When does the Pre-Action Protocol for Debt Claims apply?
It applies in England and Wales when the creditor is a business and the debtor is an individual. “Individual” includes a sole trader invoiced in their own name, even under a trading name.
The creditor’s legal form does not take you out. A limited company chasing a sole trader is inside the protocol.
The protocol is the conduct the court will normally expect before proceedings start (paragraph 1.2): early information, a chance to settle, and proportionate conduct (paragraph 2.1).
It does not apply where another protocol covers the debt (for example Construction and Engineering or Mortgage Arrears), or to HMRC claims under Practice Direction 7D (paragraph 1.4). GOV.UK notes a different process in Scotland and Northern Ireland.
When does the Debt PAP not apply to limited companies?
If the debtor is a limited company, an LLP, or another corporate body, the Debt PAP does not apply. That is true even when the creditor is a sole trader. The test is the debtor, not the supplier.
Company-to-company unpaid invoices follow Practice Direction – Pre-Action Conduct and Protocols. Paragraph 6 expects a concise letter setting out the basis of the claim, a summary of the facts, what you want, and if money, how the amount is calculated; a reasonable time to respond (14 days in a straightforward case, no more than three months in a very complex one); and disclosure of key documents.
That letter is what commercial recovery usually calls a letter before action. Calling it an LBA does not bring a company debtor inside paragraph 1.1.
Do not wait 30 days and enclose the Information Sheet because the invoice was “B2B”. Do not send a seven-day “final demand” to a sole trader and treat it as protocol compliance. Check the legal person on the invoice and Companies House before you write.
Confirm the debt is actually late before you escalate: when a commercial invoice is legally late.
Letter of Claim vs letter before action
Where the Debt PAP applies, the first formal letter is a Letter of Claim, not an LBA. Paragraph 3.1 sets out what it must contain and enclose.
The Letter of Claim should state the amount of the debt; whether interest or other charges are continuing; details of the oral or written agreement; assignment details if relevant; why any instalments are not acceptable; how to pay and how to discuss options; and the address for the Reply Form. It must enclose an up-to-date statement of account (or enough detail to bring the last statement up to date), the Information Sheet and Reply Form (Annex 1), and a Financial Statement form (Annex 2).
Date the letter towards the top of the first page and post it that day or the next (paragraph 3.2). Send it by post (you may also email it). If the debtor has explicitly asked you not to use post, use those details — a term in your standard conditions is not an explicit request (paragraph 3.3).
Where the debtor is a limited company or LLP, there is no Debt PAP Letter of Claim and no duty to enclose those annexes. Follow the Practice Direction. A knowingly false statement in a pre-action letter may be contempt of court (Practice Direction, paragraph 2).
The 30-day timetable, Information Sheet and Reply Form
The 30-day clock is a Debt PAP rule. It is not the waiting period for a company-to-company LBA.
If there is no reply within 30 days of the date at the top of the Letter of Claim, the creditor may start court proceedings, allowing for a reply posted towards the end of that period (paragraph 3.4).
If the debtor returns the Reply Form and is seeking debt advice, do not start proceedings less than 30 days from receipt of the completed Reply Form or 30 days from providing any documents they requested, whichever is later (paragraph 4.2). A document request must be answered, or explained as unavailable, within 30 days (paragraph 5.2).
If they responded but you still cannot agree, give at least 14 days’ notice of your intention to start proceedings, unless there are exceptional circumstances such as limitation about to expire (paragraph 8.2).
Paragraph 3.1(c) requires the Information Sheet and Reply Form in every Debt PAP case. The Reply Form records whether the debtor owes the debt, how they will pay, whether they need advice, and which documents they want. None of that pack is required for a limited company. For a straightforward company debt, the Practice Direction’s 14 days is the usual reasonable time.
The Practice Direction and the protocols do not extend limitation (Practice Direction, paragraph 17). If a limitation date is close, you may issue to protect the claim and then apply for a stay while you complete the pre-action steps.
If the file proceeds to court, the Debt PAP (paragraph 7.1) and the Practice Direction (paragraphs 13 to 16) say the court looks at substance and may stay the claim or make costs orders. Skipping the Letter of Claim and annexes on a sole-trader file is the typical failure. Treating a limited company as an individual delays a claim the Practice Direction already allows after a reasonable time.
A Letter of Claim or an LBA is not a county court claim. GOV.UK states that you can apply to a county court to claim money you are owed by a person or business, online or by post. Issuing is not payment. Recovery is not guaranteed.
If reminders have already failed, a partner debt collection agency can send the letter that matches the debtor. Pass the unpaid invoice via the secure claim form. We introduce the file. We do not issue proceedings.
Frequently asked questions
Does the Pre-Action Protocol for Debt Claims apply to a limited company debtor? No. Paragraph 1.1 says it does not apply to business-to-business debts unless the debtor is a sole trader. Company-to-company claims follow the Practice Direction.
Does the Debt PAP apply if I am a sole trader chasing a limited company? No. The protocol looks at the debtor. If the debtor is a company, it does not apply, even if you are a sole trader.
Does the Debt PAP apply to an unpaid invoice against a sole trader? Yes, if you are a business claiming a debt from that individual. Send a Letter of Claim with the Information Sheet, Reply Form and Financial Statement, and follow the 30-day timetable.
Is a letter before action the same as a Letter of Claim? No. Letter of Claim is the Debt PAP name when the debtor is an individual including a sole trader. Letter before action is the commercial name for the Practice Direction letter, typically company versus company.
How long must I wait before issuing a claim? Under the Debt PAP, 30 days from the date of the Letter of Claim if there is no reply, plus further time if they returned the Reply Form and sought advice or documents, then at least 14 days’ notice if you still cannot agree — unless limitation is about to expire. For a straightforward company debt, the Practice Direction treats 14 days as a reasonable time.
Can Debt Collection UK send the Letter of Claim or the LBA? A partner agency can. We introduce B2B files. We are not solicitors, we are not FCA-authorised, and we do not conduct litigation. Instruct via the secure form on this site. Recovery is not guaranteed.