Letter before action - better to use a solicitor?

[Dahu371]

A customer owes us around 2k. He's stopped responding to emails and phone calls.

I believe there are solicitors online who offer a letter before action service for a small cost. Is it worth doing this, if so can anyone recommend one to use?

 

[Newchodge]

Thomas Higgins. If someone can pay a solicitor's letter may concentrate the mind more than one from you. If they can't pay it would, obviously, make no difference.

 

[White Collar Legal]

Be careful of using that firm. Whilst it is cheap (I believe £3 for the letter plus a percentage if successful), if the matter goes to Court and TH prepare the documents, the documents may not be correct. I've had cases against them where I've been successful due to their documents. But you get what you pay for.

 

[Big G]

Hi there Dahu371,

Have you considered using a very reputable debt recovery company?

I agree with White Collar Legal that whilst the £3 per letter does sound inviting I believe that this is literally all that you get. 1 letter and they then want to issue legal proceedings which is where/when Solicitors get to charge further fees. Don't get me wrong, if the initial letter before action works for £3 then it is an excellent result.

When you say it is a customer and he has stopped responding is it an individual that owes you the funds? Have they raised any dispute at all or possibly promised to pay and therefore admitted liability?

 

[Lisa Thomas]

Are they a sole trader or Limited Company?

 

[Michael Gerard]

Solicitors offering 'intro rates' such as £3 to draft a letter chasing a debt, is usually a marketing tool to secure the client should the matter not be resolved at that point.

Also, do not confuse the £3 'letter before action' with a properly drafted and CPR compliant Letter of Claim, which needs to be carefully drafted out (albeit you will be on the small claims track).

For a dispute of £2,000, perhaps talk to a solicitor who will be prepared to draft out a Letter of Claim or provide a template for a [low] fixed fee for you to complete and send, and to also explain the process so that you can take it through the small claims at nominal cost. If the debt is not disputed, statutory demand route is an option.

 

[White Collar Legal]

As above, from experience, the £3 letters are not proper letters which should be compliant with the Practice Direction: Pre-Action Conduct or the Pre-Action Protocol for Debt Recovery Claims.

I'm happy to assist drafting

 

[Newchodge]

As above, from experience, the £3 letters are not proper letters which should be compliant with the Practice Direction: Pre-Action Conduct or the Pre-Action Protocol for Debt Recovery Claims.

I'm happy to assist drafting

Can you explain in what way they are deficient?

 

[Lovetts Solicitors]

To be fair to Thomas Higgins the reason they can offer cheap Letters Before Action is because they have a highly automated process in place, which does cut the costs considerably. It's also a bit of a loss leader because if the letter leads to a claim that's where there is a bit more margin to be made with the fixed fees.

As solicitors they (and we) obviously can't send out letters we know to be completely deficient with the protocol (especially the new Protocol which came into force last year for debts against individuals which requires us to send out about 10 pages of documentation with every letter!), but they are obviously reliant on the information that has been supplied to them by their client. In most cases for business debts it's sufficient to be able to state the name of the client (and any suitable reference), the amount owned, and if you're claiming interest or costs to include a schedule breaking this down. This is because most business debtors will know straight away what matter you're referring to, and if they are unsure they can inform you so they can be referred to the client. This satisfies the Protocol's requirements for sufficient information to be exchanged.

When it comes to issuing a Claim it can get trickier. Most debt recovery solicitors use a bulk interface directly into the court service computer systems. This was designed in the 1970s so it is very limited (for example you can only use 1000 characters on the Particulars of Claim and it can't cope with more than 2 defendants) which means it's inevitable that you won't be able to set out a detailed case within these limits. The Court Service is aware of this and takes the view that for straightforward B2B cases where money is owed it's sufficient to provide basic information in the Particulars (amount owed, the fact it's for goods/services unpaid, how any interest has been calculated and the first and last dates of any overdue invoices) within the system limits.

There is definitely a place for bespoke letters and Particulars, particularly for high value or complex matters, but where a client has a straightforward case it's entirely legitimate to use templated documents to speed up the process and keep costs down for everyone.

 

[ethical PR]

As above, from experience, the £3 letters are not proper letters which should be compliant with the Practice Direction: Pre-Action Conduct or the Pre-Action Protocol for Debt Recovery Claims.

I'm happy to assist drafting

Really that is quite an accusation to make.

In what way are they not compliant?

You can promote your own business based on your own strengths, rather than maligning others to try and get business.

 

[Deleted member 59730]

As above, from experience, the £3 letters are not proper letters which should be compliant with the Practice Direction: Pre-Action Conduct or the Pre-Action Protocol for Debt Recovery Claims.

I'm happy to assist drafting

I have always believed that the outcome of dealing with non-paying clients is to get paid, not to go to court. Showing that you are serious for £3 has proved successful for me.