Letter of claim - debt recovery

A new pre-action protocol for debt claims came force on 1 October 2017. This will apply to you if you are a business (including sole traders and public bodies) claiming payment from an individual (including a sole trader). The new protocol does not apply to business to business debts unless the debtor is a sole trader. 

For debts covered by the new pre-action protocol the previous ‘letter before action’ has now been replaced by the ‘letter of claim’.  The letter of claim has new and differing requirements from the letter before action.

 

loading staff

Letter of claim requirements

  • Where the debt arose from an oral agreement, the letter of claim will need to include the names of the parties to the agreement, details of what was agreed, when and where
  • Where the debt arose from a written agreement, the letter of claim will need to include the names of the parties to the agreement, date of the agreement and that a copy of the agreement may be requested
  • Where the debt has been assigned, the letter of claim will need to include the details of the original debt, when it was assigned and to whom it was assigned

The letter of claim should also have the following documents attached to it:

  • A statement of account
  • The ‘information sheet’ and ‘reply form’ contained in the protocol
  • The ‘financial statement’ form, for the debtor to complete, as proscribed by the protocol

A letter of claim demands payment from the debtor within 30 days, failing which court action will be commenced. The pre-action protocols which are the court’s guidelines to pre-action conduct provide that if a reply form is received from the debtor within the first 30 days, you will have to wait a further 30 days before commencing court action. 

Failure to comply with the protocol can lead to cost consequences later if a claim is disputed.

Issue a letter of claim

On instructing our specialist debt recovery solicitors to send a letter of claim please contact us to arrange a card payment or alternatively a cheque can be sent. Once payment is made, we will:

  • Check that your debtor is still active on Companies House (if your debtor is a limited company)
  • Calculate any contractual interest payable (arising from your terms and conditions) or statutory/late payment interest and/or compensation from the due date of each invoice
  • Acknowledge your instructions by email to confirm that the letter of claim has been sent together with details of the amount demanded (interest and/or compensation)
  • Contact you after 14 days to check whether payment has been received. If not, we can advise on the next steps

Our debt recovery specialists have developed an online debt recovery instruction form so that you are able to instruct us online. For volume instructions we have a simple and quick instruction form designed to handle any volume of recoveries, please contact us for further details on 0203 816 9303.

4.7out of 10
4.7 score on Trustpilot Based on count 769

We're Great

It is our business to deliver legal services that work for our clients, and you can trust our specialists to take care of things on your behalf.

Our Trustpilot reviews

Employee ownership trusts - the alternative way of selling your business

It can take years of hard work to build a successful business, and so exiting that business can be a very difficult decision for an owner to make. For others who have an exit strategy in place finding a buyer may be difficult, particularly in certain...

Read more

Twitter commercial

@CommercialLLP

Busting myths around cohabitation - cohabitating misconceptions

Cohabiting couples or common law partners have now replaced the traditional married couple as the fastest growing relationship status in the UK. Cohabitees have increased by 25.8% over the last ten years*, as more and more couples decide not to walk down...

Read more

Debt recovery reorder

  • Jonathan Chadwick
  • Louise Hebborn
  • Alistair Gregory
  • Kerrie Ainscough
  • Declan Gilroy
  • Matthew Smith