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Sometimes, when your business gets into a dispute, you will decide to resort to litigation. Before starting legal proceedings, you need to follow a specific pre-action protocol under the Civil Procedure Rules (CPR). Part of this requires you to write a letter before action (also known as a letter of claim). It is important that you comply with this legal procedure. This article will explain the requirements and purpose of a letter before action.
What is a Letter Before Action?
A letter before action is a formal document that you send before you begin court proceedings. It sets out the basis of your claim and requires the other party to take certain action. If the other party does not comply with the terms of letter or fails to respond, you may issue a claim.
Why Do I Have to Write a Letter Before Action?
The Civil Procedure Rules (CPR) require you to send a letter before action as part of the pre-action protocol for civil litigation. If you fail to do so, the court may consider this when deciding on costs. Sending a letter gives the other party information to enable you both to make an informed decision about how to resolve the dispute.
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What is the Purpose of a Letter Before Action?
There is a good reason that the CPR requests that you send a letter before action. It allows you and the other party to communicate at an early stage in the dispute and encourages them to be open and transparent. This way, you can uphold the court’s view that litigation is a last resort while minimising time and financial costs.
The CPR set out that a Letter Before Action should:
- give the other party enough information to allow them to understand your argument and provide evidence;
- attempt to settle the matter out of court and propose alternative dispute resolution (ADR) methods such as mediation, negotiation, or conciliation;
- manage the dispute efficiently to ensure no delays; and
- reduce the costs associated with disputes.
What Are the Requirements for a Letter Before Action?
The requirements for a letter before action can depend on the nature of your dispute. It is, therefore, crucial that you seek legal advice to ensure that it contains the correct details. Here are some main elements your letter before action should detail:
- the details of all parties to the dispute;
- facts and details relating to the dispute;
- contracts relating to the dispute and any other relevant documents;
- the legal basis of your claim and what relief you would like for the dispute (this should note should be something a court would realistically suggest);
- the value of the dispute and how it has been calculated;
- any ADR methods you want to use;
- the time period you want the other party to reply by, making it clear failure to do so could lead to proceedings; and
- that they may have to pay your legal fees if they lose.
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Key Takeaways
If you decide to file a claim in court, you must first send a letter before action to the other party. This is related to the courts’ belief that litigation should be the last resort in a dispute. This letter formally tells the other party your intentions for legal proceedings, helping the issue to potentially be resolved without needing to go to court. As such, it can be an effective cost-saving measure. You need to ensure a letter of action contains specific details required as set out in the relevant pre-action protocol. For example, it must contain information on the issues in dispute, the parties involved, and the legal basis of your claim.
If you need help understanding letters before action, LegalVision’s experienced disputes and litigation solicitors can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
Frequently Asked Questions
Sending a letter before action allows both you and the other party to be aware of the main issues in your dispute and potential consequences. As a result, you may find that the dispute can actually be resolved in another way, such as by mediation without litigation. In doing so, you preserve your business relationship and save costs.
In general, you should seek legal advice if you are unsure. As a general starting point, however, the CPR outlines key elements you must include in your letter to ensure it is sufficiently detailed.
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