Changes to Pre Action Protocol

[AndyOrch]

Citizens Advice is deeply concerned about the changes to charging order legislation. CAB evidence already shows that some creditors may use court action and enforcement of court orders inappropriately, and that such use of enforcement can be exacerbated by unsuitable court practice. Increasing numbers of bureaux are reporting that more courts are now making ‘forthwith’ judgments which require immediate payment in full, instead of instalment orders, even where debtors have fully informed the court of their inability to pay large instalments. A ‘forthwith’ judgment means that the debtor is immediately in default of the court order and the creditor is able to take enforcement action. Where the debtor has equity in their home, a charging order will ensure that the debt will be repaid when the property is sold, either by the debtor themselves or following an Order for Sale. This new practice of many county courts and creditors results in very extreme consequences for relatively small debts.

 

In the current economic climate, litigation is an important last resort for businesses to recover debts and resolve disputes. A new pre-action protocol sets out the steps that parties to civil litigation should take before most proceedings are issued, including specific requirements for debt claims against

 

On 6 April 2009 a new general protocol will replace the CPR Practice Direction - Protocols CPR Practice Direction - Pre-Action Conduct; see CLM ¶7139). The existing protocols for specific types of claim will remain in force.

The new protocol will apply to all types of proceedings (including those governed by specific protocols), except where there is no dispute involved or where telling the other party in advance would defeat the purpose of the proceedings (for example, an application for an order to freeze assets). It is intended as a guide for the parties, especially those who are not legally represented.

It sets out the approach of the court in relation to pre-action conduct and requirements that apply in all cases. It also sets out the pre-action procedure to be followed where no specific protocol or other formal pre-action procedure applies.

 

Before issuing a claim in court, the claimant should write to the defendant giving him concise details about the matter. This letter before claim should include the claimant's full name and address;

 

the basis on which the claim is made

a clear summary of the relevant facts;

what the claimant wants from the defendant and, if financial loss is claimed, an explanation of how the amount claimed has been calculated;

a list of the documents which the claimant intends to rely on;

a request for copies of any documents not in the claimant's possession and which the claimant wishes to see;

details of any funding arrangement that the claimant has entered into;

an invitation for the defendant to agree to an appropriate form of alternative dispute resolution (if any);

the date by which the claimant considers it is reasonable for the defendant to have provided his full response.

Unless the claimant knows that the defendant is legally represented, the letter before claim should also refer him to the practice direction and inform him that ignoring the letter may lead to proceedings being started and may increase his liability for costs.

The defendant should provide a written acknowledgement within 14 days of receipt of the letter before claim, where he is unable to provide a full response within that time.

 

The acknowledgement should state:

whether an insurer is or may be involved;

the date when a full response will be provided, giving reasons why any longer period is needed. If this is because the defendant intends to seek advice then that fact should be stated, as well as who he intends to seek advice from and, once that advice is received, when he expects to be able to give a full response. The claimant should allow a reasonable period of up to 14 days for the defendant to obtain advice.

The defendant may also request further information from the claimant to enable him to provide a full response.

 

The defendant's full response should either accept the claim in whole or in part, or state that it is not accepted. Unless the defendant accepts the whole of the claim, the response should include:

the reasons why it is not accepted, identifying which facts and parts of the claim (if any) are accepted and which are disputed;

whether the defendant intends to make a counterclaim (if so, he must provide information equivalent to that required in a letter before claim);

 

whether the defendant alleges that the claimant was wholly or partly to blame for the problem and, if so, why;

whether the defendant agrees to the claimant's proposals for alternative dispute resolution. If not, the reasons why not and a suggestion for an alternative form

a list of the documents which the defendant intends to rely on;

copies of any documents requested by the claimant, or an explanation why these will not be provided; and

a request for copies of any further relevant documents not in the defendant's possession and which the defendant wishes to see.

 

If the defendant does not provide a full response within the period stated in the letter before claim (or any longer period stated in his written acknowledgement) and a claim is subsequently issued by the claimant, then the court is likely to consider that the claimant has complied with the protocol. If the claimant issues a claim before the end of any longer period stated in the defendant's written acknowledgement, the court will consider whether that longer period was reasonable.

 

The claimant's reply should include any documents requested by the defendant (or an explanation in writing why these will not be provided) and, if the defendant intends to make a counterclaim, information equivalent to the defendant's full response

. When the above steps have been followed it should be possible for the parties to take stock of the issues that remain outstanding (to narrow the scope of the proceedings and limit potential costs) and their respective positions to see if proceedings can still be avoided

Where a business intends to pursue a debt claim against an individual, it should also:

provide the defendant with details of how the money can be paid, for example, the method of payment and address to which it can be sent;

provide contact details for the claimant so the defendant can contact it to discuss possible repayment options; and

inform the defendant that free independent advice and assistance can be obtained from organisations including the National Debtline, the Consumer Credit Counselling Service, Citizens Advice and Community Legal Advice (giving contact details for these).

 

This information can be provided at any time between the claimant first intimating the possibility of court proceedings and the letter before claim. The claimant should allow a reasonable period of up to 14 days for a defendant to obtain debt advice, unless the claimant knows that the defendant has already received relevant debt advice and his circumstances have not significantly changed, or the defendant has previously asked for time to seek debt advice but has not done so.

 

Regards

 

Andy

Edited July 6, 2010 by Andyorch

[Ganymede]

That seems like the 49th Amendment to the CPR, but it's hard to read, and is over a year old! :confused:

[robcag]

Although this seems to have been in force for some time now, in my experience claimant creditors/DCA solicitors (e.g. Morgan Solicitors, Irwin Mitchell Solicitors) are ignoring several parts of it, especially the requirement to list the documents they will seek to rely on in court.

 

Cheers

Rob

[AndyOrch]

That seems like the 49th Amendment to the CPR, but it's hard to read, and is over a year old! :confused:

 

Yes it does state 6th April 2009

 

A lot of Caggers are probably not aware as many receive AQs stating that no Pre Action Protocol applies to this claim well it does!!!!

 

 

 

Andy:cool:

[NewToTheFight]

Where can I find this documentation Andy?

If a claimant has not complied will that have an adverse effect on them in front of a judge?

[AndyOrch]

Hi NTTF

 

Its quite common knowledge within the legal profession but something that Creditors are not willing to aspire or comply to

 

CPR Amendments - Changes to pre-action rules for debt ...

 

With regards to your second point would depend if the DJ is aware or how vigorously you argue the point.

 

Regards

 

Andy

[NewToTheFight]

Thanks Andy, I have found them & will study.

Lets say, the correct pre action protocol has not been followed, I put it in my defence & make sure the point is highlighted in court.

What sanctions, if any, are brought for failing to comply with either the spirit or the letter of the preaction protocols or the CPR?

[AndyOrch]

A county court may make an order subject to conditions and specify the consequence of failing to comply: CPR 3.1(3). Where a party has failed to comply with a rule, practice direction or court order, any sanction for failure to comply has effect unless the party obtains relief from the sanction: CPR 3.8(1). On an application for relief, the court must consider all the circumstances including, inter alia, whether the failure to comply was intentional and whether there is a good explanation for it: CPR 3.9(1). A court may make an order without hearing the parties (CPR 3.3(4)) but, if it does, a party affected by the order has the right to apply to have it set aside, varied or stayed and the order must contain a statement of the right to make such an application: CPR 3.3(5). On appeal, the appeal court has all the powers of the lower court, including the power to affirm, set aside or vary any order or judgment made or given by the lower court: CPR 52.10(1) and (2).

 

 

CPR 1.3 requires parties to help the court to further the overriding objective. The overriding objective in turn requires the court to ensure that cases are dealt with expeditiously and fairly with and with an appropriate share of the court’s resources. CPR 1.4 requires the court to further the overriding objective by actively managing cases. This specifically includes “encouraging the parties to use alternative dispute resolution procedure if the court considers that appropriate and facilitating the use of such procedure” and “helping the parties to settle the whole or part of the case”. A party who fails to take steps to settle their dispute and who consequently takes up the court’s time and resources where a compromise might have been achieved breaches their duty under CPR 1.3.

 

 

Regards

 

Andy;)