From next month, any business seeking to recover a debt from an individual by way of court proceedings will be required to comply with the new Pre-Action Protocol for Debt Claims, with this due to come into force on 1st October 2017.
The new protocol, which is designed to encourage early communication between parties and enable the matter to be resolved without the need for court proceedings, requires businesses to send a Letter of Claim to a debtor stating certain information about the debt, together with further documents providing the debtor with information about what they should do next and how they should reply to the Letter of Claim. The protocol also obliges businesses to allow 30 days from sending the Letter of Claim before commencing court proceedings, or if a debtor replies to the Letter of Claim then the business must allow a further 30 days from receiving the debtor’s reply before it can start proceedings.
In respect of any relevant court proceedings which are commenced from 1st October 2017, the court will expect the parties to such to have complied with the pre-action protocol and they will duly take any non-compliance into account when giving directions for the management of the proceedings.
Debts of service charges, where these are typically payable by a leaseholder to a freeholder, residents management company or a right to manage company, will be subject to the protocol (except where the leaseholder is a business), and any party which is intending to bring court proceedings to recover service charges will therefore need to ensure that it complies with the pre-action protocol beforehand.
At Leasehold Debt Recovery, our debt recovery procedures are designed to ensure compliance with the pre-action protocol whilst ensuring that outstanding service charges are recovered as early as possible, and if you would like to find out more about our procedures or the new protocol then do not hesitate to contact us on 0113 871 5851 or info@leaseholddebt.co.uk.
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