One of the first steps prior to commencing formal legal action is writing a letter before action.
- Include details of the breach of contract
Depending on the facts and circumstances of the individual case, it is usually acceptable to ask the party in breach to remedy the breach within a reasonable time frame. It is usual to set out the circumstances, the breach, and to set a timeline to remedy the breach. A period of at least 14 days for compliance is in accordance with the Civil Procedure Rules.
- Comply with the Pre-action Protocol
The Pre-action Protocol sets out how parties should act and attempt to resolve matters prior to commencing litigation. When issuing a letter before action, you need to ensure that the Letter complies with the Civil Procedure Rules, so as to ensure that if the prospective defendant does not respond or fails to act upon the letter, the court can impose appropriate penalties.
You should only include a figure regarding damages if you can calculate this and show how this is arrived at, for instance if this is specifically mentioned in the contract. You should be able to explain how the amount owed is calculated.
- Set out any claim for Interest
Do not forget that you can claim interest on amounts owed. Interest is calculated in accordance with any interest rate referenced in the contract or the then applicable interest rate set by the Court Service, for the number days which the amount has been owed.
- Your claim
It is usual to either ask for reparation of the breach, damages, or at least a full reply within a set timeframe. Once you referenced the contract you have entered, and the consideration for entering in the contract (ie the price paid under the contract), and once you have detailed the breach, you should also set out how, the breach of contract that you have outlined, has led to you suffering loss and damage. You can also enclose copies of documents that are relevant to this matter.
- Further legal action
You should also set out that failure to comply or to take necessary action as requested by the letter may lead to the start of legal proceedings.
The Letter before action can be a very cost-effective way to resolve disputes early, It is a simple way to ensure that you have indicated to the other party their breach and allowed them to remedy it, or seek damages relating to it before taking further action. In a wide variety of cases, a well-written letter before action may ensure that you get the matter resolved quickly and avoid costly and lengthy court proceedings.
Remember that the letter Before Action is the opening salvo in any legal proceedings and sets out the basis of your claim. You should avoid inconsistencies, ensure that the letter of action is thorough and correct (ie if you have referenced amounts owed, this should bear the correct figures calculated). For this reason, it is recommended that the letter before action be written by a lawyer, especially in complex cases.
Copies of the Pre-action protocol are available from the Court Service website. You can either draft your own letter using the protocol or seek independent legal advice. LawBite offers a model letter before claim for breach of contract. Simply fill the blanks setting out the breach, the consequences of the breach, the damage caused and the amounts that you are claiming.