The new Debt Protocol for Business to Consumer Debt Recovery

The new Debt Protocol for Business to Consumer Debt Recovery

Business owners will usually have some experience in claiming debt for unpaid invoices. If you’ve never been in that position, you’re truly lucky! If you have to take action to recover debt going forward, you should take note of the new Protocol that is in place from 1 October 2017.

It's called the Pre-action Protocol for Debt Claims and it describes the conduct that the court would expect of parties, prior to the start of proceedings. 

FSB Essential Members are reminded that they have access to debt recovery assistance for undisputed debts.

What's changed?

The new conduct rules apply to businesses and public bodies when claiming a debt from an individual or a sole trader. It does not affect business-to-business debts (unless the debtor is a sole trader). Businesses that regularly trade with consumers or sole traders should review and adapt their debt recovery procedures to comply with the new rules, as set out in the Protocol.


As stated it does not affect business-to-business debts (unless the debtor is a sole trader) or where the debt is governed by another pre-action protocol, for example in respect of construction disputes or mortgage arrears possession claims.

The process

You must issue a more detailed letter before claim with the following information:

  • The amount of the debt; Whether interest or other charges are continuing;
  • The date of the letter, towards the top of the first page;
  • Details of the debt – for example if it’s based on an oral agreement you need to supply information on who made the agreement, what was agreed and when or where it was agreed;
  • If the debt arises from a written contract you need to supply information on the date of the agreement, the parties involved and we’d advise that you enclose a copy or state that it can be requested from the you (note that this last option is likely to delay the process)
  • Details of any assignment of the debt;
  • Details of any regular instalments that are currently being paid or offered, with an explanation as to why this is not acceptable and why a claim is still being considered;
  • How the debt can be paid, and what the debtor needs to do if they want to discuss payment options;
  • The address to which the reply should be sent.

The letter before claim should also enclose:

  • An up-to-date statement of account for the debt
  • An Information Sheet (found at Annex 1 of the Protocol)
  • A Reply Form (found at Annex 1 of the Protocol)
  • A Financial statement for the debtor to complete (example found at Annex 2 of the Protocol).

The letter must be dated, and posted out the same day or the following day.


The debtor will have 30 days to respond to the letter. If no response is received you may proceed with legal action but only after you’ve given 14 days’ notice of your intent to proceed to court.

If the debtor does respond, the parties will have at least 30 days to discuss the debt to see if the matter can be resolved without the need of going to court. For this purpose there is a Reply Form in attached to the Protocol (the link can be found below). The debtor should also indicate if he or she is seeking legal advice and must be allowed a reasonable period of time to do so, for this purpose the 30 day period can be extended.

The debtor can also request copies of relevant documents to assist in establishing the position as early as possible. If the document(s) is unavailable then the relevant party must explain why. Where the debtor has requested more information in their Reply Form, you should not start proceedings until 30 days after providing the documents.

If the debtor makes an offer that is not accepted, the reasons must be given. You should then give 14 days’ notice of your intention to proceed to court.

Why does it matter?

The Protocol aims to encourage communication and exchange of information early on with a view to avoiding court proceedings. If a debtor has all the information they can make an informed decision – whether that is to make payment arrangements or to give details of why they disagree - to try to avoid going to court.

The Protocol also encourages parties to consider Alternative Dispute Resolution to resolve disputes without the need of going to court.

Failure to comply may lead to sanctions being imposed by the court, usually in the form of a cost order. FSB members have right of membership access to

The new principles are summarised in the Pre-Action Protocol for Debt Claims.