William Cook
Dispute Resolution
Letter Before Action
A Letter Before Action (LBA) is a formal letter, that is essentially a warning that a party will issue court proceedings to recover their loss.
Its normally the final step before legal proceedings begin. It sets out the complaint and what is required to resolve it.
It is usually the final opportunity to settle a matter before going to court. It shows the other side you are serious and will give the recipient an opportunity to respond to the dispute. It will set out the legal basis of your claim and the remedy sought. The deadline for responding to a LBA is normally around 14 days.
Consequences of Ignoring a Letter Before Action
If you are served with an LBA, court proceedings are likely to follow, if the LBA is ignored. The sender will be entitled to escalate the matter by issuing a claim in the appropriate Court.
The Court expects the parties to engage with pre-action correspondence. If you chose to ignore the warning letter and any subsequent claim, the Court may enter a default judgment against you, meaning that the claimant will automatically win, and the other party will be ordered by the Court to pay the full amount claimed. This may include interest and any legal costs. A default judgment can also damage your credit rating and lead to enforcement action, such as bailiffs or deductions from your wages.
Ignoring a LBA will not make the problem go away. Don’t Panic and act promptly and make a note of the deadline. Early engagement can often resolve matters without the need for court action and the dispute will end there if the recipient settles the matter.
A well drafted LBA can lead to a prompt offer of settlement. If poorly drafted, it could undermine your position or even prejudice your case and may escalate the dispute unnecessarily or be used against you in Court.
Aaron Burkett a Solicitor in our Dispute Resolution team said:
“If you require our legal services, you are chasing unpaid invoices or facing a contractual dispute, an LBA is a powerful tool that indicates that you are serious about enforcing your rights regarding the dispute. This formal approach will allow the other side a chance to resolve matters amicably without the need for escalation and additional expense and unnecessary stress.
Mullis and Peake Dispute resolution Team can help you understand your legal position and draft an appropriate Letter Before Action or response to a Letter before action if you are being pursued by a Claimant.”