The Civil Procedure Rules Practice Direction – Pre Action Conduct sets out the steps parties should take before proceedings are issued. To comply with the PD, a claimant is expected to write a Letter Before Action (LBA), also known as a Letter of Claim, before issuing a claim. This is intended to encourage early exchanges of information, facilitate settlement and avoid court action if possible.UpdateA new pre-action protocol for debt claims is still being discussed but has yet to be implemented. A draft can be seen here: Pre-action protocol for debt claims.
When responding to the letter, you can take the opportunity to ask the claimant to provide you with the documents they intend to rely on in their claim, such as any contract or agreement, notice of assignment (if the debt has been sold), statements of account, etc. For accounts regulated by the Consumer Credit Act, you can also request documents such as the credit agreement and the default notice.
Although the pre-action conduct practice directions may seem too technical, it’s worth trying to understand them and being able to quote the relevant bits of legislation if necessary, for example, explaining that the claimant failed to allow you time to respond to the letter or that they did not set out their arguments in such as way as to allow you to assess the situation.It is often possible to avoid a claim being issued by providing a suitable response to a letter of claim. Responding shows the prospective claimant that you know what you are talking about and will be defending the claim. Creditors often issue claims to those who ignore letters and expect those claims to go undefended so they can obtain default judgment.
The court has power to order sanctions against a party that does not comply if it considers that it should have reasonably been complied with, or that failure to comply has caused waste of the court’s time. This can be more significant with larger claims (over £10,000) which are not allocated to the small claims track. See allocation and costs for reference.
Paragraph 11 of the PD refers to alternative dispute resolution (ADR). See Settlement and ADR.
Paragraph 3 sets out the objectives of the pre-action conduct:
Paragraph 6 sets out the steps that should be taken before issuing a claim:
A prospective defendant is expected to respond within 14 days, so it’s a good idea to do so to stave off proceedings. As most letters written by creditors’ solicitors do not comply with the pre-action conduct in terms of the information they provide, your response can be simply to ask for disclosure of key documents as stated above.
Paragraph 13 refers to compliance:
The court will regard lack of sufficient information as a failure to comply. This includes supplying relevant documents and account information, however, for a defendant to be able to use this in their favour, they should have replied to the letter before action requesting such information, normally within 14 days. There is no need to offer a full response with arguments for disputing the account at this stage, not until the relevant documents have been supplied to enable you to assess your position.
Paragraph 16 refers to sanctions for non-compliance: