Letter before action for an unpaid invoice: what the court expects

Before a debt claim is issued, the court expects the creditor to have written to the debtor, set out the claim and given a fair chance to pay, reply or negotiate. That letter is called a letter before action, a letter before claim or a Letter of Claim. This guide explains which rules govern it and what it has to contain. It is for small businesses and freelancers in England and Wales, and describes the letter's contents rather than giving a template.

Two sets of rules

The Pre-Action Protocol for Debt Claims "applies to any business (including sole traders and public bodies) claiming payment of a debt from an individual (including a sole trader)", and "does not apply to business-to-business debts unless the debtor is a sole trader" (paragraph 1.1). It does not apply where the debt is covered by another protocol, such as Construction and Engineering (paragraph 1.4).

The Practice Direction on Pre-Action Conduct and Protocols applies to disputes where no specific protocol applies (paragraph 2).

A sole trader who bought in the course of a business can still owe statutory interest and fixed sums.

Where the debtor is a company: the Practice Direction

Paragraph 6 lists the steps usually involved:

1. The claimant writes with concise details of the claim: the basis on which it is made, a summary of the facts, what the claimant wants and, where that is money, how the amount is calculated.
2. The defendant responds within a reasonable time: "14 days in a straightforward case and no more than 3 months in a very complex one". The reply should say whether the claim is accepted and, if not, why.
3. The parties disclose key documents relevant to the issues.

A person who knowingly makes a false statement in a pre-action letter may face proceedings for contempt of court (paragraph 2).

Where the debtor is an individual or sole trader: the Debt Protocol

Under paragraph 3.1 the Letter of Claim should contain:

• the amount of the debt, and whether interest or other charges are continuing;
• for an oral agreement, who made it, what was agreed, and when and where;
• for a written agreement, its date, the parties, and the fact that a copy can be requested;
• where the debt has been assigned, details of the original debt and the assignment;
• if the debtor is offering or paying instalments, why that is not acceptable;
• how the debt can be paid, and how to discuss payment options;
• the address for returning the Reply Form.

It should enclose an up-to-date statement of account; or the most recent statement, with the interest and charges added since then stated in the letter; or, where no statements have been provided, state the interest and charges added since the debt was incurred. It should also enclose three documents annexed to the protocol:

• the Information Sheet, which explains the letter and lists sources of free debt advice;
• the Reply Form, on which the debtor can agree or dispute the debt, propose payment and ask for documents;
• a Financial Statement form, for income and outgoings.

The letter should be clearly dated toward the top of the first page and posted that day or, if that is not reasonably possible, the next (paragraph 3.2).

Paragraph 3.3 deals with how it is sent, and was amended with effect from 1 October 2026:

• the letter should be sent by post;
• a creditor who has a personal email address for the debtor should also send it to that address;
• a creditor who has no personal email address for the debtor, but has other personal electronic contact details, should send it by at least one of those methods as well;
• if the debtor has explicitly asked not to be written to by post and has given alternative contact details, those should be used. A clause in the creditor's standard terms is not an explicit request.

The 30-day periods under the Debt Protocol

Where the debtor has responded but no agreement is reached, the creditor should give at least 14 days' notice of the intention to start proceedings, unless there are exceptional circumstances, for example because the limitation period is about to expire (8.2).

If a repayment agreement is reached, the creditor should not start proceedings while the debtor keeps to it. A creditor who later wants to sue must send an updated Letter of Claim and comply with the protocol afresh (6.4).

Considering ADR

The Practice Direction says that "litigation should be a last resort". The parties should consider negotiation or another form of alternative dispute resolution (ADR), such as mediation, and a party's silence in response to an invitation, or a refusal, "might be considered unreasonable by the court" and could lead to an order to pay additional costs (paragraphs 8 to 11).

Where the reply disputes the invoice, see defences, set-off and counterclaims.

If the steps are skipped

The court looks at whether the parties complied in substance and "is not likely to be concerned with minor or technical infringements" (Practice Direction, paragraph 13). Where there has been non-compliance, paragraphs 15 and 16 of the Practice Direction allow the court to:

• stay (pause) the proceedings while the missing steps are taken;
• order the party at fault to pay the costs of the proceedings, or part of the other side's costs;
• deprive a claimant at fault of interest for a period, or award it at a lower rate;
• award interest against a defendant at fault at a higher rate, not exceeding 10% above base rate.

Under rule 44.2(5) of the Civil Procedure Rules, the conduct the court considers when deciding costs includes "the extent to which the parties followed the Practice Direction – Pre-Action Conduct or any relevant pre-action protocol". See also pre-action conduct generally.

The letter does not stop the limitation clock

Paragraph 17 of the Practice Direction is explicit: it and the protocols "do not alter the statutory time limits for starting court proceedings". For a debt under a simple contract, section 5 of the Limitation Act 1980 gives six years from the date the cause of action accrued.

What can restart time is something done by the debtor. Under section 29(5), if the person liable acknowledges the claim or makes any payment in respect of it, the right of action is treated as accruing on the date of the acknowledgment or payment. Section 30 requires an acknowledgment to be in writing and signed, and under section 29(7) a claim that is already time-barred is not revived. A creditor's letter does none of this.

If a claim is issued to meet a deadline before the pre-action steps are finished, paragraph 17 says the parties should apply for a stay while they comply. See how long there is to claim.

What a solicitor will want from you

• The debtor's exact legal identity: a company, or an individual or sole trader.
• The contract, terms, quote or purchase order, or a note of what was agreed orally.
• Each unpaid invoice and a statement of account showing payments, interest and charges.
• Any letter of claim already sent, its date, how it was sent and what was enclosed.
• The debtor's replies, including any Reply Form, dispute or payment proposal.
• Dates of any part payments or written admissions, and when payment first fell due.

Run the free case check

This guide is general information about the law of England and Wales. It is not legal advice. Which pre-action rules apply depends on who the debtor is and what has already been sent, and the time limit for a claim keeps running while letters are exchanged.