School fees and the new Pre Action Protocol for Debt Claims

A new Pre-Action Protocol has come into force relating to claims for a debt owed by an individual to a business. The Protocol is active as of 1st October 2017 and has a far-reaching impact on any situation where a business is claiming a debt payment from an individual. This includes schools claiming for unpaid school feels. Overall, the Protocol is designed to encourage businesses to be more patient when collecting debts from individuals, to allow for genuine attempts at payment and also for debt advice to be sought. Reputationally and financially there may be some uncomfortable consequences if the Protocol is not followed, including cost sanctions and the ultimate inability to recover the debt.

Enhanced letters of claim

One of the key features of the Protocol is the need for a much more detailed letter of claim. This must include a wealth of information, such as full details of the agreement that created the debt, information on assignment if the debt has been dealt with that way, as well as financial data, including the total debt and whether interest or charges are continuing. Plus, there should be an explanation as to why any payment plans proposed by a parent have been turned down. Every school dealing with these kinds of arrears will also now need to ensure that they also enclose:

• Information on how to repay the debt
• An information sheet and reply form, as well as the address to which the reply form should be sent
• A financial information form (in the format required)
• An up to date statement of account or the most recent statement of account with any additional information required to bring it up to date

In addition to the enhanced letter of claim there are a number of other factors that now need to be taken into consideration where claiming outstanding school fees is concerned:

1. Parents have 30 days to respond to the letter of claim and a court claim cannot be commenced in that time. This time period can be extended for a parent to seek debt advice. In total, proceedings can now be delayed by up to 90 days.

2. If any documents are requested from the school these need to be provided within 30 days.

3. The Protocol seeks to encourage parents and schools to come to an agreement to resolve the issue outside of the courts system. So, schools are required to try to agree a repayment schedule based on the parent’s financial circumstances – or to communicate why what has been proposed is not appropriate.

4. 14 days notice must be given to parents in advance of court proceedings. However, before this point appropriate steps must have been taken to try to resolve the issue out of court – even if the repayment schedule was not initially agreed.

Avoiding the issues raised by the new Pre-Action Protocol for Debt Claims

• Ensure that admissions agreements are professionally drafted and watertight
• Create an unambiguous process for dealing with outstanding school fees, from warning letters, to exclusion if necessary. Make sure parents are well aware of this before any issues arise
• If fees are outstanding, take steps to ensure that the debt does not increase
• Look into the options for credit checking parents at the same time as offering a school place
• Make sure you have access to swift and timely legal advice to avoid unnecessary delay or escalation

2018-07-02T13:08:33+00:00 July 2nd, 2018|