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What is a ‘Letter of Claim’?

Posted on 26th October 2023 in Dispute Resolution

Posted by

Jack Matthews

What is a ‘Letter of Claim’?

If you have a claim against someone, it is important that you send a letter to the prospective defendant setting out full details of your claim. This is called a ‘Letter of Claim’ or “Letter Before Action”. 

A Letter of Claim is the first and most important step that must be taken before Court proceedings can commence. There are a couple of reasons for doing so.

Pre-Action Protocols and Practice Directions

The Civil Procedures Rules 1998 set out a number of “Pre-Action Protocols” which claimants are required to comply with before a claim is issued at court. Pre-Action Protocols specific types of claims including the most common ones such as:

o  Debt claims (Business to Individual);

o  Personal Injury claims;

o  Clinical Negligence;

o  Construction and Engineering Disputes;

o  Defamation claims;

o  Professional Negligence;

o  Housing Disrepair claims; and

o  Possession claims.

Where there is no relevant Pre-Action Protocol, the Practice Direction on Pre-Action Conduct applies, and the spirit of the Pre-Action Protocols should be observed in any event.

The aims of the Pre-Action Protocols are:

o  To initiate and increase pre-action contact between parties;

o  To encourage better and earlier exchange of information;

o  To encourage better pre-action investigation by both sides;

o  To put the parties in a position where they may be able to settle cases fairly and early without litigation;

o  To enable proceedings to run to the court’s timetable and efficiently, if litigation does become necessary.

Therefore, the Protocols and Practice Directions make it clear that before commencing proceedings the court will expect the parties to have exchanged sufficient information regarding each other’s position and make decisions on how to proceed; including trying to settle the issues.

What should a Letter of Claim Include?

Generally, a Letter of Claim will need to include:

o  A relevant summary of the facts of your claim;

o  The relevant legal and factual basis of your claim;

o  What you are claiming from the defendant;

o  A time limit for the defendant to respond;

o  Any relevant documents.

Businesses who are sending Letters of Claim to consumers (and sole traders) are also required to include additional information about things like debt advice and require certain forms to be completed and returned. 

What if I don’t comply with the Pre-Action Protocol, or the Practice Direction on Pre-Action Conduct, and issue proceedings?

If proceedings are issued, the court will expect the parties to have complied with the applicable Pre-Action Protocol, or the Practice Direction on Pre-Action Conduct.

Where non-compliance has led to proceedings that may have otherwise been avoided, or has led to unnecessary costs being incurred, the Court may impose significant sanctions. The Court can also use sanctions against parties who refuse to take part in Alternative Dispute Resolution (ADR).

Sanctions can include:

o  The party which failed to correctly follow the procedures shall pay some or all of their opponent’s cost;

o  Depriving a claimant who is at fault of some or all the interests they may subsequently be awarded.

Therefore, it is vital if you are planning to commence Court proceedings that you comply with the relevant Pre-Action Protocol; a Letter of Claim is an extremely important document which should be carefully drafted.

Failure to comply with the rules, or an incorrectly drafted Letter of Claim, can have drastic consequences. Equally, most parties would prefer to avoid the court process and a well drafted Letter of Claim can be the first step in a resolution of the claim without the need to get the Court involved. This can substantially save time and costs.

How can Tozers help?

We have an established track record of assisting clients to resolve their legal disputes. If you believe you need assistance drafting a Letter of Claim, contact our specialist team today who will be more than happy to assist.

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