What is Letter Before Action (LBA)?

A Letter Before Action (LBA), also called a letter before claim, is a formal written demand sent to a debtor before initiating court proceedings. In England and Wales, sending a compliant LBA is mandatory under the Civil Procedure Rules and the Pre-Action Protocol for Debt Claims.

• **Why LBAs are important:**
• Legally required: - Courts may impose cost penalties or stay your claim if you skip this step
• Highly effective: - Studies suggest **70–80% of debts are settled** after receiving a properly drafted LBA
• Shows reasonableness: - Demonstrates to the court that you tried to resolve the dispute before litigation
• Establishes timeline: - Creates a clear record of when the debtor was given a final chance to pay

What an LBA must include: 1. The amount owed and how it was calculated 2. Statutory interest claim - 8% above the Bank of England base rate under the Late Payment of Commercial Debts (Interest) Act 1998 3. Fixed compensation - £40 (debts under £1,000), £70 (£1,000–£9,999.99), or £100 (£10,000+) 4. Original agreement details - invoice numbers, dates, description of work 5. Response deadline - minimum 30 days from receipt 6. Payment details - how and where to pay 7. Alternative dispute resolution - mention of mediation or the Small Business Commissioner 8. Clear statement that court proceedings will follow if not resolved

How to send: Send by recorded delivery or email with read receipt to prove the debtor received it. Keep a copy of the letter and proof of postage/delivery.

After sending: If the debtor pays within 30 days, the matter is resolved. If they don't respond or refuse to pay, you can proceed to file a claim via Money Claims Online. If they dispute the amount, you should consider mediation before court.