The Ministry of Justice (“MoJ”) is seeking to change what steps must be taken by a party seeking payment of a debt prior to issuing a claim in the County Court. This will involve the introduction of a new pre-action protocol for debt recovery (“the Protocol”). Pre-action protocols should be followed in all but exceptional circumstances or a school can run the risk of costs sanctions against it.
The Protocol will substantially increase the burden on schools pursuing fee recovery claims against parents and will increase the time it takes to issue proceedings. The key proposed changes include:
Extending the time period for a parent to respond to an initial letter before action from 14 days to 28 days;
A requirement that additional documents (we already provide a copy of the outstanding invoice(s)) be provided with the letter before action including, but not limited to, a full copy of the contract, a reply form in a prescribed format for the parents to complete and a full copy of the Protocol;
Where a parent advises that they are seeking legal advice, the school must allow the parent additional time (up to 56 days) to seek that legal advice before commencing proceedings.
To add to the changes, it should also be noted that the MoJ has also consulted on a new method for calculating court issue fees for claims over £10,000. Instead of the usual sliding scale, the courts will be introducing issue fees set at 5% of the value of the claim. This will mean a substantial increase in the cost of issuing some claims over £10,000, although the exact size of the increase varies due to the previous fees being set by banding.
Whilst it has yet to be confirmed, it is anticipated that the Protocol and/or the changes to the court fees (in their final form) may come into effect from as early as April 2015.