The Complete Pre-Action Checklist Before Going To Court To Recover A Debt
Before starting court proceedings for an unpaid invoice, English law requires creditors to take reasonable pre-action steps. These steps are not box-ticking exercises, they exist to encourage early resolution and ensure fairness before litigation. If these steps are not followed the Court can impose costs sanctions should the matter be determined at trial.
The pre-action requirements will depend on whether you debtor is an individual/sole trader or a limited company.
Step 1: Identify who the debtor is
This is the most important starting point.
✔ If the debtor is a limited company or LLP
You must follow general pre-action conduct. This means writing to the debtor to demand payment of the outstanding sums, explaining what the sums are for and giving them a reasonable period of time to respond or make payment before issuing Court proceedings.
A properly drafted Letter Before Action (LBA) is usually sufficient at this stage.
✔ If the debtor is an individual or sole trader
You must follow the Pre-Action Protocol for Debt Claims, which is designed to give individuals additional protection before legal proceedings are issued.
This requires more than just a standard LBA and there are stricter requirements for the pre-action process under this pre-action protocol.
Step 2: Prepare the right pre-action letter
✔ For companies and LLPs
A Letter Before Action should clearly:
- identify the parties
- explain why the debt is owed
- state the total amount due
- set a clear deadline for payment or response
- explain what will happen if payment is not made
✔ For individuals and sole traders
A more detailed Letter of Claim is required.
In addition to the core information above, the debtor must be given:
- a clear explanation of the debt
- information about how they can respond and response forms
- time to seek advice
- the opportunity to request documents or propose repayment
Step 3: Allow the correct response period
✔ Company debts
The general pre-action protocol states that debtors must be given a reasonable period of time to respond to a letter before action. Whilst there is no fixed timeframe, guidance states that a reasonable time for an opportunity to respond is 14 days for a straight forward debt claim. In practice, this may vary depending on the prior correspondence between the parties and whether the debtor has been provided with ample opportunity prior to the letter being sent to respond or make payment. It may therefore be reasonable to give a company 7–14 days to respond.
✔ Individual / sole trader debts
You must allow at least 30 days for the debtor to respond before issuing court proceedings.
Issuing a claim too early can result in:
- delays
- cost penalties
- or the Court ordering the process to restart
Step 4: Deal with any response properly
If the debtor responds to your pre-action letter, you must consider the reply and respond fully before considering taking any further legal action.
A reply might include:
- a dispute
- a request for clarification or further information
- or a proposal to pay
You are required to respond reasonably. Ignoring a genuine response, particularly from an individual or sole trader can weaken your position later and may prejudice your costs position.
Step 5: Only then consider issuing proceedings
Court proceedings should only be considered as a last resort once:
- the correct pre-action steps have been followed
- the response window has passed
- you have responded to any reply
- and payment has not been made
Issuing a claim too early or without following the correct process can result in delays, additional costs, or the Court staying proceedings and ordering the parties to complete the process fully.
Lovetts are a specialist firm of UK & International debt recovery solicitors with more than 30 years of industry experience. If your business has outstanding debts that it is needs assistance recovering, contact us today.