What is a letter before action (and when to send one)

If an invoice is months overdue and the phone calls have dried up, a letter before action is usually the step that gets it paid. Here is what it is, when to send it, and what must be in it.

A letter before action (LBA), sometimes called a letter before claim, is a formal letter telling a customer that if they do not pay by a set date, you will start court proceedings. It is not a court document and it does not commit you to suing anyone. It is the last step before that, and in most cases it is the one that works.

Courts in England and Wales expect you to send one before issuing a claim: for debts owed by individuals and sole traders it is required under the Pre-Action Protocol for Debt Claims. Skip it and a judge can penalise you on costs even if you win.

When to send one

A rough rule: the invoice is 60+ days overdue and you have chased at least twice in writing. Sending it too early burns goodwill; too late and you have funded someone else’s cash flow for a quarter.

What it must include

• Exactly what is owed, invoice by invoice, plus statutory interest (8% above the Bank of England base rate under the Late Payment of Commercial Debts (Interest) Act 1998) and compensation
• The deadline to pay: 14 days is standard for business debts, 30 for individuals
• How to pay, and who to contact if they dispute the debt
• A clear statement that court proceedings will follow without further notice

Most letters before action are paid within the deadline. The debtor prices up a defended claim, then pays the invoice.

Send it properly

Post and email, on headed paper, addressed to the right legal entity, including the company number if it is a limited company. Keep a copy and proof of postage. If the deadline passes, you file the claim. If you were never going to, you should not have sent the letter.

A good LBA is firm, specific and boring. Anger reads as weakness; specifics read as someone who files claims.

General information, not legal advice. Where a document needs a solicitor’s sign-off, we say so.