts at Curtis Law that these situations do arise all too often and in all sectors of the business community.
Iain Blundell, Solicitor leading our Debt Recovery department, advises: “I have been instructed in debt recovery matters for many years and can honestly say that invoices can go unpaid in all types of business. I have, unfortunately, had instructions to recover unpaid debts relating to funeral costs, wedding receptions and all sorts of other businesses that you would not usually associate with litigated or disputed matters”.
“It is more important than ever that businesses get it right when pursuing a debtor. If you have any doubts about your procedures, or wish to instruct a Solicitor to recover a debt on your behalf, please give us a call.”
Our Debt Recovery Team are happy to assist whatever size your business and however the debt has arisen. Please call 01254 297130.