What is a letter before action

What a letter before action is

A letter before action is the last piece of correspondence before a court claim, naming the parties, stating what is owed or complained of and giving a date for a response.

The phrase appears in none of the pre-action protocols of England and Wales, nor in the Practice Direction covering disputes with no protocol. Those rules say Letter of Claim, and judicial review says letter before claim.

That matters for the deadline, which the governing protocol sets rather than the label.

What the letter must contain

Where no approved protocol applies, the Practice Direction on Pre-Action Conduct expects concise details of the claim, meaning the basis on which it is made, a summary of the facts, what the claimant wants and how any money figure is calculated.

Debt claims against an individual or a sole trader are stricter. The Debt Claims Protocol requires the amount of the debt, whether interest or charges are still running, the details of the agreement and of any assignment, why an instalment offer has been refused, how the debt can be paid, and the address for the Reply Form.

Three enclosures go with it, and a letter sent without them is not compliant:

• The Information Sheet and Reply Form at Annex 1 of the protocol
• A Financial Statement form for the debtor to complete
• An up to date statement of account, or the interest and charges added since the last one

The Letter of Claim is dated near the top of the first page and posted the same day or the next, with email in addition to post, not instead of it. Knowingly making a false statement in a pre-action protocol letter can bring contempt of court proceedings.

Where interest is claimed, the rate on a non-commercial debt is usually 8%, while a late commercial payment between businesses carries 8% plus the Bank of England base rate and a fixed recovery charge of £40, £70 or £100 by size of debt.

Response times by pre-action protocol

Dispute	What the rules call the letter	Time the other side gets	Rule
No approved protocol applies	Concise details of the claim	14 days in a straightforward case, up to 3 months in a very complex one	PD Pre-Action Conduct, para 6(b)
Debt owed by an individual or sole trader	Letter of Claim	30 days from the date at the top of the letter	Debt Protocol, para 3.4
Personal injury	Letter of Claim	21 days to identify the insurer, then up to 3 months from acknowledgment to investigate, extended to 42 days and 6 months where the accident or the defendant is outside England and Wales	Injury Protocol, paras 6.2 to 6.4
Professional negligence	Letter of Claim	21 days to acknowledge, then 3 months from the Letter of Acknowledgment	Negligence Protocol, paras 7.1 and 8.2
Construction and engineering	Letter of claim	14 days to acknowledge, response within 28 days of receipt	Construction Protocol, paras 8.1 and 8.5
Judicial review	Letter before claim	14 days, using the standard format at Annex B	Judicial Review Protocol, para 20

The 30-day rule for debts owed by individuals

A creditor chasing an individual on a 14-day template has under-complied by 16 days. Only 30 days of silence from the date at the top of the letter opens the door to a claim, and even then account is taken of a reply posted near the end of the period.

A reply restarts the clock. Where the debtor returns the completed Reply Form, proceedings should not begin for another 30 days from receipt, or 30 days from the day requested documents are supplied, whichever falls later. A document request carries its own 30 days for the creditor to answer.

Even a partly completed Reply Form counts as an attempt to engage. Where discussion ends without agreement, at least 14 days notice of the intention to issue is required, unless a limitation date is about to pass. A broken repayment arrangement starts the sequence again with an updated Letter of Claim, though documents sent in the preceding 6 months need not go twice.

Breathing Space and the 60-day moratorium

Breathing Space gives a debtor in England and Wales protection from creditors for up to 60 days, or the length of treatment plus 30 days for someone in mental health crisis treatment. Interest, charges and enforcement all stop.

The correspondence itself is caught. Contacting a debtor for the purpose of enforcing a moratorium debt is one of the prohibited steps under regulation 7, alongside starting proceedings over non-payment and applying for default judgment, and anything done contrary to that regulation is null and void. A limitation period that would otherwise expire within 8 weeks of the moratorium ending expires 8 weeks after it ends instead.

Sanctions and court fees when the letter is ignored

The court can find a failure of compliance where a party gave insufficient information, missed a time limit or unreasonably refused to mediate. The sanctions for non-compliance run to costs against the party at fault, indemnity-basis costs, loss of interest for a claimant, and interest against a defendant at up to 10% above base rate.

The letter then becomes a claim form, and the claimant pays to issue it. Court fees go by value, and a disputed claim of £10,000 or less carries a compulsory free mediation appointment of up to one hour.

Amount claimed	Court fee
Up to £300	£35
£300.01 to £500	£50
£500.01 to £1,000	£70
£1,000.01 to £1,500	£80
£1,500.01 to £3,000	£115
£3,000.01 to £5,000	£205
£5,000.01 to £10,000	£455
£10,000.01 to £200,000	5% of the claim
More than £200,000	£10,000

A defence is due 14 days after service of the particulars of claim, or 28 days where an acknowledgment of service is filed first. A judgment then stays on the Register of Judgments, Orders and Fines for 6 years unless the amount is paid within one month.

Recovering the cost of the letter on the small claims track

The small claims track is the normal track for claims of not more than £10,000, with the fast track at £25,000 and the intermediate track at £100,000.

On that track the court may not order one party to pay another’s costs beyond the fixed costs of issuing, court fees, travel expenses, capped loss of earnings and capped expert fees. The caps are £260 for legal advice in a claim including an injunction or specific performance, £95 per day per person for loss of earnings, and £750 for each expert.

So the drafting fee on a small debt comes out of the recovery rather than off the other side. Firms offering business debt recovery up to £100,000 publish their charges under the SRA Transparency Rules, which is how Nelsons comes to print £150 plus VAT and 7% of sums up to £25,000 on the Nottingham list, while work outside a fixed fee runs at ordinary hourly rates.

Whether that fee can be added to the claim is one of the questions worth putting to a firm before the letter goes out.

Employment tribunals, judicial review and time bars

An employment tribunal claim starts somewhere else. Acas must be notified before a claim can be made, early conciliation is offered at that point, and a failure to try to resolve the dispute can affect the compensation awarded.

Judicial review keeps its own letter and its own clock. The protocol does not touch the requirement to file the claim form within 3 months of the grounds arising, 6 weeks for certain planning claims and 30 days for certain procurement claims.

No protocol moves a statutory time limit. A simple contract action in England and Wales cannot be brought more than 6 years after the cause of action accrued, and a personal injury action more than 3 years from the injury or the date of knowledge. Where proceedings are issued to beat a limitation date, the parties apply for a stay while they comply.

Letters before action in Scotland and Northern Ireland

Scotland

There are no Civil Procedure Rules in Scotland, so no Practice Direction on Pre-Action Conduct and no Debt Claims Protocol. Sheriff court procedure is made by Act of Sederunt, and the one compulsory pre-action protocol is the personal injury protocol, Appendix 4 to the Ordinary Cause Rules since 28 November 2016.

Its opening document is a Claim Form rather than a letter. The defender acknowledges it within 21 days of receipt and has a maximum of 3 months from that receipt to investigate and say whether liability is admitted. It applies only where the claim is reasonably estimated at £25,000 or less and the claimant has a solicitor.

Money claims run through simple procedure below £5,000 and ordinary cause above that. Time bars come from prescription rather than limitation and are shorter, with contractual obligations extinguished after 5 years and personal injury actions raised within 3 years.

Breathing Space is England and Wales only. In Scotland a debtor gives notice to the Accountant in Bankruptcy, and a moratorium on diligence runs for 6 months, during which it is not competent to serve a charge for payment or to execute diligence. The regulator is the Law Society of Scotland, and service complaints go to the Scottish Legal Complaints Commission.

Northern Ireland

Northern Ireland does not use the Civil Procedure Rules either, so the Practice Direction, the Debt Claims Protocol and the 30-day rule have no application there. County court procedure comes from the County Court Rules (Northern Ireland) 1981 and High Court procedure from the Rules of the Court of Judicature (Northern Ireland) 1980.

A small claim is one worth not more than £5,000, decided informally by the County Court, excluding claims such as personal injury, road traffic accidents, libel or slander and title to land. Above that the claimant abandons the excess or issues a civil bill for a full hearing up to £30,000, and the result is a Decree or Order counting as a County Court Judgment.

Enforcement changes what the letter is worth. The court does not enforce a judgment in Northern Ireland, the Enforcement of Judgments Office does, for further fees. That office will also search for a person or firm for a small fee before a claim is started, showing any enforced judgments against them in the last 6 years.

nidirect sets out what a debt letter should say, including a payment date at least 7 days ahead and a request that any dispute goes in writing. Under the Limitation (Northern Ireland) Order 1989 the time bars are 6 years for simple contract and 3 years for personal injury, and the regulator is the Law Society of Northern Ireland.