Receiving a Letter Before Action can be concerning particularly where it threatens legal proceedings. In England and Wales parties are expected to comply with the Civil Procedure Rules and the relevant Pre Action Protocol before commencing litigation. A failure to respond appropriately may result in adverse costs consequences even if you are ultimately successful in defending the claim. A Letter Before Action is usually sent as a final warning before formal court proceedings are issued and therefore it should never be ignored or treated lightly.
A Letter Before Action may be sent by an individual a business or their legal representatives and is intended to set out the basis of a claim and give the recipient an opportunity to respond before proceedings are issued. The purpose of the pre action process is to encourage the exchange of information between parties at an early stage and to promote settlement without the need for court intervention where possible. The court expects parties to act reasonably and to engage constructively during this stage of the dispute.
Understand The Nature Of The Claim Being Made
A Letter Before Action should set out the factual and legal basis of the claim together with the remedy sought by the claimant. It may relate to a debt dispute a contractual issue a professional negligence claim or a property related matter. Supporting documentation may also be enclosed which may include invoices contracts correspondence or statements of account. It is important to review the letter carefully together with any attachments in order to understand the allegations being made and the legal position being advanced by the claimant.
You should also check whether the letter refers to a specific Pre Action Protocol as different types of claims are governed by different protocols under the Civil Procedure Rules. For example claims relating to unpaid debts may be subject to the Pre Action Protocol for Debt Claims while property related disputes may be governed by the Property Protocol. Each protocol imposes certain obligations on the parties including time limits for responding and requirements for disclosure of documents.
Do Not Ignore The Letter
Ignoring a Letter Before Action may place you at a significant disadvantage if proceedings are later issued against you. Courts in England and Wales may take into account the conduct of the parties when determining liability for legal costs and a failure to engage with the pre action process may result in adverse cost orders even if you are ultimately successful in defending the claim. A timely and considered response demonstrates engagement with the process and may assist in resolving the dispute at an early stage without the need for litigation.
You should consider:
• Acknowledging receipt of the letter
• Requesting further information where required
• Setting out your position in writing
• Providing supporting documentation
• Seeking legal advice before responding
Taking these steps at an early stage may assist in clarifying the issues in dispute and narrowing the scope of any potential proceedings.
Comply With The Relevant Pre Action Protocol
Different types of claims are governed by specific protocols such as the Debt Claims Protocol or the Property Protocol. These protocols set out the information that should be included in a Letter Before Action and the steps that the parties are expected to take before proceedings are issued. They also impose time limits within which a response should be provided. For example the Debt Claims Protocol generally provides a period of thirty days for a response to be submitted.
A properly drafted response may dispute liability admit part of the claim or propose settlement in order to avoid the need for proceedings. In some cases the response may also request additional documentation or clarification in order to better understand the basis of the claim. Compliance with the relevant protocol may assist in avoiding unnecessary litigation and may also protect your position in relation to costs should proceedings later be issued.
Prepare For The Possibility Of Court Proceedings
If the dispute cannot be resolved following the exchange of correspondence the claimant may issue proceedings in the County Court or the High Court depending on the value and complexity of the claim. At this stage it may be necessary to file a defence or take other procedural steps within strict time limits. Failure to respond appropriately may result in judgment being entered against you by default.
Early legal advice may assist you in preparing a robust defence identifying any potential counterclaims and exploring opportunities for settlement where appropriate. In some cases it may be possible to resolve the dispute through negotiation or alternative dispute resolution methods such as mediation.
If you have received a Letter Before Action it is important not to delay in seeking legal advice in order to protect your position and minimise the risk of further escalation.
Contact Penerley Solicitors today for immediate assistance in responding to a Letter Before Action and protecting your legal position before proceedings are issued.
