The debt PAP rears its head - again

18 May 2017


The proposed pre-action protocol for debt claims against consumers (the PAP) is proving to be contentious, with various stakeholders dissatisfied. Gowling WLG's Greg Standing writes.

The PAP, drafted in 2012, has been out to consultation twice and came back before the Civil Procedure Rules Committee (CPRC) in December 2016 for sign off. It now awaits the approval - or otherwise - of the Master of the Rolls.he terms of the proposed PAP for debt claims against consumers have proved to be somewhat contentious with stakeholders on both the credit and debt advice side dissatisfied with the proposals.

The PAP sets out details of the conduct the court expects parties to engage in prior to commencement of proceedings. The tone of the current draft has changed following the consultations, to focus less on disputes and more on the resolution of outstanding debts, with the emphasis on encouraging debtors to contact creditors about their debts.

A core principle of the PAP remains to ensure that debtors are provided with sufficient information to enable them to obtain advice on their position prior to the issue of a claim.

However, the information sheet, which must be provided to the debtor with the letter of claim, has been significantly cut down to avoid information overload, a recommendation which featured in consultation responses from stakeholders on both sides.

Provision of the credit agreement

The CPRC has signed off the PAP despite one of the most contentious issues not having been agreed: whether a copy of the written credit agreement (the Agreement) should be provided up front in all cases.

The first draft of the PAP provided for the Agreement to be provided in all cases at the pre-action letter of claim stage. On consultation, the creditor and debt purchase sectors felt strongly that the Agreement should only be provided at the pre-action stage where necessary or requested. The debt advice sector disagreed. By way of compromise, the PAP was amended to provide for the Agreement being provided unless to do so would be disproportionately burdensome to the creditor.

Respondees to the second consultation were no more enamoured of that caveat. The debt advice sector considered that it created scope for abuse. The credit sector considered that it would always be disproportionately burdensome to provide the Agreement at the pre-action stage when it is statistically unlikely to be required. Respondees across the board considered the caveat generated uncertainty and were fairly polarised in relation to support for the PAP generally.

The CPRC considered that caveat untenable and the question therefore remains whether the Agreement should be provided to debtors upfront in all cases, only on request or whether some other formulation is preferable.

The PAP and the online court

A further issue is whether the PAP should be introduced before the introduction of Lord Justice Briggs' Online Court for resolving money claims (of up to £25,000).

The argument is that the PAP is inconsistent with the aim of modernising and digitising the judicial system, and reducing the volume of paperwork involved.


Although the protocol has been signed off by the CPRC, in what final form and when the PAP will be introduced into the Civil Procedure Rules and brought into force remains uncertain to say the least.

This article originally appeared in Motor Finance in March 2017.

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