Solicitors Letter Before Claim

A Solicitor’s letter before claim (also known as a letter before action) is a formal letter that requests the payment of a debt to your business and warns of the imminent issue of a court claim. The document sets out what is owed to your business from a debtor and provides a set time period in which to pay. This is an essential requirement of the debt recovery process. Before issuing any legal proceedings, a Letter Before Claim must be sent or costs may be forfeited. In this article, solicitor’s letter before claim, we take a look at the mechanism and process involved.

Free Initial Telephone Discussion

For a free initial discussion on how we can help you deal with a company that owes you money by way of a letter before claim, get in touch with us today. We will review your situation and discuss the process involved in a clear and approachable manner. Early expert legal assistance can help you avoid making mistakes, saving you money and also avoiding the stress of dealing with these issues on your own. Simply call us on 0345 901 0445 or complete our online enquiry form and a member of the team will get back to you.

What are Pre-Action protocols?

If your debtor is a sole trader (or individual), from October 1st 2017 you must adhere to the Pre Action Protocol for Debt Claims and are no longer able to send a standard Letter Before Action.

The Protocol applies to any business (either a partnership, sole trader, public body or in limited form) when claiming debt from an individual. However, it should be noted that it does not apply to debts between businesses.

The intention of the pre-action protocol is to try and encourage both sides to start talking early on and consequently reduce the likelihood of going to court to address the matter. This also includes the possibility of using an Alternative Dispute Resolution Procedure. It seeks to encourage the parties to mitigate any escalation of costs by acting in a reasonable manner.

The Protocol requires the creditor to send a letter of claim by post (unless the debtor has specifically indicated otherwise). The letter must include a prescribed list of information which includes:

• A breakdown of the outstanding debt.
• Details of the agreement under which the debt arises.
• The date of any written agreement, details of the parties, and confirmation that a copy of the agreement can be provided if requested by the debtor.
• Details of any assignment of the original debt, when it was assigned and to whom.
• An up to date statement of the account.
• Details of how the debt can be paid along with details of how to proceed should the debtor wish to discuss payment options and;
• The address to which the completed reply form and completed financial statement should be sent.
• You should give the debtor 30 days to pay if they are an individual.

The Protocol sets out that further information should be attached to the letter of claim to include an information sheet, reply form and financial statement.

What happens if there are no Pre-Action protocols to follow?

If there are no Pre-Action Protocol steps to follow, the following steps should be taken:

1. the claimant should write to the defendant with concise details of the claim. The letter should include the basis on which the claim is made, a summary of the facts, what the claimant wants from the defendant, and if money, how the amount is calculated;
2. the defendant should respond within a reasonable time – 14 days in a straight forward case and no more than 3 months in a very complex one. The reply should include confirmation as to whether the claim is accepted and, if it is not accepted, the reasons why, together with an explanation as to which facts and parts of the claim are disputed and whether the defendant is making a counterclaim as well as providing details of any counterclaim; and
3. the parties should disclose key documents relevant to the issues in dispute.

How we can help

We have a proven track-record of dealing with and advising on debt recovery for individuals and businesses and drafting Letters Before Claim. We will guide you through the process and ensure all checks are carried out swiftly and efficiently and we firmly believe that with the right solicitors by your side, the entire process will seem more manageable and far less daunting.

How to Contact our Commercial Litigation Solicitors

It is important for you to be well informed about the issues and obstacles you are facing. However, expert legal support is crucial in terms of reducing risk, saving you money and ensuring you achieve a positive outcome.

To speak to our Litigation solicitors today, simply call us on 0345 901 0445, or allow a member of the team to get back to you by filling in our online enquiry form. We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.

Authored by Ben Posted in Litigation, News Tagged as