FEATURE
LEGAL SERVICES
Reviewing the Pre Action Protocol
Claire Twells (pictured), Head of Debt Recovery and Business Development Partner at Smith Partnership, one of the largest firms of solicitors in the East Midlands, looks at the Pre Action Protocol and the effects it has had six months after it came into force.
On 1 October 2017 the Ministry of Justice introduced a new Pre action Protocol (PAP) for debt recovery, when a business was collecting a debt from an individual. Much was made by all debt recovery specialists including ourselves, but were we right to do so? The new protocol applied to any business - including sole traders and public bodies - claiming payment of a debt from an individual - including a sole trader. However, it excludes business-to-business debts - except, it seems, in circumstances where both businesses are sole traders. The new regulations aimed to improve the legal process and encourage better communication and paperwork issued between all parties; to resolve disputes before court proceedings are instigated. Has this happened though? The Ministry of Justice gives out quarterly statistics and
these will help as a starting point to see if the aim of reducing claims into the Court has been achieved. Between January and March 2017, before the PAP,
392,767 money claims were issued of which 76,242 were defended and 316,525 were undefended. Between September and December after the PAP 307,000 money claims issued were were down 17% from the same period in 2016 and down 85,767 from the first quarter of the same year. In the final quarter of 2017 there were 73,000 defended claims and 234,000 were undefended. It seems that the aim of reducing claims
into the court arena was achieved. However, the long-term position needs to be whether the number of trials is also reduced, as this is where the Court spends most of its time
and resources. Between January to March 2017, 292,313 default judgments were granted and 13,477 claims proceeded
to trial. In the final quarter of the same year default judgements were at 87%, an increase of one per cent. Fourteen thousand claims proceeded to trial. From these statistics it appears that the short-term goal of reducing claims issued is being achieved, however the
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www.mscassociates.co.uk 40 business network April 2018
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