What Is a Letter Before Action?
Letter Before Action
The last formal step before court: what it must say, how long to wait, and why it recovers so many debts on its own.
- What Is a Letter Before Action?
- A letter before action, also called a letter before claim, is a formal letter sent before starting court proceedings. For an unpaid invoice it sets out who is owed what and why, the interest and costs claimed, the date by which payment is required, and that a court claim will be made if the debt is not paid. Courts expect one before a claim is issued.
- A letter before action sets out the debt formally and warns that court proceedings will follow if it is not paid.
- Courts expect one before a claim is issued.
- For an individual or sole trader debtor, the Pre-Action Protocol for Debt Claims applies, with 30 days to reply.
- Many debts are paid on receipt of the letter alone.
After reminders, calls and a firm final request, a letter before action is the point at which chasing becomes formal. It tells the debtor, in writing, exactly what they owe and why, and that you will issue a court claim if they do not pay by a set date. It is also a step the courts expect you to have taken. Handled well, it often ends the matter: a customer who has ignored several reminders frequently pays when they see a claim is coming.
What a letter before action for an unpaid invoice contains
| Section | What to include |
|---|---|
| Heading | "Letter before action" or "Letter of claim" |
| Parties | Your name or business name and address; the debtor's correct legal name and address |
| The debt | What was supplied, when, the invoice numbers, dates and amounts, the due dates |
| Payments and credits | Anything already paid or credited |
| Interest and compensation | Statutory interest and fixed compensation claimed, with how they were calculated |
| Total | The amount now owed, and the daily interest continuing |
| Deadline | The date by which payment must be made |
| Next step | That you will start court proceedings without further notice if not paid |
| Enclosures | Copies of the invoices; for individual debtors, the protocol's information sheet and reply form |
Time to allow before issuing a claim
- Company debtorabout 14 days
- Individual or sole trader debtor30 days
This Protocol applies to any business (including sole traders and public bodies) claiming payment of a debt from an individual (including a sole trader).
Individual and sole trader debtors: the debt protocol
If your customer is an individual, including a sole trader, the Pre-Action Protocol for Debt Claims applies. It sets out what the letter of claim must contain and the documents to include: an information sheet and a reply form that let the debtor admit the debt, dispute it or ask for time. If the debtor does not reply within 30 days of the date at the top of the letter, you may start court proceedings. If they reply asking for more time, for example to get debt advice, the protocol expects you to allow reasonable time. The protocol does not apply to business-to-business debts unless the debtor is a sole trader.
Company debtors: pre-action conduct
For a limited company or another business that is not a sole trader, the general Practice Direction on Pre-Action Conduct applies. It expects the parties to exchange enough information to understand the claim and to try to settle it, and a letter setting out the claim with a reasonable time to respond: usually 14 days in a straightforward case, longer in a complex one.
Adding interest and compensation
For a business customer, include statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998 and the fixed compensation of £40, £70 or £100. Show the working: the invoice amount, the due date, the day interest started, the rate, the days late and the daily figure. The late payment interest calculator gives you each number to state, and the entries on statutory interest and late payment compensation explain the rules.
Tone and accuracy
A letter before action should be firm, factual and polite. Stick to what can be proved: dates, documents, amounts. Avoid threats beyond the step you are genuinely prepared to take, and never threaten anything you cannot lawfully do. Check every figure; a wrong amount gives the debtor a reason to dispute the whole claim. Make sure the debtor's name is exactly right: a sole trader in their own name, with any trading name, or a company by its registered name at its registered office, which you can check on Companies House.
How to send it
Send it by post to the debtor's address, and by email too if you have been corresponding by email. Keep a copy and proof of sending, such as a certificate of posting. The date on the letter starts the reply period, so date it on the day you send it.
What can happen next
| Debtor's response | Your next step |
|---|---|
| Pays in full | Confirm receipt in writing; the matter is closed |
| Offers to pay in instalments | Consider it; if acceptable, agree a written plan with dates |
| Disputes the debt | Review their points and evidence; try to resolve; consider mediation |
| Asks for time for advice (individual) | Allow reasonable time under the protocol |
| Ignores it | After the reply period, consider a court claim |
If you go to court, the letter, the invoices and your record of chasing form the core of your claim. The guide on small claims for an unpaid invoice covers fees and the process in England and Wales.
A worked example
A plumber is owed £2,400 by a letting agency company for work finished in March, with the invoice due on 31 March 2026. After three reminders and a phone call, nothing has been paid by mid-May. The plumber sends a letter before action dated 15 May to the company's registered office and its accounts email: the work, the invoice number and date, £2,400 due on 31 March, statutory interest at 11.75% from 1 April (about £0.77 a day, £34.77 to 15 May), fixed compensation of £70, a total of £2,504.77 with interest continuing daily, payment required by 29 May, and a statement that a court claim will be issued without further notice if it is not paid. The agency pays in full on 27 May.
Why letters before action work
A debtor who has ignored reminders is often gambling that the supplier will give up. A letter before action changes the calculation. It shows the supplier knows the process, has the documents, and is ready to go to court, where the debtor may also have to pay the court fee, interest and fixed compensation. For a company, a county court judgment can affect its credit record and its ability to trade. For many debtors, paying now is plainly cheaper than defending a claim they cannot win, and they pay.
It also clarifies genuine disputes. A customer who has a real complaint about the work is more likely to state it clearly in reply to a formal letter than in reply to another reminder. That gives both sides the chance to settle it before anyone pays a court fee.
Letters before action and mediation
The pre-action rules encourage both sides to consider settling without going to court, and the small claims process in England and Wales now builds in the courts' free mediation service. Mentioning in your letter that you are open to discussing payment, including by instalments, shows the court you acted reasonably and often speeds up payment. If the debtor proposes a plan, agree it in writing with dates, and make clear that the full amount becomes due again if a payment is missed.
Scotland and Northern Ireland
This entry describes the position in England and Wales. Scotland and Northern Ireland have their own court procedures for debt claims, with their own limits and fees, and their own expectations about what happens before a claim. The principle of setting out the claim clearly and giving the debtor a fair chance to pay before going to court applies across the UK.
Keeping the record
Keep the letter, proof of sending, any reply and a note of every call. If the claim goes to court, the court will want to see that you followed the pre-action steps, and your records show it. Keep them with the invoices and correspondence for the debt, for at least as long as your other business records.
Common mistakes
- Sending it too early. Use it after ordinary chasing has failed, not as a first reminder.
- Using the wrong protocol. Individual and sole trader debtors need the debt protocol and 30 days.
- Wrong debtor name. Check the legal name and address.
- Unexplained figures. Show how interest and compensation were calculated.
- Not following through. A letter that threatens a claim you never issue teaches the debtor to ignore you.
- Forgetting the enclosures. Individual debtors must receive the protocol's information sheet and reply form with the letter.
Before you send it
Check four things. The debt is genuinely due: the due date has passed and nothing is outstanding on your side, such as unfinished work or an unanswered complaint. Your documents are in order: the quote or order, the invoice, proof of delivery or completion, and your chasing record. The debtor's details are right. And you are prepared to follow through with a claim if the deadline passes. If any of these is uncertain, fix it first; a letter before action is most effective when every word of it can be backed up.
Related terms and guides
The invoice due date calculator confirms the date the debt fell due, and invoice payment terms explains how that date is set.
The steps leading up to a letter before action are in how to chase an unpaid invoice. For the rights behind the interest and compensation you claim, see charging interest on late payments. If the dispute is about the invoice itself, see invoice disputes first.
A letter before action is the moment a debt stops being a reminder and becomes a claim. Written clearly, with the right figures and the right waiting period, it recovers many debts without a court ever being involved.
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Frequently asked questions
How long must I wait after a letter before action?
If the debtor is an individual, including a sole trader, the Pre-Action Protocol for Debt Claims requires 30 days from the date of the letter for a reply. For a company, a reasonable period is expected, usually 14 days in a straightforward case.
Do I need a solicitor to send a letter before action?
No. You can write and send it yourself. It must be clear, accurate and follow the right protocol for the kind of debtor.
What happens if I skip the letter before action?
The court may take it into account, for example when deciding costs, and may pause the claim for the pre-action steps to be taken.
Sources
Official guidance on GOV.UK.