A letter before action, sometimes called a letter before claim, is the last formal demand you send before starting court proceedings. It sets out the debt, the basis for it, the deadline for payment and what you intend to do if that deadline passes.

What it is

Unlike a reminder, a letter before action is written with the court in mind. If the debtor ignores it and you issue a claim, the letter shows the court that you gave them a fair chance to pay or respond. That matters, because the court can take a party’s pre-action conduct into account when it decides who pays the costs.

It also tends to work. Many businesses that have ignored three polite emails pay, or at least reply, when a dated letter with a deadline and a clear consequence arrives.

What the courts expect

In England and Wales, where the debtor is a limited company there is no specific pre-action protocol for debt claims. The Practice Direction on Pre-Action Conduct applies instead. It expects you to explain the claim concisely, say what you want and give the debtor a reasonable time to respond.

If the debtor is an individual or a sole trader, the separate Pre-Action Protocol for Debt Claims applies, with its own prescribed forms and a 30-day response period. That is one reason the entity you are dealing with matters so much, and why we only take enquiries about limited company debts.

What to include

  • Who you are and who owes the money. Your business name, and the debtor’s full registered name and company number.
  • The debt. Each invoice number, date, due date and the amount outstanding, with the total.
  • The basis. A sentence on what was supplied, when and under what terms.
  • Interest and compensation. The statutory interest and fixed sums you are claiming, with the calculation to date.
  • The deadline. A specific date. Fourteen days is common for a straightforward trade debt; allow longer if the matter is complex.
  • The consequence. That you intend to issue court proceedings without further notice if payment is not received, and that you will seek costs and interest.
  • How to pay and how to respond. Bank details, and an invitation to contact you if they dispute the debt or want to propose a payment plan.
  • Copies. The invoices and, if helpful, the order or agreed terms.

Keep the tone factual. A calm, complete letter is more persuasive than a threatening one, and it reads better in front of a judge.

How to send it

Send it to the company’s registered office address, which you will find on Companies House, as well as to your usual contact. Use a method that gives you proof of posting or delivery, and email a copy. Keep a signed, dated copy for your records together with the proof of sending.

After the deadline

Three things usually happen. The debtor pays, in which case the letter has done its job. The debtor replies with a dispute or a proposal, which tells you what you are really dealing with and gives you something to negotiate. Or the deadline passes in silence, and you decide whether to issue a claim, instruct a recovery partner or write the debt off.

A letter on a solicitor’s or recovery partner’s letterhead carries no extra legal weight, but it often carries more practical weight. If you make an enquiry with us, an independent partner can explain whether a formal demand from them is the right next step and what it would cost.

Deadline passed in silence?

Tell us about the invoices and the company that owes you. We’ll consider whether an introduction to an independent recovery partner is appropriate. Free, with no obligation to proceed.

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This post provides general information about the position in England and Wales, not legal advice. Court procedure differs in Scotland and Northern Ireland. No Win No Fee Services makes introductions; independent partners assess and provide recovery services.