On 6th April 2009 further changes to the Civil Procedure Rules took effect. Some of these changes have particular significance to matters involving debt recovery where the creditor is a business and the debtor is an individual. There is a new protocol whereby a court will scrutinise the conduct of both parties prior to any court action.

Jean Hendry from Whitehead Vizard Solicitors says

"Two important changes need to be noted. It is now mandatory to send a Letter before action (LBA) to the client. The LBA is just what it says - a letter notifying someone of the intention to take legal action.

"It must be made clear in that letter that if the dispute cannot be resolved the net result will be court action by the creditor against the debtor.

"It has always been a matter of good practice to give forewarning of potential litigation but now it is even more important as it goes towards reasonable conduct.

"In other words, the business creditor must be seen to be giving every opportunity to the debtor to pay his debt and court action should be the last resort.”

"Failure to send a Letter before action before commencing proceedings could lead the court to find that you have acted unreasonably. Ignorance of the law is no defence and it will not necessarily help your case if you claim not to know about the recent changes in the law. Often, a well drafted letter before action can resolve the matter, thereby avoiding the necessity for court action."

“The second change that has occurred is that the LBA must also contain the names of at least two organisations offering free debt advice.”

“The LBA is part of the Civil Procedure pre action protocol- in other words it goes towards what is classed as ‘reasonable behaviour’ on the part of a claimant. Obviously, it only applies if the creditor is intending to take legal action (making a county court claim, serving a statutory demand or some other method). Any method which is going to end up in court will require this. These requirements will now apply in every case, regardless of how the debt arose or what sum is actually owed” says Jean.

In many instances a letter before action could lead to a resolution, which is great news for both the creditor and debtor.

“Whilst writing your own LBA is possible, it is advisable to use the services of a solicitor to ensure the law is complied with.”

For further information about how Whitehead Vizard can help with business debt recovery, civil litigation, and bankruptcy proceedings, please contact Jean Hendry, Whitehead Vizard Solicitors, Close Gate Chambers, 60 High Street, Salisbury, Wiltshire,

SP1 2PQ. Tel: 01722 412141 or e-mail her at: jh@whitehead-vizard.co.uk.