One of the most important of these is the obligation to send a letter of claim, a formal legal notice taken before court proceedings begin following pre-action conduct. This document sets out the basis of a potential legal dispute and encourages early communication between the parties involved.

In this guide, we provide a clear overview of the letter of claim’s meaning, the key elements that should be included in a well-prepared letter, and the general process that follows once a letter is issued. Whether you're initiating a claim or responding to one, understanding these concepts helps to protect your legal position and work towards a constructive resolution.

What is a letter of claim?

A letter of claim forms a fundamental part of the pre-action protocol - a set of procedures established under the Civil Procedure Rules 1998 that govern civil litigation in England and Wales. These rules outline the steps that parties should take before commencing formal court proceedings. The purpose is to promote openness and understanding of each other's position, encourage early communication and provide an opportunity to resolve disputes without the need for litigation, wherever possible.

Serving as the first formal step in a debt recovery process, for example, a letter of claim is sent to the prospective defendant to notify them that legal action is being considered. It clearly sets out the facts of the case, the legal basis of the claim and what the claimant is seeking as a resolution. This approach ensures that the defendant is properly informed and given an opportunity to respond meaningfully before matters escalate further.

Once a letter of claim is received, the defendant is required to acknowledge receipt - typically within 14 to 28 days. This period gives both sides the opportunity to consider their positions, seek legal advice if necessary, and explore whether the issue can be resolved without going through the court process.

Letters of claim can be used across a broad range of legal matters, including:

• Professional negligence: claims of this nature arise when a professional - such as a solicitor, accountant, surveyor or financial adviser - has provided substandard advice or services. A letter of claim in these cases sets out how their actions (or inaction) have caused loss or damage.
• Family disputes: while many family law matters are resolved without formal litigation, certain disputes - such as financial disagreements following separation or issues involving inheritance - may begin with a letter of claim to outline concerns and prompt constructive dialogue.
• Property disputes: whether involving boundary disagreements, rights of way or issues around ownership, a letter of claim provides a clear opportunity to state your legal position, request specific action and seek a resolution before escalating the matter to court.
• Tenancy breaches: this can include disputes between landlords and tenants over unpaid rent, damage to property or breaches of tenancy agreements. A letter of claim allows for a formal warning and an opportunity to resolve the issue amicably before legal enforcement is pursued.
• Debt claims and civil money claims: when debt remains unpaid under a contract, invoice or loan agreement, a letter of claim is often the first formal attempt to recover the outstanding amount. It gives the debtor an opportunity to respond, dispute or settle the matter before further legal action is taken.

What should be included in a letter of claim?

UK letters of claim requirements are designed to encourage early resolution and ensure both parties are clear on the issues in dispute. A properly detailed letter of claim will typically include:

• A summary of the facts: a clear statement of the circumstances giving rise to the claim, presented in a straightforward and factual manner.
• The legal basis of the claim: an outline of the relevant legal grounds being relied upon, showing how the law supports the claimant’s position.
• Details of what is being claimed: a concise explanation of what the claimant is seeking from the defendant, such as the relief and corrective action that is being sought.
• A time limit for response: a reasonable period, usually between 14 and 28 days depending on the complexity of the matter, within which the defendant should provide a full written reply.
• Relevant supporting evidence: copies of any documents relevant to the claim, such as contracts, emails or invoices, that are relied upon to support the claim.

What happens after the other party responds to a letter of claim?

What happens next will largely depend on how the other party has responded to the letter of claim and the nature of the issues raised. Their reply can influence the direction of the dispute and whether it can be resolved amicably, or if further legal steps are required.

• If the other party accepts liability: either in full or in part, and provides a reasonable proposal for settlement, it may be possible to resolve the matter quickly without proceeding to court. In these situations, a negotiated settlement can offer a cost-effective and timely outcome, bringing clarity and closure for all involved.
• If the claim is disputed: the defendant should explain their position in detail, including any counter-arguments and supporting key documents. They may challenge the facts, the legal basis or the amount being claimed. A clear and substantive response allows both sides to assess the strengths of their positions and explore possible ways forward.

In either case, under the Practice Direction detailed in the Pre-Action Conduct and Protocols, parties are encouraged to consider alternative dispute resolution (ADR) options, such as mediation, negotiation or arbitration. These methods can help resolve matters efficiently while avoiding the time, expense and stress often associated with court proceedings. ADR is actively supported by the courts and often viewed favourably when assessing whether parties have taken reasonable steps to settle a dispute and avoid the need to start court proceedings.

If no agreement can be reached and the dispute remains unresolved, court proceedings may be the next step. At this stage, formal litigation begins, and the matter will be determined by a judge.

What should I do if I've had no response to letter of claim?

If you have sent a formal letter of claim and the defendant fails to respond within the specified timeframe - or provides an inadequate or evasive reply - you may be entitled to take the next step and begin formal court proceedings.

The purpose of a letter of claim is to give the other party a fair opportunity to respond and potentially resolve the matter before litigation becomes necessary. However, if that opportunity is ignored or not taken seriously, the courts recognise your right to commence court proceedings.

Before commencing legal action, it is important to ensure that the letter of claim complied with the relevant pre-action protocol, including providing sufficient time for a response. Assuming all requirements have been met, you can proceed with issuing a claim in court.

Where the defendant has failed to engage with the process, you may also be entitled to recover additional costs. This includes not only the cost of court proceedings but also reasonable legal expenses associated with bringing the claim - especially if their failure to respond has caused unnecessary delay or expense.

At Walker Foster, we always aim to resolve matters constructively, but when court action becomes necessary, we are here to provide firm, clear and reliable representation. We will guide you through the process with professionalism and care, helping you take the necessary steps to protect your position.