Rule committee launches consultation on debt protocol after complaints from creditors


“Mediation may settle any dispute any dispute more quickly and cheaply”

The Civil Procedure Rule Committee (CPRC) has launched a consultation on a new pre-action protocol for debt claims, following complaints from creditors.

In a letter to consultee organisations yesterday, the committee said it was not “made aware” that there had been no consultation on the proposed protocol until June this year.

The CPRC said it did not, as a rule, carry out consultations but only “on a selective basis with key stakeholders” and on details of the drafting.

“Having seen letters from a number of organisations representing creditors, CPRC decided at their July meeting to consult on the debt protocol, but only on the content not the principle, and with organisations that represent both creditors and debtors.”

The committee said that creditors particularly objected to a requirement that details of the contract and full statements of account should be included in every letter of claim in every case, even though many were not defended.

Creditors also objected to allowing defendants at least 28 days to seek advice. The committee argued in the letter that “reductions in public funding mean waiting times for appointments for advice can be significant, and advice should help settle the case or to narrow the issues”.

The CPRC said a further complaint related to the requirement to consider ADR. “This is standard in all the protocols, and complaining to an ombudsman or attempting mediation may settle any dispute more quickly and cheaply than issuing proceedings.”

The committee said a core principle of the debt protocol was that debtors, or alleged debtors, should be provided with sufficient information to enable them to obtain advice on their position prior to the issue of claims.

“Many debt cases settle without proceedings. But a significant number do not, particularly where there are disputes about the identity of the parties, whether the claim is within the relevant limitation period, the terms of the contract, interest or charges imposed, and where the debt has been assigned by the creditor, often a number of times.”

The committee is consulting a wide range of organisations from the Advice Services Alliance and Age UK to the Law Centres Federation and the Law Society. However, it said responses were welcome from “anyone with an interest” in the subject. The deadline is 30 September 2014.


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