The changes all revolve around increasing the amount of information shared between parties, to a sufficient enough level that the parties can understand each other’s position and come to an agreement without court involvement.
You are now additionally required to include in the letter:
• up to date financial information including details of any interest and administrative charges added;
• payment details including the method of
• an enclosed Reply Form, Information Sheet and Financial Statement Form, all of which have been provided for use in the protocol itself;
• a reply address where the debtor is directed to send the Reply Form.
The letter should be clearly dated and posted within a day of the date stated, and it must be sent by post unless the debtor has explicitly requested it be sent by an alternative method.
As you will notice, the whole procedure has been overhauled in order to nurture communication between parties with the aim of avoiding court action being taken.
This means creditors may have to wait up to 60 days to file a claim, alongside having to do a great deal more administrative work in preparation.
The court will take into consideration any non-compliance and may penalise a party that doesn’t substantially follow the protocol. For example, a successful creditor might not be awarded part or even all its costs. However, in relation to other protocols, the court has usually looked at whether a failure to follow the protocol made any real difference and doesn’t usually like parties playing games with the protocol procedure.
If you are planning on taking your debtor to court, it is recommended that you send out the first Pre-Action letter as soon as the debt becomes due.