Letter Before Action
If you are owed money and you are having difficulty obtaining payment, a letter before action will warn the debtor that you are considering initiating legal proceedings.
As a business owner, ensuring that debts are collected promptly is crucial to avoid cashflow problems. It can sometimes be harder to collect debts if time elapses. Taking immediate action once payments are due means that you will stay on top of the situation and avoid debts accruing.
It is often the case that a letter before action, sent by a debt recovery solicitor, is all that is needed to push a debtor into paying. At Isadore Goldman, we specialise in helping businesses financially. We can draft a robust and legally sound letter before action clearly notifying your debtor that the money owed must be cleared or further steps will be taken.
You need to ensure that you follow the correct procedure in dealing with debt recovery and that any correspondence is correctly drafted. Errors can inadvertently make it harder for you to carry out the recovery process and could potentially have negative cost implications.
We can advise you of your rights and take steps to recover your debt in the simplest way possible. We provide a full service, including:
- Advice on collecting your debt
- Drafting a letter before action
- Dealing with any response to the letter before action
- Considering alternative dispute resolution
- Court action
For more information on our services, see letter before action.
For immediate, expert advice on letters before action, you can contact your local Isadore Goldman office in London, Norwich or Portsmouth, or email info@isadoregoldman.com.
Why choose Isadore Goldman for letters before action?
Specialist debt recovery solicitors with genuine expertise
At Isadore Goldman, we specialise in assisting businesses with all types of financial issues, including debt recovery and dispute resolution. Because we deal exclusively with this niche and complex area of law, we have exceptional expertise.
We hold specialist accreditation in business financial matters and are recommended by legal directories Chambers & Partners and the Legal 500, with Chambers & Partners noting that we are ”one of the leading UK firms in this sector.”
Clear and actionable legal advice
We always cut straight to the heart of the issue, providing bespoke advice intended to secure the right outcome without delay. We will make sure that you have the information you need and that you understand what needs to happen next. We are easy to contact and are always happy to talk through issues and answer any questions as needed.
Bespoke recommendations to achieve your objectives
We will work to understand what you and your business may require and provide tailored advice to achieve this. Where there are different options open to you, we will explain them, ensuring that you understand the implications and potential advantages of each.
Robust action
Debt recovery needs decisive action and we will take the necessary steps to secure the prompt payment of money owed to you or your business. We have a proven track record of success in collecting debts, both out of court and by obtaining a court order.
Advice on collecting your debt
If you or your business is owed money, we will work with you to ensure that the right information has been provided to the debtor, giving them the chance to settle the outstanding sum.
Before sending a letter before action, you should have followed your internal debt collection processes, sending copy invoices, reminding the debtor of the agreed payment terms and giving them a deadline for payment.
Drafting a letter before action
A letter before action, sometimes referred to as a letter before claim or a pre-action letter, is a formal notification to an individual or business that you intend to start legal proceedings if your request is not met.
It is often advantageous to arrange for a solicitor’s letter before action to be sent on your behalf, rather than sending it yourself, as this will demonstrate to the debtor that you are taking the issue seriously and that you have a legal expert helping you to recover the money owed. Debtors are generally more likely to take steps to repay a debt when a solicitor is involved.
The courts expect that those commencing legal action will have previously tried to resolve matters using other means and that a debtor has been given adequate notification and the chance to pay. Sending a letter before action or letter before claim is part of this process.
It is crucial that a letter before action contains certain information. If anything is omitted, it could cause difficulties later if court action is necessary.
If you ask us to represent you, we will check the facts to be included and draft a comprehensive letter before claim.
Information that should be contained in the letter of claim includes:
- The full name and address of the creditor, which could be you or your business, together with contact details
- The debtor’s full name and address
- Details of the amount of the debt, to include any interest and penalties you are entitled to claim under the terms of your contract
- Details of when the debt became due and what contract terms have been breached
- Copies of relevant documents, including a copy of the contract, copies of correspondence and copy invoices. You can also include a reply form for the debtor to use when responding
- A clear demand for payment, including details of the way in which this should be paid
- The deadline by which you require a response which must be at least 14 days for a business and 30 days for an individual. It may be reasonable to allow a longer deadline of up to three months for larger or more complicated debts
- Notification that it is your intention to bring legal action if the claim is not settled
- Notification of interest that is being charged or that will be charged on the outstanding sum
Dealing with any response to the letter before action debt claim
The debtor may request further information and we can deal with this request to ensure they have all the details they need.
They may want to negotiate payment by instalments and we can discuss this with you and enter into negotiations on your behalf where appropriate.
If you receive no response to a letter before action, we can initiate legal proceedings.
Considering alternative dispute resolution
In some cases, alternative dispute resolution may be helpful. For example, the debtor may dispute the debt or some part of it or they may wish to try and agree on new payment terms.
We can discuss the options, such as mediation or arbitration. If you ultimately commence legal proceedings, the courts will expect efforts to have been made to resolve matters out of court. Failure to do so could mean that a costs order might not favour the party who failed to make reasonable attempts to settle.
Alternative dispute resolution also has the benefit of potentially salvaging your relationship with the debtor, which may be an advantage if they are offering something your business particularly needs and would struggle to find elsewhere.
Court action
If no progress is made and the debt remains outstanding or there are some issues that cannot be resolved out of court, we can start a court claim.
We will ensure that you have the strongest possible case and that the correct procedure is followed in initiating proceedings, including sending a pre action protocol letter where this is required.
We will take into account the debtor’s position, for example, whether they appear able to pay their debts, and our advice to you will be tailored accordingly. We will give you an honest assessment of your position and the best options available to you. This includes commercial consdierations.
It is generally possible to ask for interest on the unpaid amount as well as payment of your costs in bringing the claim.
We also deal with enforcement if you obtain a court order in your favour, but the other party fails to meet its terms.
Factsheets
Freezing Orders and Injunctions
Contact our expert letter before action solicitors
For clear and pragmatic advice on letters before action, contact our team today. You can get in touch at one of our offices in Norwich, Portsmouth or London, or email info@isadoregoldman.com.