I wrote a piece on the Pre-Action Protocol for Debt Claims yesterday – link here. I took the title at face value and assumed that it was about Debt Claims – by businesses against customers or possibly others for sums of money that were owed by individuals.
However, the definition of scope is surprisingly wide:
1.1 This Protocol applies to any business (including sole traders and public bodies) claiming payment of a debt from an individual (including sole traders).
A number of people have pointed out to me that most claims for possession or forfeiture of leases include a claim for payment of a debt – the rent or service charge arrears – and so the Protocol appears to apply to them.
Now the Protocol doesn’t apply when the debt is covered by another protocol (para 1.4) but the only possession claims that are covered by their own protocols are mortgage possession claims and possession claims by social landlords. The other claims – for ASTs based on rent arrears (Grounds 8 or 10 or 11), for long residential leases based on arrears of rent or service charges, and even for business tenancies where the tenant is a sole trader – are not, so the Protocol presumably applies. In all of these cases the Landlord invariably asks for a money judgment against the Tenant for the amount of the arrears, and this is clearly a “debt” in the normal meanong of the word.
I haven’t thought it all through, but I can’t think that this was entirely intended. The timescales in the Protocol don’t really fit in at all well to the normal commercial timescales in possession claims. Is the tenant really going to be given up to 90 days before possession proceedings can be brought against them, when the rent is normally payable monthly, or even weekly? Is the Landlord going to have to ask for possession but not a money judgment until a lot later, when the tenant has possibly moved out?
And what about the complicated procedure for claims for service charges, with all their applications to the FTT, or the rules on payment for maintenance, complete with the mechanism for consultation beforehand, payments of estimated sums on account, followed by balancing charges, and so on? This really doesn’t tie in with the Protocol procedure.
I just don’t know, because it was only drawn to my attention by James Attew of Brethertons today (here) and I had previously thought that as the Protocol has been around in draft form since late 2015 somebody would have thought of this by now.
Now it may be that there is going to be a new protocol covering all this, although I haven’t heard anything about it. Or the courts are going to say that “debt” doesn’t mean “debt” for these purposes, or something. I just hope that it isn’t another mess-up on the lines of the deposit protection fiasco, because that is rather what it looks like at present.
Any views would be most welcome.