The debt pre-action protocol has now been finalised, although it is yet to be formally published. Its drafting proved controversial and the finalised version is less onerous than previous drafts. Notably, the requirement for every letter of claim to enclose a copy of the credit agreement has been deleted, as this would have imposed a substantial burden on debt assignees and administrators.

The final version of the protocol will come into force on 1st October 2017, leaving creditors six months to adapt their systems.

The protocol applies to debts owed by individuals, including sole traders. It does not cover correspondence already covered by another protocol (e.g. mortgage arrears).

Wherever the protocol applies, the letter of claim should contain various items of information. For instance, the letter should state that a copy of the credit agreement can be requested from the creditor, clarify whether interest is continuing to accrue on the debt, give full details of any assignment, provide details of how to discuss payment options. In addition, the letter of claim must enclose certain documents: the most recent statement of account, an Information Sheet, a Reply Form and a Financial Statement form.

The creditor should not issue proceedings until 30 days have passed since the letter was sent. Further delays are likely to result if the debtor uses the Reply Form to request copies of relevant documents: the intention here is to allow for informal pre-action disclosure prior to the institution of proceedings. If a reduced repayment arrangement is agreed, the creditor should not issue proceedings while this arrangement is being adhered to. The detail of the protocol should be consulted for the time-frames applicable to various situations. Non-compliance with the protocol may have adverse costs consequences.

Finalised version here: Pre-Action-Protocol-for-Debt-Claims-coming-into-force-1-October-2017-.