What is the Pre-Action Protocol for Debt Claims?

The Pre-Action Protocol for Debt Claims (PAP) is a specific set of rules that require certain steps to have been performed prior to legal proceedings being issued.

The PAP was introduced as unpaid debt is one of the most common reasons for litigation occurring. Therefore, it is not hard to imagine that if every claim was permitted to be heard without any requirement for parties to try and resolve matters between themselves and act reasonably, the Courts would be clogged with Creditors and Debtors running amok.

Who Does the Pre-Action Protocol Apply To?

Subject to certain exceptions, the PAP applies to any business, including sole traders and public bodies claiming payment of a debt from an individual, including a sole trader. It does not apply to business-to-business debts unless the Debtor is a sole trader. Even where the PAP does not specifically apply, the general pre-action rules contained with the Civil Procedure Rules apply and there may be other pre-action protocols that are relevant.

What Happens if I don’t Comply with the PAP?

The Court expects all parties to which PAP applies to comply with its provisions. Minor or technical infringements, especially when the matter is urgent, are unlikely to concern the Court. However, significant breaches may result in:

  • Further delays in you being able to collect the debt/s owed due to the Court suspending (staying) proceedings until elements of PAP are complied with
  • The Court ruling you are unable to recover interest
  • Cost sanctions. This involves the Court stating that you have to pay part or all of the Debtor’s legal costs.

PAP came into force in 2017, making it relatively new in terms of law. There is little case law concerning PAP; however, as the protocol is tested in the Courts, there may be further guidance concerning what is and is not expected to meet compliance.

What are the procedural steps when complying with PAP?

As the creditor, complying with PAP requires you to send a Letter of Claim before commencing proceedings. The letter should contain (amongst other things):

  • Whether the agreement was established orally or in writing, or a mixture
  • The debt amount
  • The date of the agreement
  • The parties to the agreement
  • The fact that a copy of the agreement can be requested from the creditor
  • Details of who the debt has been assigned to (if applicable)
  • If applicable, why the offer or current instalments being paid are not acceptable and the reasons why a Court claim is still being considered
  • Details of how the debt can be paid
  • If the Debtor wishes to discuss payment options, whom to contact
  • The address to which the completed Reply Form should be sent
  • An updated statement detailing the amount of the debt and any interest and/or administrative charges added
  • Copies of blank reply forms

Where Can I Get Help Writing a PAP-Compliant LBA?

Our years of experience in debt recovery has enabled us to create a fast, effective, user-friendly Debt-Claims portal where you can instruct us to send an LBA. Our portal will ask the required questions to provide us with the information to draft a compliant LBA – all for just £12.50 and with no commission or recovery fee charged.

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