Recovering your debts: Things are about to change

Debt recovery is the process whereby a creditor (usually a business or sole trader) attempts to recover any outstanding debt due. The most effective way to do this has traditionally been to send a 7-day ‘Letter Before Action’ claim, demanding imminent payment, failing which proceedings will be issued in the County Court. This has been the process in existence since debt recovery began and there has been little or no change ever since.

However, things are about to change…
In September 2014, a draft proposal was released that would impact the entire debt recovery system, putting in place a new Pre-Action Protocol to come into effect in October 2017.

The new protocol means it will be more cumbersome for creditors to recover debts. A more detailed letter before claim will now need to be sent to the debtor annexed with a statement of account, reply form and financial statement. There can be severe cost implications if the initial stages of recovery are not dealt with properly. If you fail to follow the Pre-Action Protocol with extreme care, then there could be severe costs or sanctions. This in turn could mean that you would not be able to recover all the debt owed, that you may be ordered to pay the Debtor’s legal costs, and you could also potentially lose the ability to recover full interest.

Seeking clarity in claims

Although the new protocol may elongate the processes for debt recovery, it does provide some long-awaited clarity on the system and timings which need to be put into effect. We will only of course see the results of the same after October 2017, and at that point be able to effectively judge how well this new system works.

Historic debts

If you have written off old debts, provided your invoices are under six years old, it is not too late to recover them. The Sethi Partnership Solicitors can trace your debtors and recover what is owed to you. We would always recommend taking legal advice before you begin the debt recovery process to ensure that your Letter Before Claim meets the standard required by the new Pre-Action Protocol, with no cost implications.

For more information on on recovering your debts, you can get in contact with Sunita Minhas directly here.


If you need help with any Litigation Matters; please contact Cormac Cawley at The Sethi Partnership Solicitors.

Cormac CawleyCormac Cawley
T: 020 3974 1576

The Sethi Partnership Solicitors I The Barn House I 38 Meadow Way I Eastcote I Ruislip I Middlesex I HA4 8TB


“This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.”