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What Is a Letter Before Action?

What Is a Letter Before Action?

If you’re attempting to recover an undisputed commercial debt then it’s likely you’ve encountered the term ‘letter before action’. However, if you’re not sure what that term means, and whether it could be an effective debt recovery method for you, then you’ll find the answers in this article…

Letter before action (LBA) definition 
What is a letter before action?
Put simply, a letter before action - which can also be called a ‘letter of claim’ or a
‘letter before claim’ - is a formal letter that is taken as the first step in a
commercial debt collection process.
A creditor (i.e. a business that is owed money) will use a letter before action as a
form of communication with their debtor (the business that owes them their
money). The letter before action acts as a formal statement of the creditor’s
intention to begin legal action against the debtor.
A letter before action is normally sent once all ‘standard’ avenues of debt
collection have been tried (and failed). For example, if a business (the creditor)
has sent an invoice, reminder letters, telephone calls, reminder emails - and not
received a response and settlement of the outstanding debt - they will instruct a
Solicitor to send a letter before action.
The Solicitor will typically send the letter before action as a physical hard copy
letter to the debtor. In order to do this, the Solicitor will require the name and
address of the debtor in addition to the amount they owe the creditor.
The issuance of a letter before action doesn’t necessarily mean you’ll be taking
the debtor to Court. Rather, a letter before action can be viewed as a negotiation
tool - putting pressure on the debtor to settle the money owed.
Given that letters before action are authored by debt-collection Solicitors, are
formally worded in legalese and contain an explicit threat of Court action, they
have a good success rate - with many debtors paying what they owe on receipt
of a letter. 
Note - letters before action are used in instances where the debtor is a
business. If the debtor is an individual, you will need to issue a pre-action
protocol letter instead.

What should a letter before action contain?
For an undisputed debt it should include:
● The name and address of the creditor. 
● The name and address of the debtor.
● The total amount owed.
● A reasonable time limit for the debtor to reply.
● A clear statement that legal action will be taken should the debt not be settled.
At this point, many businesses assume that the creation of a letter before action
is relatively straightforward and something they could do themselves.
The reality is very different!
It’s imperative that letters before action are written and issued by experienced
solicitors. The reasons why are covered in the next section of this article. 

Why you should use a Solicitor to write and issue
a letter before action
The point that letters before action aren’t considered to be formal court pleadings
leads many people to think they can write and issue one without the aid of a
Solicitor. However, as the points below make clear, this is an inadvisable course
of action:
● Should the creditor take legal action and move to court proceedings, any
errors or mistakes in the letter before action can cause major issues.
● The wording of a letter before action is acutely important:
○ For example, any inconsistencies between the LBA and what is claimed in
Court can significantly undermine the creditor’s position and claim.
○ It is easy for an inexperienced person to inadvertently provide the debtor with
ammunition to use against them in court (e.g. a poorly-worded LBA can be
interpreted as making a threat of blackmail or other type of threat).
● The majority of debt collection Solicitors charge highly competitive rates for
writing and issuing letters before action. So, it makes sense to entrust this job to

an experienced, qualified professional.
As you can see, it’s more than worth instructing a qualified debt collection
agency - such as Thomas Higgins Limited, Solicitors - to issue a letter before
action on your behalf. 

Is a letter before action a legal requirement?  
If you wish to pursue an outstanding commercial debt via Court action then it is
imperative that you send a letter before action.
This is because the Civil Procedure Rules (CPR) 1998 state that any claimant
must send a letter before action to the defendant, detailing the basis of their
claim. Where a debt is substantially disputed a Claimant may need to provide
additional information.
Should you fail to send a letter before action before initiating Court proceedings
against a debtor, you may face negative consequences from the Court (e.g.
being awarded less money than you are entitled).
It’s also worth remembering that - in many instances - a letter before action will
spur the debtor to pay the outstanding debt, meaning you don’t have to take the
matter to Court
What can you do if a debtor ignores a letter before
Picture the following scenario; your business is owed several thousand pounds
by another business and the debt is undisputed.
Your accounts team has been chasing the company for payment for weeks.
Reminder letters, phone calls, emails and even a knock at their door, have all
gone unanswered.
So, you’ve taken the next logical step - instructed a debt collection firm like
Thomas Higgins Limited, Solicitors to issue the company with a letter before
You’ve clearly set out a concise amount owed for the claim. You’ve also had the
courtesy of giving the company seven days to respond and settle the debt.
But, again, you’ve been met with silence…
What do you do next?
In such a situation, the next step is to initiate a legal claim for the outstanding
debt with the county court. As with the issuance of a letter before action, you

should instruct an appropriately qualified Solicitor to initiate a legal claim.
Here at Thomas Higgins Limited, Solicitors, we use the Civil National Business
Centre  - with legal claims to debtors based in England and Wales being
electronically sent for issue the next day. 
The next steps will then be taken: 
● A County Court Claim form will be sent to the debtor requesting that they settle
the debt, plus any interest or costs within 14 days of the date of service. 
● If the debtor does not pay within this timeframe the debtor is deemed to be in
● Following this a County Court Judgment (CCJ) can be obtained, and
enforcement proceedings can begin
Can a letter before action be used to claim
compensation or interest?
In addition to recovering the original debt, many businesses also seek
compensation and/or interest from their creditors. 
However, it’s important to note that a letter before action is not suitable for
this purpose. 
If your business wishes to claim compensation from a debtor (or charge interest
on the outstanding debt), then you will need to send a late payment demand
(LPD) letter. 
As with letters before action, late payment demand letters should be written and
issued by a suitably qualified and experienced Solicitor.
How to issue a letter before action
If you want to send a letter before action, then do so via an experienced debt
recovery firm of solicitors.
Here at Thomas Higgins Limited, Solicitors we specialise in undisputed
commercial debt collection and offer competitive rates on letters before action.
What’s more, we put you in control over the process with our Debt Collection
Website & App. The App is available on both Apple and Android devices, the
Debt Collection App allows you to manage and monitor your cases and receive
up-to-date information. 
Find out more about Thomas Higgins Limited, Solicitors’ letter before action
service now