A Pre-Action Protocol (PAP) sets out the steps that a court would expect to be followed before a civil case is started. At the moment there isn’t one for unsecured debts, but a Debt PAP has been under consideration for over three years. Following a consultation on a draft in September 2014 (let’s not rush these things!) extensive revisions have been made and in November 2015 a new draft is now out for consultation.
UPDATE December 2016 Another year, another small step forward seems to have been made, see Joint statement by the Credit Services Association and the Civil Court Users Association: the PAP is likely to be in place next year, 2017.
A two stage process
Creditors complained that the previous draft required them to send too much information to the debtor. In response to this a new approach is being proposed:
“A two-stage approach has now been adopted, whereby some information will be provided to debtors as of right with / in a Letter of Claim, with other information and documents being available on request, and debtors being prompted to consider what information they might wish to ask for.”
I can’t see why a creditor shouldn’t have to provide enough information to prove that someone owes a debt and that it is enforceable to every debtor, and I suspect most debt advisors would agree. However, the proposed 2 stage Debt PAP is a big advance on no PAP at all…
There are two places where I think it can be made clearer:
People have to tick one of the first 4 boxes:
BOX A I agree I owe the debt.
BOX B I owe some of the debt, but not all of it.
BOX C I don’t know whether I owe the debt. Tick this box if you’re not sure whether you owe the debt and you need help from a debt adviser to work out whether you should pay
BOX D I don’t owe the debt
It isn’t clear what someone should do if they just want to ask for additional information at this point so they can decide what to do. Presumably tick Box C – but the wording says this is if you are taking debt advice. I suggest that the wording of Box C should be changed to:
Tick this box if you’re not sure whether you owe the debt. You may want to get additional information from the creditor (in which case go to section 4) and / or you need help from a debt adviser to work out whether you should pay (in which case go to section 3).
Which box is someone meant to tick if they agree they owe the debt but they consider that the debt is unenforceable? These situations are not uncommon and they really should be cleared up at the PAP stage, without wasting court time. I suggest an additional box is needed (and all subsequent boxes re-lettered):
BOX E I owe the debt but it is not enforceable
Tick this box if you believe the debt is statute barred (you may want to get help from a debt advisor to confirm this), or if it is currently included in insolvency proceedings (DRO or IVA), or it is not enforceable for some other reason.
The debt is not enforceable because ……………
Give as much detail as possible.
Do you agree with the PAP or my suggestions?
Responses should be sent to Jane Wright by 11 January 2016, Post Point 3.32, Ministry of Justice, 102 Petty France London SW1H 9AJ, or to email@example.com with “Debt Protocol Consultation” as the subject of your email.