Handling and resolving disputes

This letter before action (also known as a letter of claim) is designed to help if you: want to threaten to sue another business that owes you money; or want to sue an individual who owes you money (it is suitable for a straightforward debt claim against a consumer or a sole trader who has failed to pay your invoices); or are thinking of suing a person or business for anything other than money they owe you. For example, if a supplier sent you the wrong items, or a courier service that you use damaged some of your goods in transit, you might want to sue them for compensation. You must usually write a letter before action or letter of claim to warn the person that you intend to start a legal claim against them, and give them an opportunity to explain themselves or settle the matter with you, eg by paying up. It gives the other business fair warning of your intentions and increases your chances of getting paid or getting a remedy without having to resort to expensive legal action. If you don’t send a formal letter before action to the other side before starting a claim, you run the risk of being penalised by the court if you do go on to make a claim. For example, you might not be allowed to get your legal costs paid by the other side even if you win. You can also purchase this document as part of the Small claims toolkit .