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Recovering unpaid debts successfully is important for any business. When people or businesses fail to pay you back what they owe you, it can disrupt your cash flow and make running your business more stressful. Many businesses, on the other hand, struggle with debt recovery on their own. It can be tough to strike a favourable balance between managing business connections and tracking down late and non-payments.

Debt collection solution

Therefore, Shergroup provides a commercial debt collection solution that takes care of all the burden while allowing you to concentrate on other critical business problems. We work with businesses and organisations of all sizes to successfully recover debts owed to them, and our experience in this field ensures that our customers have a high chance of success every time.

If a payment is missed without prior arrangements, your company is within its rights to begin the debt collection procedure. If you need to take legal action against the other party later, there is a legal process that must be followed for debt collection, and a letter before action is typically all that is required before the debtor chooses to pay what they owe.

What is a Letter Before a Claim?

A letter before claim (also known as a letter before action) is a formal letter that requests the payment of a debt to your business and warns of the imminent issue of a court claim. The letter before action is part of the pre-action protocols that are required in England and Wales to ensure the debtor is given a reasonable amount of time to pay what they owe before the matter is taken further. It is issued by the debt recovery team to demand the payment from the debtor within the next 14 days for limited companies and 30 days for individuals. These deadlines ensure that we follow the Debt Claims Pre-Action Protocols. If the debt is not paid within this time frame, the letter warns that legal action will be taken. The same is true if you receive no answer to your letter before taking any action.

Why Do I Need to Write a Letter Before Claim?

The court will expect the parties to have followed an appropriate pre-action protocol or this Practice Direction if a disagreement goes to trial. When granting directions for the management of proceedings (see CPR 3.1(4) to (6)) and making costs orders (see CPR 44.3(5)(a)), the court will take non-compliance into account. The court will evaluate whether all parties have complied in substance with the conditions of the applicable pre-action protocol or this Practice Direction, and small or technical infringements are unlikely to be a problem, especially when the issue is urgent (for example an application for an injunction).

What are the procedures for preparing for an action?

Pre-action guidelines control the parties’ conduct and the actions that should be done before filing a claim. Non-compliance with UK litigation pre-action protocols could result in a party being fined by the court.

Before any legal action may be taken, the parties must reasonably exchange necessary information and documents. The goal is to avoid the necessity for legal action by supporting alternative dispute settlements.

What if there is no relevant pre-action protocol to follow?

Where an appropriate pre-action protocol exists, the parties must follow it before proceeding with the case. If no applicable pre-action protocol exists, the parties should exchange communication and information to meet the goals, keeping in mind that compliance must be proportionate. Typically, the steps will include: —

(a) the claimant sends a letter to the defendant outlining the claim in full. The foundation for the claim, a statement of the facts, what the claimant seeks from the defendant, and, if money is involved, how the amount is calculated should all be included in the letter.

(b) The defendant must answer within a reasonable amount of time – 14 days in a simple case and no more than 3 months in a complicated one. The response should include confirmation of whether the claim is accepted and, if not, why, as well as an explanation of which facts and elements of the claim are disputed, as well as whether the defendant is bringing a counterclaim and details of any counterclaim; and

(c) the parties disclosing key documents relevant to the issues in dispute.

What do I Write in a Letter Before Claim?

A claimant might consider sending a Letter of Claim to the respondent before starting legal proceedings.

While each claim will require different information, in general, the letter before claim should include the following information:

  • your name and address.
  • concise detail of the claim.
  • summary of the facts.
  • if the claimant is seeking to recover debt, then they should list all these debts.
  • a reasonable time limit for the defendant to reply, usually 14 days.
  • a clear statement that you will initiate court proceedings if you do not receive a reply.

What are the benefits of sending a letter before an action debt claim?

Sending an unpaid invoice letter before taking action can be a very effective approach to get the debt paid without having to take any other steps. This form of letter conveys that you are serious about the situation, which may be enough to persuade the debtor to pay in full.

If you follow the letter before action procedure, you will have already completed the required protocol and will be able to move on to the next stage of the commercial debt recovery process if you need to take the matter further and apply to the Court for a judgment on the debt. Businesses who attempt to take legal action without first following the required protocol with the letter before action will have to wait until these actions have been completed before taking additional steps to recover what they are owed.


Often clients ask us if they draft their letter before claim and send it to the debtor themselves as a part of their pre-action protocol guidelines.

However, our years of experience at Shergroup has shown us that in many circumstances, debtors take a letter from a debt recovery team more seriously than a letter from the company to which they owe money. Previous debt collection action we’ve done on behalf of customers has shown that when another business receives a letter from a debt recovery team before taking action, they’re more likely to pay the debt.

By entrusting Shergroup with your commercial debt recovery process from beginning to end, you can detach yourself and your company from the letter before action and any subsequent legal action or communications that may be required, allowing you to maintain better business relationships while avoiding the stress and hassle of handling this task in-house.

For more information about how we can help you with a letter before action, debt enforcement or the entire debt recovery process for your business, get in touch with one of our friendly business solutions advisors today.

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Last updated | 19 July 2023

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