A Letter Before Action (LBA) is the most powerful tool in your debt recovery arsenal before court proceedings. When done correctly, it recovers payment in over 70% of cases — without ever needing a solicitor. Here's everything you need to know.
What is a Letter Before Action?
A Letter Before Action (also called a "letter of claim" or "pre-action letter") is a formal written notice to a debtor stating that you intend to begin court proceedings to recover a debt unless payment is made within a specified timeframe.
Under the Civil Procedure Rules (specifically the Pre-Action Protocol for Debt Claims), sending an LBA is a mandatory step before issuing court proceedings in England and Wales. If you skip it, a judge may penalise you on costs even if you win.
What must an LBA include?
For an LBA to be legally compliant and effective, it must contain:
- The amount owed: A clear statement of the principal debt, including invoice numbers and dates.
- Statutory interest: Under the Late Payment of Commercial Debts Act 1998, you can claim 8% above the Bank of England base rate (currently 12.5% total) on B2B debts.
- Compensation: A fixed amount based on the debt size: £40 (debts up to £999.99), £70 (£1,000–£9,999.99), or £100 (£10,000+).
- A deadline: You must give the debtor at least 30 days to respond — this is a requirement under the Pre-Action Protocol.
- Response options: You must include a reply form or clear instructions for how the debtor can dispute the debt, propose a payment plan, or seek debt advice.
- Information sheet: A standard information sheet explaining the debtor's rights, including the right to seek free debt advice from organisations like StepChange or Citizens Advice.
When should you send an LBA?
Timing is crucial. Send too early and you risk damaging a salvageable relationship. Send too late and you've wasted months of recovery time. The optimal window is:
- 30–60 days overdue: You've sent multiple reminders with no response or broken promises to pay.
- After escalated chasing: You've tried email, phone, and SMS — the debtor is either ignoring you or stalling.
- Before engaging a solicitor: An LBA often resolves the matter without legal costs.
Common mistakes to avoid
- Not giving 30 days to respond. Courts take a dim view of creditors who rush to proceedings. The protocol requires 30 days minimum.
- Threatening action you won't take. If you say you'll issue proceedings, you must be prepared to follow through. Empty threats destroy credibility.
- Getting the numbers wrong. Incorrect interest calculations or wrong compensation amounts give the debtor grounds to dispute the entire claim.
- Sending it to the wrong address. The LBA must go to the debtor's registered address (for companies) or last known address (for individuals).
- Not keeping evidence. Send by recorded delivery or through a tracked letter service so you can prove it was received.
What happens after you send it?
In our experience, LBAs produce one of four outcomes:
- Payment in full within 14 days (most common — ~45% of cases)
- Debtor proposes a payment plan (~25% of cases)
- Debtor disputes the debt (~15% of cases — you'll need to review the dispute)
- No response (~15% of cases — proceed to court proceedings)
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