What to do if you receive a Letter Before Claim
Categories: NewsWe often receive calls from worried business owners who have received a Letter Before Claim, also known as a Letter Before Action.
Sometimes this letter has dropped through the door completely unexpectedly and the recipient does not know what to do next.
Firstly, it’s important not to panic. A Letter Before Claim is usually the first formal step of commercial litigation and issues can often be resolved quickly. You should, however, treat it seriously as how you respond can impact the outcome of the dispute.
What is a Letter Before Claim?
A Letter Before Claim is issued by a party with a grievance and sets out the nature and legal basis of the claim – and what the claimant is seeking in compensation or resolution.
These initial formal notices are used in cases involving debt claims, alleged breaches of contract, or property damage before initiating court proceedings.
It is usually part of the Pre-Action Protocols set by the Civil Procedure Rules (CPR) in England and Wales. These protocols encourage parties to try to resolve their issues early before court proceedings.
The CPR says this pre-action period should promote openness, transparency and early communication between parties.
There are different pre-action protocols depending on the type of dispute. Failure to adhere to the relevant protocols may have consequences down the line, including cost sanctions or other orders from the court.
For this reason, it’s important to seek legal advice to determine the exact nature of your case – and what steps are required.
Key steps if you receive a Letter Before Claim:
1. Don’t ignore it
Ignoring the letter can escalate the dispute unnecessarily and heighten frustrations. A lack of action may also harm your position in court as there is an expectation for both parties to engage in early resolutions efforts.
2. Seek legal advice immediately
Even if it’s a seemingly simple dispute, speak to a commercial litigation solicitor as soon as possible. An experienced lawyer will quickly assess the strength of the claim, advise on options and draft a response that protects your interests.
3. Preserve key documents
Ensure all relevant documents are safely stored, including contracts, emails and records. Both parties are required to share certain information and documents during the pre-action stage. Losing key evidence could seriously undermine your defence.
4. Consider Alternative Dispute Resolution (ADR)
Most commercial disputes can be resolved without costly, time-consuming court action. Always be open to mediation, negotiation or arbitration as a quicker solution – even if you do not believe you are in the wrong.
5. Respond within the stated timeframe
A Letter of Claim will usually give a 14 to 28 day window in which to respond. Missed deadlines can weaken your position, so work with your solicitor to stay within timeframes.
Receiving a Letter Before Claim does not necessarily mean litigation will follow. It does, however, require a professional, thought-out response to ensure disputes are resolved with the minimum fuss and, ultimately, the minimum expense.
At ORJ, we have experience of litigation at all levels, from disputes between small businesses to multi-million pound, international cases. Get in touch today to see how we can help or call 01785 223440 to speak to the team.