Letter Before Action

Letter Before Action – What is it and what are the benefits?


CLI is an Award-Winning Debt Recovery Agency based in Kent. Our team of experts have put together advice and tips on the benefits of using a Letter Before Action, part of the debt recovery process. 

 A Letter Before Action (LBA) is a letter, which can be sent by a Creditor, a Solicitor or a Debt Collection Agency, informing a customer who has not paid his account on time that Legal Action will be commenced unless payment is made within a set period of time, usually 7 days.

Strictly speaking, it is not compulsory to send a Letter Before Action prior to issuing legal proceedings. However, we do strongly advise to inform debtors when legal action is about to start. Failure to do so could result in the judge refusing to award costs.

Sent at the right time and integrated within a well thought out Credit Control Strategy, a Letter Before Action will often trigger payment, especially when the debtor company has casually omitted to pay its account on time.

However, when poor cashflow is the main reason for non-payment, a Letter Before Action may not generate the anticipated outcome. In the UK, the Letter Before Action is usually sent by ordinary post, to the address of the registered office of the Limited, Plc or LLC debtor company.

A well drafted Letter Before Action should warn the debtor company about the consequences of the legal action including the applicable late payment financial sanctions and additional legal costs the debtor company will have to face should it miss that last opportunity to settle its account.  Of course, any County Court Judgement (CCJ) will have a negative impact on the debtor company credit rating.

At CLI, we believe that sending a Letter Before Action Recorded Delivery generates more impact with the debtor and a signature from the debtor will also be very welcome in case the debtor denies ever receiving the Letter Before Action once in Court.

At CLI, we also believe that just sending a Letter Before Action to the debtor as soon as the account goes overdue is not sufficient to demonstrate that the creditor has made real attempts to settle the matter amicably with his customer. Whether this is done in-house or outsourced to a Credit Control Services provider, creditors should have a credit control procedure in place which includes a mix of chasing letters, emails and phone calls prior to considering sending a Letter Before Action.

Since 1st of October 2017, there is a requirement to use the Pre-Action Protocol (PAP) for Debt Claims prior to pursuing a sole trader or individual through the Courts.

CLI is of the opinion that the PAP now replaces the LBA when recovering debts against a consumer or a non-limited company. Some law firms are still sending LBAs to consumers and traders, sometimes calling them “Pre-Action Protocol compliant LBAs” or similar. In our view, this is a mistake and no LBA should be sent prior to the Pre-Action Protocol Letter and its response pack. Having said this, and always in the context of warning the debtor in respect of the additional contractual and legal costs applicable once legal action is commenced, a LBA ought to be sent if no response has been received following the PAP.


Prior to sending a LBA, creditors need to check that their data is accurate and here is a list of what to do:

 Do you have the right name for your debtor? You can’t just write to “ABC Company”. Your debtor will either be ABC Company Limited or John Smith T/A ABC Company or John and Tracy Smith T/A ABC Company.

 Do you have the right address? Did you check it is the registered office of the Limited company or in the case of a consumer or trader, that the residential address or trading address is still current?

 Of course, if in doubt, you can always post the LBA to several addresses, fax it, email it (with a read receipt)

 In your subject header, clearly state the account number under which the debt is due

 If you are adding late payment sanctions, whether these are in line with the Late Payment Regulations 2013 or Contractual provisions, make sure you list all invoices with the relevant late payment compensation and/or interest amount due alongside them

 Add any relevant reference number (e.g. purchase order) that your customer will recognise

 Give precise payment instructions on how to discharge the debt

 List the precise sums which will be added in Court fees, Solicitors and Enforcement costs which will get added to the debt in case of non-payment

 Remind the debtor that its credit rating will be affected if any CCJ gets registered against its name


One final reminder: never use a LBA as a one-shot debt collection strategy. This is not what a LBA is designed for. You should always carry out your threat and issue Legal Proceedings if a debtor does not react to a LBA. If you don’t, you will lose all credibility when chasing your overdue accounts and your customers will very quickly become immune to your empty threats.

Our services include International Letter Before ActionInternational Debt Collection and International Trace and Investigation. For more information on debt collection services please get in touch with Credit Limits International Debt Collection Agency