Credit Management magazine May2017

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LEGAL MATTERS THE PRE-ACTION PROTOCOL FOR DEBT CLAIMS After years of consultation, the Pre-Action Protocol (PAP) for Debt Claims will finally come into force on 1 October 2017. DD +44 (0)113 261 6124 E jeffersen.gledhill@dwf.law W www.dwf.law/recover Jeffersen Gledhill INTENDED to apply to any business (including sole traders and public bodies) claiming payment of a debt from individuals (including sole traders) the PAP describes the conduct that a Court will normally expect parties to take prior to commencing proceedings. PRE-ACTION PAPERWORK As a minimum creditors will need to send: 1. A Letter of Claim, including specific details of the ‘basis of claim’ 2. An up-to-date Statement of Account, including interest, administrative and other charges 3. The Information Sheet, which includes ‘signposting’ 4. The Reply Form, see below on Pre-Action Process for further details 5. A Financial Statement Form, such as the Standard Financial Statement (SFS). All-in-all, the correspondence and standard form enclosures will run to a minimum of 12 sides of A4. While previous provisions for a copy of the PAP and any written contract to be included have now been discarded, the Letter of Claim will need to confirm that a copy of the written agreement can be requested from the creditor, which will create delay. PRE-ACTION PROCESS A debtor will have 30 days to respond to the Letter of Claim (though creditors should account for 'the possibility that a reply was posted towards the end of [that] period'). Using the Reply Form, they can pay in full or reply to state whether they owe the debt, if they need time to pay, whether they intend to get debt advice, and if they need more documents or information. Whatever the reply (even if only partially completed), creditors must attempt to engage with a debtor. An indication that they require time to pay should be met by a creditor trying to agree affordable sums for repayment, paying regard for the SFS. Should they seek extra time to obtain advice then the creditor must consider whether it would be reasonable to allow for that, in the circumstances. Finally, if a request for further documentation is made then the creditor must respond to that request, providing the documentation (or otherwise explaining why it will not be provided), within 30 days. In the event of dispute, Alternative Dispute Resolution should be considered. If this fails, a further 14 days' notice should be given of a creditor's intention to start court proceedings. PRE-ACTION PENALTIES Compliance with the PAP will be considered when the court gives any directions and when making orders for costs. So far as creditors are concerned, where the court decides that there has been a failure of compliance it may order that proceedings are ‘stayed’ (which is to say put on hold) or sanctions are applied. Sanctions may include an order: ‣To pay the costs of the proceedings, possibly on an ‘indemnity basis’ (which will usually result in more costs being recovered than on the ‘standard basis’) ‣To deprive interest entirely, or award it a lower rate than sought. PRE-ACTION PROPORTIONALITY? We note that the PAP: Applies to public bodies, who are not necessarily operating in business context, yet seeks to protect individuals who are operating in that context, such as sole traders Aims to encourage early engagement and communication between the parties. However, it is questionable whether this will be achieved, when the latest civil justice statistics demonstrate that a consistently high percentage of claims result in Judgments ‘in default’ (86 percent), indicating that the defendant has failed to even acknowledge service in response to a Claim Form Aims to avoid court proceedings, including by agreeing a reasonable repayment plan. However, the same statistics demonstrate that only nine percent of Judgments are entered ‘on admission’ Aims to encourage parties to act in a reasonable and proportionate manner (avoiding running up costs), yet will place a significant burden on creditors in terms of time and expense, at a time when they are not getting paid. Nevertheless, now is the time to raise corporate awareness of this significant change for debt claims and prepare for 1 October, 2017. Jeffersen Gledhill is Legal Recoveries and Operations Manager at leading law firm DWF. This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information. AS A CICM MEMBER YOU CAN RECEIVE FREE LEGAL ADVICE FROM DWF VISIT THE CICM WEBSITE AND CLICK ON THE FREE ADVICE LINE. 24 May 2017 www.cicm.com The recognised standard
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Page 1 and 2: CREDIT MANAGEMENT CM MAY 2017 £10.
Page 3 and 4: CONTENTS MAY 2017 www.cicm.com REGU
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Page 7 and 8: CICM WINS APPROVAL IN NEW APPRENTIC
Page 9 and 10: NEWS CREDIT WEEK PROMOTES IMPORTANC
Page 11 and 12: NEWS EXTRA Dominic Saville, Group C
Page 13 and 14: Notall credit collection systems ar
Page 15 and 16: THE B2B DEBT RECOVERY SPECIALISTS T
Page 17 and 18: WEIGHING UP THE ACCREDITATION WEIGH
Page 19 and 20: OPINION DESPITE much speculation, n
Page 21 and 22: INTERVIEW EXERCISING MINDS Sean Fea
Page 23: "We want to do more of what we’re
Page 27 and 28: TRADE TALK EXPORT OPTIMISM Lesley B
Page 29 and 30: MOTHER’S RUIN BRITISH booze is br
Page 31 and 32: DO YOU KNOW THE TRUE IDENTITYOF YOU
Page 33 and 34: OUT OF CONTROL? The advice sector i
Page 35 and 36: TECHNICAL BRIEFING GAME CHANGER STE
Page 37 and 38: SHERIFF’S ROLE? The Sheriff has f
Page 39 and 40: e 0South 1West 2 3 4 59.3 6 7-2.6 8
Page 41 and 42: SECTOR REVIEW - FITNESS AND SPORTS
Page 43 and 44: THE PERFECT VENUE FOR THIS YEAR’S
Page 45 and 46: CICM EDUCATION CONFERENCE 2017 22 J
Page 47 and 48: Discover what apprentices are sayin
Page 49 and 50: OPINION CELEBRATING CREDIT PROFESSI
Page 51 and 52: EXAM RESULTS Congratulations Congra
Page 53 and 54: PARTNERS TO TALK TO YOU... Safe’s
Page 55 and 56: BRANCH NEWS 60SECONDS WITH NORTH EA
Page 57 and 58: ACCOUNTS RECEIVABLE ADMINISTRATOR G
Page 59 and 60: Cr£ditWho? CICM Directory of Servi
Page 61 and 62: Cr£ditWho? CICM Directory of Servi
Page 63 and 64: MONTHLY PRIZE CROSSWORD CREDIT CONU

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