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June 13, 2023

The pre-action protocol applies to a business, including a sole trader or public body (a “creditor”) that seeks to claim recovery of a debt from an individual (including a sole trader) such as an unpaid invoice or loan.  The Debt Protocol only applies where another specific pre-action protocol does not apply (for example, mortgage arrears) and does not apply to business-to-business debts.  

The Protocol sets out the procedure that the Court will expect parties to follow before starting proceedings.

The purpose of the Pre-Action Protocol

The purpose of the protocol is to:

  • Promote early communication, allow for information to be exchanged and to identify the issues in dispute,
  • Give parties an opportunity to resolve the dispute in a cost-effective way and without the need for court proceedings (i.e. by agreement of a payment plan or considering alternative dispute resolution),
  • Encourage the parties to act reasonably and in a proportionate manner, support the efficient management of proceeds; and
  • Reduce the costs of resolving the dispute.

The Debt Recovery Pre-Action Procedure

Prior to starting proceedings, the creditor must issue a Letter of Claim to the debtor and must give the debtor 30 days to respond.

The letter should include:

  • The amount of the debt.
  • Whether interest or other charges are accruing.
  • Where the debt arises from an oral agreement:
    • Who made the agreement;
    • What had been agreed; and
    • When and where the agreement was made.
  • Where the debt arises from a written agreement:
    • The date of the agreement;
    • The parties to the agreement;
    • That a copy of the agreement can be requested from the creditor.

A copy of any written agreement should be included with the letter.

  • Where the debt as been assigned, the details of the original debt and creditor, when it was assigned and to whom it was assigned.
  • If regular instalments are being offered or are being paid, confirmation as to why these payments are not acceptable to the creditor and reasoning as to why a court claim is being considered.
  • Details of how the debt can be paid.
  • Details of how to proceed if the debtor would like to discuss payment options.
  • The address to which the completed reply formmust be sent.          
  • An up-to-date statement of account including any interest and charges. 

The Letter of Claim should also enclose an information sheet and a reply form.

If the debtor has not responded within 30 days after the Letter of Claim has been issued, the creditor can then issue proceedings.

If the debtor responds:

  • The creditor must give the debtor a “reasonable period” to obtain advice;
  • Where it is taking the debtor longer than 30 days to seek advice, the creditor must give the debtor additional “reasonable time”;
  • If the debtor has requested any documents, the creditor must provide these within 30 days or must explain why such documents are unavailable;
  • If the debtor requires time to pay the debt, the parties much reach a repayment agreement based on the debtor’s financial circumstances, and if the creditor does not agree, their reasoning must be confirmed in writing;
  • If the debtor has only partially responded, the creditor must take steps to contact the debtor and obtain further information of their position;
  • If the debtor disputes the debt (or any aspect of it) both parties should try to reach an agreement and should consider alternative dispute resolution.

If an agreement has not been reached, the creditor must give 14 days’ notice before issuing proceedings (expect in exceptional circumstances (for example if the limitation period is likely to expire)).

If an agreement has been reached the matter will be concluded. 

Failing to reach an agreement

If parties fail to reach an agreement and the dispute proceeds to litigation, the Court will have expected the parties to have complied with the protocol.   

The Court may also take into consideration non-compliance when giving directions for the management of proceedings and when making orders for costs. The conduct of both parties will be considered by the Court.  

Failure of compliance may include when a party has:

  1. not provided sufficient information to enable the objectives of the protocol to be met;
  2. not acted within a reasonable time period or the time period prescribed by the relevant protocol; or
  3. acted unreasonably, refused to use a form of alternative dispute resolution, or failed to respond to an invitation to do so. 

The Court may issue sanctions such as fines to parties that fail to comply with the protocol.

If you are a business seeking to claim recovery of a debt from an individual and would like to discuss this further, please contact us at 0121 705 7571 or email us at

Do not risk non-compliance and potential sanctions from the Court – act now to resolve your dispute in a cost-effective way.

Shola Parry
Paralegal – Wills and Probate Department

This article is for general information purposes only. It does not constitute technical, financial, legal advice or any other type of professional advice and is no substitute for specific advice based on your individual circumstances. We do not accept responsibility or liability for any actions taken based on the information in this article. For more information, please click here.