Why Send a Letter Before Action?

A Letter Before Action is the bridge between informal chasing and formal legal proceedings. It shows you’re serious, but still gives the debtor a fair chance to pay or explain any issues. Most people settle at this stage, especially when the letter is clear, reasonable, and follows the right process.

You should use this template if:

• Your polite reminder hasn’t worked, and the debt is still outstanding.

• The debtor is an individual or sole trader (the Protocol applies).

• You want to resolve any disputes or agree a payment plan before going to court.

• The debtor is a limited company—use a similar letter, but the Protocol may not apply.

Copy-and-Paste Template

Here’s a template you can use straight away. Fill in the blanks and send by post or email, keeping copies of everything.

Subject: Letter Before Action – £[amount] owed for [invoice(s)/contract]

Dear [Name/Business name],

This is a formal Letter Before Action regarding a debt of £[amount] owed to [Your Company] under [invoice/contract] dated [date]. The sum remains unpaid despite reminders.

Amount claimed (as at today)
- Principal: £[amount]
- Interest (if applicable): £[amount] under s.69 County Courts Act 1984 at [rate]% per annum from [date] to [date]
- Total: £[amount]

What you need to do
- Pay the Total within 30 days of the date of this letter; or
- Complete and return the Reply Form indicating any dispute; and
- Provide a completed financial statement if you seek time to pay.

Enclosures (if Protocol applies)
- Information Sheet
- Reply Form
- Standard Financial Statement (blank)

If I do not receive payment or a completed Reply Form within 30 days, I may start a county court claim without further notice. This could add court fees, fixed costs and further interest.

Please send any dispute details or documents you rely on in your reply.

Yours faithfully,  
[Your name]  
[Role / Company]  
[Address / Email / Phone]

How to Make Your LBA Effective

The key to a successful Letter Before Action is clarity and compliance. Give the debtor 30 days to respond—this is a legal requirement for individuals and sole traders. Attach all necessary forms if the Protocol applies, and keep proof of posting or emailing. If your contract sets an interest rate, use it; otherwise, you can claim simple interest under s.69 County Courts Act 1984 (up to 8% per year).

Example:
You run a small cleaning business and a customer owes you £450 for services provided. After a friendly reminder, there’s still no payment. You send the LBA with all enclosures. The customer replies, explaining they’re struggling financially, and proposes to pay £100 per month. You agree in writing, and the debt is settled without going to court.

Details to Consider

• Interest: If your contract includes an interest rate for late payment, use it. If not, s.69 County Courts Act 1984 allows you to claim simple interest (up to 8% per annum).

• Enclosures: For individuals and sole traders, include the Information Sheet, Reply Form, and a blank Standard Financial Statement. These help the debtor understand their options and respond properly.

• Proof: Always keep copies of your letter and enclosures, plus proof of posting or emailing. This is vital if you need to show the court you followed the correct process.

• Documents: If the debtor asks for documents (like invoices, contracts, or delivery notes), send what’s reasonably requested. This can help resolve disputes early.

Common Pitfalls

• Not using the Protocol: If you’re chasing an individual or sole trader, you must follow the Pre-Action Protocol. Missing this step can delay your claim or even cause it to be struck out.

• Giving less than 30 days: The debtor must have a full 30 days to respond. Anything less risks your claim being challenged.

• Unclear totals or interest: Make sure your letter sets out the principal, interest, and total claimed. If you’re unsure about interest, stick to what’s in your contract or use s.69 CCA 1984.

What Happens Next?

If the debtor pays or you agree a realistic payment plan, confirm everything in writing and keep records. If there’s no reply or the debtor refuses to pay, you’re ready to prepare your claim form (N1) and Particulars of Claim. Some online tools, like Garfield, can help generate and send these documents to the court.

Example:
A freelance graphic designer sends an LBA for £1,200. The client responds with a dispute about the work. The designer provides supporting documents, and the client pays after clarification. If the client hadn’t replied, the designer would have moved to issue a claim.

Relatable Scenarios

• Small Business Invoice: You run a local bakery and a café owes you for a regular order. After reminders, you send the LBA. The café owner calls to discuss a payment plan, and you agree to monthly instalments.

• Personal Loan: You lent £500 to a friend for car repairs. After a friendly chase, you send the LBA. Your friend replies, explaining their situation, and you agree a new repayment schedule.

• Trade Services: A plumber completes work for a landlord, but the invoice goes unpaid. The LBA prompts the landlord to pay in full within the 30-day window.

Why This Approach Works

A formal Letter Before Action shows you’re organised and serious, but still fair. It gives the debtor a final chance to pay or explain, and sets out the consequences of ignoring the debt. Most people settle at this stage, especially when the process is clear and reasonable.

If you do need to go to court, having a record of your LBA and all enclosures will help your case. It shows you’ve followed the correct steps and given every opportunity to resolve the matter.

Caira: Your Debt Recovery Companion

Caira is backed by tens of thousands of legal documents and updated weekly, making it a reliable source for practical, up-to-date information. Unlike generic websites or chatbots, Caira’s responses are grounded in real cases and current law, so you can feel confident navigating debt recovery yourself.

Disclaimer:
This article provides general information for England and Wales only. It’s not legal advice. If you have a specific situation or want feedback on your draft letter, you can upload it to Caira for instant, practical suggestions.

By sending a clear, compliant Letter Before Action, you give yourself the best chance of resolving debts quickly and fairly. If you need to take things further, you’ll have a solid foundation and a clean record of your efforts.