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What is a letter before action?
2nd Aug 2021
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What is a letter before action? - Linkilaw Solicitors
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A letter before action sometimes referred to as a ‘letter before claim’ is the first step of any claim. The purpose of sending a letter before action is to alert a potential defendant of the claimant’s intention to pursue legal proceedings if his grievances are not resolved.

A letter before action should be used in all types of civil claims, such as in cases where a breach of a contract has occurred, for retrieving monetary debts, stopping an individual from making defamatory remarks, enforcing a contractual right, requesting documentation or data etc.

Why is it important to send a letter before action before going to court?

The courts of England and Wales encourage parties to resolve disputes at an early stage through communication, only considering litigation as a last resort.

Prior to commencing court proceedings, it is crucial to comply with the Practice Direction on Pre-action Conduct and Protocols (the “Practice Direction”) contained in the Civil Procedure Rules (“CPR”).

Paragraph 6 of the Practice Direction states that a letter before action must be sent by the claimant to the defendant outlining the details of a claim. Particularly important are also paragraphs 13 to 16, which provide that the courts have the power to impose sanctions where the pre-action conduct and protocols are not complied with. Examples of sanctions are payment of additional legal costs or reduction on legal costs if they are awarded.

It should also be noted that letters before action can be used as strategic weapons, pushing a party to negotiate or using them as a threat without entering the process of litigation.

What should my letter before action include?

Caution should be taken when drafting your letter before action. It is advisable to instruct a lawyer to draft your letter; this will circumvent possible errors and inconsistencies.

Moreover, a lawyer can outline legal arguments which will increase the persuasiveness of the claim and maximise your prospects of success. Some of the key points contained in a letter before action are:

  • Summary of the facts: This will summarise the legal basis on which the claim is being made and will refer to the contract or agreement entered by the parties. It is important to specify the triggering event which lead to the breach such as: non-payment of an invoice.
  • Claimant’s requests: A claimant must clearly state their demands and specify how the defendant can fulfil these demands. If the claimant is seeking payment for a debt, details of the outstanding debt as well as any interest accrued must be included. It is important to set out how interest is calculated as well as the dates when it became payable.
  • Timeframe: Your letter before action should provide a time limit for compliance. In straightforward disputes the defendant is usually given 14 days to respond. However, time limits vary depending on the complexity of the case but can’t exceed more than 3 months.
  • Consequences: Your letter should clearly warn the defendant of the consequences if they fail to comply within the given time frame. Often a defendant’s non-compliance will result in the claimant issuing court proceedings or worse, seeking a winding up petition in case of a company defendant.
  • Documents: Your letter should refer to and include any documents which support your claim.

letter before action - lawyers

What if I receive a letter before action?

Remain calm and read through the contents of the letter. Your reply should confirm whether the claim is admitted to, disputed or if you wish to make a counterclaim. Consider your position and bear in mind that litigation should only be used as a last resort. It is important to be cautious about making any concessions or admissions.

If the claim is not admitted to, you must provide an explanation of the parts you are contesting. You must collate all documents you have relating to the dispute, and which support your position, and include them in your response.

It is important you respond to the claimant within the timeframe specified. It is advisable to not ignore a letter before action because the issue will escalate further.

We recommend consulting a solicitor to guide you on how to proceed regarding the specifics of your case.

Consequences of non-compliance

Failure to respond to a letter before action will result in the next step of recovery, generally this is court proceedings or a winding up petition can be sought. Failure to respond to a letter of claim would then reveal the other side’s intention. You may receive a claim form, initiating the process of litigation, receive a wind up petition if you are a company or the other party may not act if the letter before claim is purely a strategic move to intimidate you.

The defendant’s non-compliance is a big risk and will be taken into consideration by the court when managing the case and when legal costs are being evaluated. This may potentially leave the non-compliant party in a worse situation.

How could we help

To avoid having a poorly drafted letter before action we are here to help, share our market knowledge and guide you through key concepts discussed above, as well as other provisions important for your letter before action.

Book a call with our experienced legal team to discuss the preparation of your letter before action or your other legal needs.

Our legal commentary is not intended to be a comprehensive review of all developments in the law and practice. Please seek legal advice before applying it to specific issues or transactions. 

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