Call Us TODAY on 020 3588 4240

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.

Summing-up

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.

You can reach us |
By Phone | 0845 890 9200
Website | www.shergroup.com and you can chat to us from here
Email | [email protected]
Facebook | Check out Shergroup on this channel and message us
Twitter | Check out ShergroupChat on this channel and message us
LINKEDIN | Check out Shergroup’s LINKEDIN feed – and please FOLLOW us!
Instagram | Check out ShergroupChatter and follow us!

You Might Also Like

Content Writer​

DISCLAIMER NOTICE |

The following disclaimer applies to Shergroup Limited and its platform, shergroup.com. Please read this notice carefully before accessing or using any information provided on our platform.

  1. No Legal Advice | The information presented on shergroup.com, including but not limited to articles, blog posts, FAQs, and other resources, is provided for general informational purposes only. It is not intended to be, and should not be considered, legal advice. The information provided does not create a solicitor/client relationship between Shergroup Limited and the user.
  2. Not a Substitute for Legal Advice | The information on shergroup.com should not be relied upon as a substitute for obtaining legal advice from a qualified professional. The application of laws and regulations can vary based on specific circumstances, and legal advice tailored to your particular situation is crucial. Therefore, we may refer you to a member of our partner firm -Shergroup Legal – on legal matters or encourage you to take your own legal advice from your preferred advisor.
  3. No Guarantee of Accuracy | While we strive to provide accurate and up-to-date information, Shergroup Limited does not guarantee the accuracy, completeness, or reliability of any information on shergroup.com. The legal landscape is constantly evolving, and laws may vary across jurisdictions. Therefore, any reliance you place on the information provided is at your own risk.
  4. No Liability | Shergroup Limited, including its officers, employees, agents, and affiliates, shall not be held liable for any direct, indirect, incidental, consequential, or punitive damages arising out of your access to or use of shergroup.com or any information contained therein. This includes, but is not limited to, any errors or omissions in the content, or any actions taken or not taken based on the information provided.
  5. Third-Party Links | Shergroup.com may contain links to third-party websites or resources. These links are provided solely for convenience and do not imply endorsement or responsibility for the content, accuracy, or legality of such websites or resources. Shergroup Limited shall not be liable for any damages or losses incurred as a result of accessing or using any third-party websites or resources.
  6. Changes to Disclaimer | Shergroup Limited reserves the right to modify or amend this disclaimer notice at any time without prior notice. Any changes will be effective immediately upon posting on shergroup.com. It is your responsibility to review this notice periodically for updates.

By accessing or using shergroup.com, you acknowledge that you have read, understood, and agreed to this disclaimer notice. If you do not agree with any part of this notice, you should refrain from accessing or using shergroup.com.

Last updated | 19 July 2023

Should you have any questions or concerns regarding this disclaimer notice, please contact us at [email protected]