Identifying the Debtor

Identifying the correct parties to an action is important to avoid proceedings being struck out or amended. It is equally important to proceed with action against the Debtor in their proper capacity.

It is likely most debtors will fall under the following categories: Sole Trader, Individual, Partnerships, Limited Liability Partnerships or Companies, so who exactly are you suing?

• Sole Traders will be sued as an individual, as such the Pre-Action protocol for debt claims must be followed when sending a Letter Before Action and 30 days has to be given for a response. Under CPR Practice Direction 16.2.6(b) the full name of the individual along with the trading name must be given.
• Action can be brought against individuals within their own name followed by the words ‘trading as [business name]’. Again, the Pre-Action protocol for debt claims must be followed, and 30 days given to respond.
• With Partnerships partners of the business are jointly and severally liable for the firm’s debts. This means you can choose all or specific partners to sue. The alleged partners carrying out business in the Jurisdiction of England and Wales at the time the debt arose may be sued in the business name. It must be noted that liability only arises with those partners who were members of the partnership when the debt arose. Please note that the Pre-Action protocol for protocol for debt claims does not apply to Partnerships as they will be sued as a company, the procedure to follow will be addressed later.
• Limited Liability Partnerships must be sued in its corporate name and must end in ‘limited liability partnership’. LLP’s will be sued as a company.
• Registered companies will be sued under their registered name. . As the debt is owed by a company the Pre-Action Protocol for debt claims does not apply.

Now you have identified the debtor, you or your solicitor should carry out pre-action profiling on the debtor and their assets.

Before commencing action against a company, a check should always be done on Companies House to determine the company’s registered office address, if the company is still active and its filing history. Companies House will state if the company is listed for strike off, has insolvency proceedings being made against it or if they have changed their name or address.

With an individual or sole trader, if contact has not been made for a long period of time or you believe circumstances have changed it may be worth pursuing a trace or a pre-sue report from a tracing agent to determine the current address and situation of the debtor.

Pre-action profiling is important as it can save you time and fees in the future as you can determine from the outset if the debt is worth pursuing.

Amy Carlton is a debt recovery manager at law firm Sintons. To speak to Amy about any debt-related matter, contact her on 0191 226 3649 or amy.carlton@sintons.co.uk.