Is your business prepared for PAP?
Thursday, 28th September 2017 12:53

From 1st October, a new regulation – Pre Action Protocol - will come into force which will change how debt can be collected from an individual

PAP will apply to any business – and that includes sole traders and public organisations – who are trying to recover debt from an individual (again – this can be a sole trader or a partner in a partnership).

The new legislation primarily allows an increased communication period to encourage parties to engage earlier with a focus on reaching an amicable and beneficial resolution without the need for costly legal proceedings. If litigation cannot be avoided, it is hoped that the Pre Action Protocol will support the effective management of the court case.

The regulations are primarily focused on a shift in timings, particularly regarding communication of intended legal proceedings and debtors will now have 30 days (as opposed to existing 15 days) to respond to the creditor's letter of intention with a reply form which should either settle the outstanding amount or dispute the claim.

Should the debtor require further information at any point during the process the creditor must provide this within another 30 day time frame and allow a 30 day response time. Court proceedings cannot be implemented less than 30 days from receipt of completed reply form or receipt of requested documents from the debtor, slowing the process down considerably.

Whilst the introduction of the new regulation will protect individuals, the process does increase work and costs for the creditor and will result in penalties should the process not be followed correctly, making it more difficult for businesses to recover overdue invoices.

Here at Controlaccount Plc, we are focused on delivering a pre-litigation solution and will work on your behalf to recover your debt, being fully compliant at all times. For more information, please call 01527 549 522.