Pre-Action Protocol for Debt Claims

As litigants and advisors involved in the issuing and litigating of debt claims will hopefully be aware, the Pre-Action Protocol for Debt Claims (‘the Protocol’) comes into force on 1 October 2017.  This new Pre-Action Protocol is being introduced with the stated aims of:

a)      encouraging early engagement and communication between the parties, including exchanging information to clarify issues in dispute;

b)      settling claims without recourse to the Court, including setting repayment plans and alternative methods of resolving the dispute;

c)       encouraging parties to act in a reasonable and proportionate manner; and

d)      supporting efficient management of proceedings that cannot be avoided.[1]

Whilst these are all aims to be lauded and are entirely in accordance with the Overriding Objective to deal with cases justly and at proportionate cost, the Protocol is the result of some difficult negotiations between those who represent creditor companies issuing debt claims, representative groups advancing the position of debtors and the Court attempting to manage dwindling resources.

The Protocol will apply to “any business (including sole traders and public bodies) claiming payment of a debt from an individual (including a sole trader)”[2], but explicitly excludes business-to-business debts (except, it seems, in circumstances where both businesses are sole traders).  In short, this means that the Protocol will apply to the vast number of business-consumer claims and introduces a swathe of new requirements by way of pre-action correspondence and disclosure.

The Letter of Claim

The first stage of the Protocol requires the Creditor to send a much more detailed Letter of Claim than the Letter Before Action which the Practice Direction Pre-Action Conduct currently requires.[3] 

Attached to this Letter of Claim, the Creditor must now also attach a series of documents: a statement of account showing interest and administrative charges; an Information Sheet, Reply Form and Financial Statement form (all of which are annexed to the Protocol).[4]  The Letter of Claim, plus the documents attached thereto, increase the length of a Letter Before Action (often only one or two sides of A4) to approximately 10 pages. 

The Letter of Claim must be clearly dated and sent by post (not email, although it can also be sent by email if it is posted) the same day.  The clock then begins ticking and the Creditor must give the Debtor 30 days to reply before proceedings should be issued.

The Reply

One of the documents which the Creditor must attach to the Letter of Claim is a Reply Form and the Debtor is encouraged (although not mandated) to reply on this Form. 

Broken into four parts, the Reply firstly asks the Debtor to consider whether they accept the debt in full or in part, whether they do not know of or whether they dispute the debt.  This mirrors closely (although not exactly) the Admission/Defence forms sent with a Claim Form.

The second part considers how payment will be made and signposts towards the Financial Statement (which the Creditor must helpfully include) if time to pay is requested.  The third part enquires about debt advice and signposts towards the Information Sheet (which the Creditor must also include).

The final part deals with what documents are being supplied or requested.  The inclusion of the request at this stage is obviously an attempt to reduce the number of Defences filed which are simply a request for documents and rows back from the previous incarnation of the Protocol which required a copy of the agreement to be sent with the Letter of Claim.

The Debtor should send the completed Reply Form (and Financial Statement, if relevant) back to the Claimant within the 30 days.


As mentioned above, the previous iteration of the Protocol required the Claimant to send various documentation, notably a copy of the original agreement, with the Letter of Claim. This was removed as being disproportionate; however, the hangovers remain.  If documents are requested in the Reply Form they must be provided within 30 days, or an explanation given as to why they are unavailable.[5] 

This will no doubt become a point of contention between Creditors,  especially those assignees of debts who must go back to the original lender,  and Debtors who see that the Creditor’s failure to provide documentation as tantamount to an admission that the debt is not owed. 

All that the Protocol does in this regard is frontload the disclosure which would have to be provided following issue of the claim (and is often ordered by the Court at allocation/directions stage) to pre-issue, ignoring the vast number of cases which go undefended.


The Protocol,  despite its admirable aims, front-loads a significant proportion of costs onto creditors pre-issue.  In circumstances in which default judgment is entered in 86% of cases and admissions are filed in a further 9% (meaning only 5% of claims issued are challenged)[6], these cases would never have previously incurred the expense to which creditors will now be put.   

Whilst there is undoubtedly some need for pre-action disclosure, the sheer volume of documentation which the Protocol requires the Creditor to send to the Debtor at the very outset of the claim is likely to overwhelm many debtors who might otherwise have engaged with the process.  Whilst this is pared down from previous iterations of the Protocol, in excess of 10 pages (when a Claim Form is only 2) seems excessive and is likely to faze people.

As a practical point, the Protocol seems to be a technological step backwards.  In the days where Defendants can file their Defence at the County Court Business Centre online in a few clicks and we talk about an Online Court being the future within the next few years, to require the Debtor to complete a 4-page Reply Form in manuscript seems positively archaic. 

For creditors who face defended claims allocated to the small claims track where a debtor is still running either a ‘lack of documentation’ defence or a simple denial of knowledge, the Court may look more favourably on applications for unreasonable conduct costs for failing to comply with the Protocol; however this is far from certain and Protocol simply refers readers to the Practice Direction – Pre-Action Conduct and Protocols which is applied with a ‘light touch’ currently.  If the Protocol is applied with a similar ‘light touch’ in those cases where a litigant in person fails to reply, Judges are likely to be resistant to adding additional costs without express sanctions set out.[7] 

The Protocol therefore seems to be a heavy-handed attempt at dealing with a relatively small proportion of debt claims which are defended based on lack of documentation.  The increased cost to handling a large volume of these type of cases is likely to be a deterrent to creditors and the Protocol adds only more paperwork and more delay in a scheme which seems to thwart the Overriding Objective. 

[1] Paraphrased, Protocol para. 2.1

[2] Protocol, para. 1.1

[3] See Protocol, para. 3.1(a) for the full list

[4] cf. Protocol, para. 3.1(b) – (d)

[5] Protocol, para. 5.2

[6] Ministry of Justice ‘Civil Justice Statistics Quarterly Oct – Dec 2016, published 02/03/2017.  Available online: <>

[7] Especially given the (relatively) recent introduction of CPR 3.1A stating that the Court must “have regard to the fact that at least one party is unrepresented.”

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