The Pre-action Protocol for debt claims (“the Protocol”) comes into force on 1 October 2017 and may well have a severe impact on a business if it has outstanding debts due from individuals.
The Protocol will apply to any business (Limited/PLC, partnerships/LLP’s, sole traders and public bodies) when claiming payment of a debt from an individual (this includes a sole trader). The Protocol does not apply if the matter is covered by another pre-action protocol such as the protocol for mortgage arrears.
The Protocol does not apply to business-to-business debts (unless the debtor is a sole trader) and the Protocol sets out the conduct the court will normally expect of parties prior to Court proceedings being commenced.
The aims of the Protocol are to:
(a) encourage early engagement and communication between the parties, including early exchange of sufficient information about the matter to help clarify whether there are any issues in dispute
(b) enable the parties…