A letter before action is a serious step. Sent correctly, it puts the debtor on notice of the claim and the consequences of continued non-payment. Sent carelessly, it can weaken a position, invite an opportunistic dispute or attract criticism on costs.
The correct form depends on who the debtor is. Not every pre-action letter about a business debt is a Letter of Claim under the Pre-Action Protocol for Debt Claims, and treating them as interchangeable is a common and avoidable error.
Commercial letter before action
For ordinary company-to-company disputes, the general requirements of the Practice Direction on Pre-Action Conduct and Protocols are usually the relevant framework. The letter sets out the claim, the basis for it, the documents relied on and a reasonable period to respond.
Letter of Claim under the Debt Claims Protocol
Where a business claims payment from an individual, including a sole trader, the Pre-Action Protocol for Debt Claims can apply. Prescribed information and accompanying forms may be required, and the 30-day response period is significant.
Why the distinction matters
Sending a protocol-form Letter of Claim to a limited company, or an informal demand where the protocol applies, can cause delay, costs consequences or a stayed claim. The debtor type is confirmed before the letter is drafted.
What the letter should contain
The correct parties, the sum claimed and how it is calculated, interest and any compensation relied on, the documents supporting the claim, what is required and by when, and what is proposed if there is no response.
Common questions
- How long should a debtor be given to respond?
- It depends on the framework and the facts. Where the Pre-Action Protocol for Debt Claims applies, a 30-day response period is significant. In ordinary commercial matters a reasonable period is assessed case by case. We do not apply a fixed deadline to every debtor.
- Does a letter before action commit us to litigation?
- It should never be sent as an empty threat, but the decision to issue proceedings remains yours and is taken on advice once the response, or absence of one, is assessed.
This page is general information about our services and does not constitute legal advice. Every matter is assessed on its own facts and contractual documentation.