A "letter before claim," also known as a "letter before action," is a formal letter sent by one party to another, letting them know that court proceedings might happen if the issues between them aren't resolved.
When should you send a letter before claim?
A letter before claim should be sent from the claimant to the defendant before they start legal proceedings.
It should include concise details of the claim, including the basis of the claim, a summary of facts, what's wanted from the defendant, and if money is involved, how the amount is calculated.
Letters before claim come into play in different situations. For example if:
You were in a road traffic accident;
Your business provided services for a customer or client, but payment is outstanding;
You got injured because of a defective product.
What is the purpose of a letter before claim?
A letter before claim aims to foster openness, transparency, and clear, early communications between parties in a dispute.
It is a way to encourage parties to share information about their position, evidence, and legal arguments to fully understand each other's cases.
The idea is that, with the exchanged information, parties can make informed decisions on how to move forward in resolving the dispute and explore alternative dispute resolution methods like mediation or arbitration for a quicker, more cost-effective resolution.
During the pre-action phase, parties are expected to act in good faith, taking reasonable and constructive steps before diving into time-consuming and costly court proceedings.
Why do I need to write a letter before claim?
If a dispute ends up in court, the court expects parties to have followed the relevant pre-action protocols, which may include writing and sending a letter before claim. This is important because the court will use this information when managing the proceedings and deciding on costs.
Specifically, the court considers non-compliance when giving directions for how the case should be managed and when deciding who should pay the costs of legal proceedings.
Therefore, if you're thinking about starting a legal action, writing a letter before claim is an important first step.
What should be included in a letter before claim?
A well-crafted letter before claim should include:
A detailed account of events;
What action you would like the other party to take in response;
The amount of money you are seeking in compensation (including a breakdown of how you arrived at that figure)
A request for the defendant to respond within a specific timeframe.
Your letter may also require other information depending on the type of dispute. For example, if the matter relates to a road traffic accident, you should include the insurance details of the other party if you know them.
If you were injured in an accident that wasn't your fault and you're claiming for personal injury, you should include contact details for your GP and any other medical professionals you've consulted. Furthermore, if you've had to take time off work due to injury, it's also a good idea to mention the amount of time taken off to justify your compensation claim.
What are pre-action protocols?
Pre-action protocols are a set of rules that apply to certain types of claims. Both parties involved in a dispute are expected to follow these rules before starting court proceedings.
Pre-action protocols are commonly used in matters related to:
Personal injury claims;
Construction and engineering disputes;
Professional negligence claims;
Possession of property due to rent arrears;
Possession of residential property due to mortgage arrears.
What should I do if I receive a letter before claim?
If you receive a letter before claim, you shouldn't ignore it as, if you don't respond, the claimant could ask the court to enter a judgment by default against you.
Instead, you should:
Gather all relevant documents you have about the dispute;
Create a timeline of events, including conversations, meetings, phone calls, emails, and any other form of communication;
Notify your insurer, if applicable;
Familiarise yourself with the Civil Procedure Rules and pre-action protocols that apply;
Make a note of the date you need to respond, this is typically 14 days for simple claims and up to three months for more complex cases;
Be cautious with any responses and avoid making any admissions.
You may also consider consulting a solicitor for legal advice. Our expert litigation solicitors would be more than happy to provide their advice and guidance. Get a free case assessment today to find out more.
How to respond to a letter before claim
In your response to a letter of claim you should first and foremost clearly state whether you accept the claim or intend to defend it.
If you disagree with the reasons for the dispute, explain why. Outline the specific parts of the other party's statement that you don't agree with and use evidence to back up your version of events.
If you plan to make a counterclaim, you should include this in your response. Alternatively, if you accept the claim you should propose a settlement. This could involve suggesting a schedule of repayment or offering a lump sum. These types of offers should be marked as 'without prejudice' to control how that offer could be used in the future.
Letters before claim and recovery of pre-action legal costs
As noted, claimants and defendants are encouraged to resolve disputes through pre-action protocols before heading to court.
However, if court proceedings are started, the court may allow the recovery of costs, including those incurred before proceedings started. Cost awards by the courts are discretionary and various factors are considered, including conduct, when deciding on them.
Therefore, to safeguard their positions, parties should get legal advice from a litigation solicitor early on, especially regarding pre-action protocols and costs. Understanding the consequences of starting proceedings or pursuing settlements is important to avoid unnecessary costs. In some cases, a letter before claim may be enough to settle the matter early on.
Get help with a letter of claim from our litigation solicitors
For help and advice relating to litigation, whether you’ve received a letter before claim or are looking to take action against an individual or business, speak to our legal assessment team today for a free case assessment and advice.