If a client hasn't paid an invoice and you're thinking about court action, a Letter Before Action (LBA) is almost always the next step — and in most cases, it's a legal requirement before you can even file a claim. Here's what it is, what it needs to say, and when it's worth handing the whole process to a professional debt recovery agency instead.
What is a Letter Before Action?
A Letter Before Action (sometimes called a Letter of Claim or Letter Before Claim) is a formal, written demand for payment sent to a debtor before you start court proceedings. It sets out exactly what is owed, why, and what will happen if payment isn't made within a set deadline.
It isn't just a strongly worded chaser email. Under the Pre-Action Protocol for Debt Claims, an LBA sent to an individual or sole trader has to follow a specific format and include specific information — and even for business-to-business (B2B) debts, where the formal Protocol doesn't strictly apply, courts expect to see evidence that you gave the debtor a fair final opportunity to pay before you sued them.
Why the Letter Before Action matters
Skipping this step, or sending something vague, can cost you later. If a case does end up in court, judges look at whether both sides followed the relevant pre-action conduct rules. A creditor who goes straight to litigation without a proper LBA can face cost penalties — even if they ultimately win the claim.
Beyond the legal angle, a well-drafted LBA is also just effective. It signals that you're serious, it starts a paper trail, and in our experience it resolves a significant proportion of overdue B2B invoices on its own, without ever reaching court.
What must be included in a compliant Letter Before Action
- The amount owed, broken down clearly (principal, any interest, any fees)
- How the debt arose — invoice number, dates, contract or PO reference
- A clear deadline for payment (usually 30 days for individuals/sole traders under the Protocol; commonly 7-14 days is used for straightforward B2B debts, though 30 days is safest if you want full Protocol compliance)
- How to pay, and who to contact with queries
- A statement that you intend to start court proceedings if payment isn't received
- Details of any interest and compensation being claimed under the Late Payment of Commercial Debts (Interest) Act 1998, where applicable
- An offer to discuss a repayment plan, if appropriate
How long does the debtor have to respond?
For consumer debts, the Protocol sets a minimum of 30 days. For commercial (B2B) debts, there's more flexibility, but giving less than 7-14 days is likely to look unreasonable if the matter later goes before a judge. We generally recommend 14 days as a fair balance between urgency and defensibility.
What happens if the debtor ignores the letter?
If the deadline passes with no payment, no response, and no agreed payment plan, you have a few options: escalate to a formal demand such as a Statutory Demand (for debts over £750 owed by a company), instruct solicitors to issue court proceedings, or pass the debt to a commercial debt recovery agency to pursue on a no-collection, no-fee basis.
In practice, many businesses find the third option the most efficient — an experienced agency has the leverage, the templates, and the follow-up process to get a resolution faster than a single letter sent internally, without the upfront legal costs of instructing a solicitor.
Free Letter Before Action template
Below is a straightforward structure you can adapt. Always double-check current Protocol requirements before sending, particularly if the debtor is an individual or sole trader rather than a limited company.
- Your company letterhead, date, and debtor's correct legal name and address
- Subject line: 'Letter Before Action — Formal Demand for Payment'
- Paragraph 1: State the debt, invoice number(s), and date(s)
- Paragraph 2: State the total owed, including any interest/compensation
- Paragraph 3: Give a clear payment deadline and payment details
- Paragraph 4: State that court proceedings will follow without payment or contact
- Paragraph 5: Invite them to contact you to discuss, or to raise a dispute
- Sign off with a named contact and direct phone/email
When to bring in a debt collection agency instead
If you're chasing several overdue invoices, don't have time to manage the correspondence, or simply want the leverage of a specialist agency's name on the letterhead, this is exactly where UKDC comes in. We issue Letters Before Action as standard on every case we take on — and because we work no win, no fee, there's no upfront cost to find out whether a firmer approach will get you paid.
