Are you ready for 1st October 2017? It has been a long time coming but the new debt recovery protocol (“the Protocol”) comes into force in a little under one week and may significantly increase the time it takes you to recover outstanding debts due from individuals. The Protocol does not apply to business-to-business debts (unless the debtor is a sole trader) and sets out the conduct that the courts will expect of parties to a debt claim prior to the commencement of court proceedings. Importantly, a Creditor may face sanctions, including staying proceedings to remedy failures and further limitations on costs and interest recovery, if the Protocol and the timescales contained within are overlooked and/or ignored.
Whilst aiming to encourage early engagement by the parties and reduce the number and cost of cases going before the courts, with an increased emphasis on alternative dispute resolution procedures, the Protocol is seen by many as ‘bad news’ for Creditors. Why? With constraints on when a Creditor can commence proceedings and specific documentation required to be sent to Debtors, the Protocol will , undoubtedly, increase the time between a debt becoming ‘due’ and the commencement of proceedings where a Debtor indicates an intention to dispute or requires documentary evidence in support. Moving forward, Creditors will need to be more proactive in how they engage with their individual Debtors (and their own advisors) in order to meet the new deadlines, which may in turn impact credit control procedures and potentially whom, as a business, they are prepared to agree credit terms.
If you require any further information about the Protocol, your credit control processes, or you require any assistance with collection of your debts, please contact our Debt Recovery Manager, Mr Matthew Perry T: 0113 380 4890.
Posted 11:41 AM | Permalink