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For debts covered by the new pre-action protocol the previous ‘letter before action’ has now been replaced by the ‘letter of claim’.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

 

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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 01616 966 229.

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4.7 score on Trustpilot Based on count 910

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