Letter of Claim

Letter of Claim

The Letter of Claim (also known as a Letter Before Claim or, less often but more accurately, the Letter Before Action) is where all pre-action procedure begins Citizens Advice. This is so much more than just a demand for payment or notice of intent to sue LexisNexis. If drafted properly, it sets out the matters in dispute, allows a person receiving the letter to understand what is being claimed of them and gives rise to serious dialogue, and provides a basis for any subsequent proceedings. ¹

The content of a Letter of Claim varies depending on the applicable Pre-Action Protocol. Specialist protocols prescribe specific requirements, whilst disputes falling outside a specialist protocol are governed by the Practice Direction – Pre-Action Conduct and Protocols ("PD–Pre-Action Conduct").² Regardless of the protocol, the overriding objective remains the same: to provide sufficient information to allow the opposing party to make an informed decision about liability, settlement or defence before proceedings are commenced.

A professionally drafted Letter of Claim should ordinarily include:

• the identities of the parties;
• a concise chronology of the material facts;
• the legal basis of the claim;
• the remedy sought;
• details of any financial loss or damages claimed;
• copies of key documents upon which the claimant intends to rely;
• where appropriate, reference to expert evidence; and
• a reasonable period within which the recipient is expected to respond.³

The level of detail should always be proportionate. A straightforward debt claim will require considerably less factual and legal analysis than a professional negligence claim involving complex expert evidence or a multi-party construction dispute.

The parties should avoid unnecessarily aggressive or inflammatory language. Courts expects from the parties to communicate constructively during the pre-action stage. Correspondence that appears designed merely to intimidate the opposing party is unlikely to advance the objectives of the Civil Procedure Rules and may ultimately undermine later arguments regarding costs.⁴

Equally important is the timing of the Letter of Claim. It should not be sent before the claimant has undertaken an adequate factual investigation. Before time allegations may result in inconsistent position including avoidable amendment and unnecessary procedural disputes.

A carefully prepared Letter of Claim demonstrates credibility, encourages constructive engagement and frequently establishes the tone for the remainder of the dispute.

Practitioners should also remain alert to limitation periods. Although parties are encouraged to engage in meaningful pre-action correspondence, negotiations should never continue to the extent that limitation expires. Where limitation is approaching, parties may need to agree a standstill agreement or issue protective proceedings whilst continuing settlement discussions.⁵