From 1st October 2017 all businesses claiming debts from individuals, including sole traders, will be required to comply with a Pre-Action Protocol.
The creditor will be required to send a letter of claim setting out certain details and enclosing an information sheet, reply form and financial statement for the debtor to complete. If the debtor does not reply to the letter of claim within 30 days of the date at the top of the letter, the creditor may start court proceedings (provided that it has given 14 days' notice to the debtor of its intention to do so).
The aims of the new Protocol include encouraging early engagement and communication between the parties and enabling the parties to resolve the matter without Court proceedings. The Court will expect the parties to have complied with the Protocol if the matter proceeds to litigation, and will consider any non-compliance when giving directions for case management.
The Protocol will not apply to business to business debts, unless the debtor is a sole trader.
If you would like more information contact Hilary Garnett on 01484 821554 or email hilary.garnett@ramsdens.co.uk.