A Letter Before Action (LBA), also known as a Letter Before Claim (LBC), is a formal legal notice sent by a claimant to a potential defendant in relation to a dispute.
Often used to begin debt collection claims, it provides the defendant with the opportunity to settle the dispute before court proceedings are initiated. Typically, an LBA outlines the basis of the claim, any money owed (or other remedy sought), the consequences of inaction, and the deadline for a response.
Aside from debt collection, LBAs can also be used in any civil dispute case, including breach of contract, property and construction issues.
A Letter Before Action is a key aspect to any claims process, and as outlined above, not solely for debt recovery. It acts as a clear record of communication between parties and aids in encouraging early settlement in dispute cases.
If you are currently dealing with a dispute and would like to know more about the process of writing a Letter Before Action, our trained Dispute and Litigation Solicitors are available to provide support and guidance.
How to Write a Letter Before Action?
As briefly already mentioned, a Letter Before Action is created by a claimant and provides notice to a defendant before going to court.
It is a formal legal document acting as one of the first parts of the dispute resolution procedure, and typically details the following:
- The claimant’s personal and contact details.
- The defendant’s personal and contact details, including company details if applicable.
- A clear description of the claim, including reasons for the claim.
- Any applicable reference numbers and details of any associated transactions.
- The amount of money owed to the claimant and how it was calculated or the remedy sought.
- Consequences if the defendant does not respond to, or make arrangements to settle the claim, for example starting court proceedings.
- A deadline for response.
- Details of resolution options, such as bank details to pay the debt, or options for alternative dispute resolution (ADR).
The letter plays an important role in the litigation process as it provides a clear, documented opportunity to settle a dispute before starting court proceedings; if the matter does go to court, it will be expected that a pre-action protocol such as this has been attempted.
Parties who successfully settle their claim outside of court can expect to save a great deal of time and money, so it is always recommended to attempt to do so.
If you would like support in creating your Letter Before Action, please get in touch with us today and we can walk you through the process.
Letter Before Action vs Letter Before Claim
There is no difference between a Letter Before Action and a Letter Before Claim. You may also come across the term Pre-Action Letter, which again refers to the same legal document.
When Should I Send a Letter Before Action?
An LBA shows the defendant you are serious about your dispute, and is typically issued once all informal avenues of reaching an amicable outcome are exhausted.
This is true of both personal and business-related disputes. If you decide that the matter is serious enough to escalate, you should begin thinking about a formal method of dispute resolution such as an LBA.
Depending on your personal circumstances, you may wish to explore another form of dispute resolution first, such as mediation, or negotiation.
You may wish to send an LBA under the following circumstances:
- Invoices have remained unpaid for more than 14 days (business to business).
- You have attempted to contact the individual/company regarding payment and have had no response.
- There has been no communication at all and the payment deadline has passed.
It’s important to note that if you are a business pursuing an individual, you should provide a longer payment deadline of 30 days.
Timing can be critical, and as previously stated, it is sensible to attempt to collect payment amicably first, before issuing a Letter Before Action. However, waiting too long can also present issues such as insolvency, or lack of key witnesses.
Is a Letter Before Action Legally Required?
Yes, issuing an LBA is a legal requirement and forms part of the Pre-Action Protocol for debt claims.
It is part of the Civil Procedure Rules (CPR) in relation to any business claiming payment of a debt from a sole trader or individual. It is required that the claimant issues an LBA and provides at least 30 days for the defendant to respond before court proceedings begin.
If these rules are not followed, there are a number of outcomes that the court may enforce:
- The court may order that the proceedings are paused to allow pre-action requirements to be completed.
- There may be additional costs for the non-compliant party.
- The court may award less money to the claimant for not following procedure.
- The court may dismiss part of, or the entirety of the claim.
Contact Eric Robinson Solicitors
In conclusion, it is imperative that a Letter Before Action (also referred to as a Letter Before Claim) is issued to a defendant in good time to attempt a resolution before the matter is taken to court.
This provides an opportunity to solve the issue in less time, with less expense on both sides. If court cannot be avoided, you are in the best position to move forward and retrieve the funds owed to you.
If you would like to find out more about creating a Letter Before Action or would like some general advice and information, please feel free to contact our team of expert solicitors at one of our south England branches:
