Before Going to Court
Court action is intended to be action of the last resort. The Courts will expect you to have taken certain steps before issuing Court proceedings. These steps are set out in the Civil Procedure Rules 1998. If you fail to comply with these Rules, the Court has the power to impose sanctions for con-compliance. The most common sanction is to penalise that party in costs.
What Must I do Before Going to Court?
You must demonstrate that you have taken reasonable steps to try to resolve matters before issuing proceedings e.g.
- By attempting negotiation
- By sending a formal letter of claim
- By considering and, if appropriate, offering to enter into mediation/ other alternative dispute resolution procedures
What should my formal letter of claim contain?
The letter should include:
- Both parties’ full names and addresses
- The basis on which the claim is made(i.e. why the claimant says the defendant is liable)
- A clear summary of the facts on which the claim is based
- What the claimant wants from the defendant
- If financial loss is claimed, an explanation of how the amount has been calculated
- Details of any funding arrangement (within the meaning of rule 43.2(1)(k) of the CPR) that has been entered into by the claimant
The letter should also:
- List the essential documents on which the claimant intends to rely
- Set out the form of Alternative Dispute Resolution (if any) that the claimant considers the most suitable and invite the defendant to agree to this; state the date by which the claimant considers it reasonable for a full response to be provided by the defendant
- Identify and ask for copies of any relevant documents not in the claimant’s possession and which the claimant wishes to see.
- Unless the defendant is known to be legally represented the letter should:
- Refer the defendant to the Civil Procedure Rules and in particular refer the defendant to the Court’s powers to impose sanctions for failure to comply
- Inform the defendant that ignoring the letter before claim may lead to the claimant starting proceedings and may increase the defendant’s liability for costs.
Are there any examples of formal letters of claim? Yes click here to see FREE examples
How long should I give the Defendant to reply?
The Court expects you to be reasonable. This means that the more complex the claim, the more reasonable it is to give the Defendant longer to consider and respond to your claim.
As a rule of thumb you should give a Defendant 14 days to respond to relatively simple debt type claims, up to 30 days for more complex claims and 90 days for allegations of professional negligence e.g. action against an accountant/ solicitor etc.
However long has been allowed for a response, you should make it clear that you expect an acknowledgement within 14 days.
What should the Defendant’s response contain?
Unless the defendant accepts the whole of the claim, the response should:
- Give reasons why the claim is not accepted, identifying which facts and which parts of the claim (if any) are accepted and which are disputed, and the basis of that dispute
- State whether the defendant intends to make a counterclaim against the claimant (and, if so, provide information equivalent to a claimant’s letter before claim)
- State whether the defendant alleges that the claimant was wholly or partly to blame for the problem that led to the dispute and, if so, summarise the facts relied on
- State whether the defendant agrees to the claimant’s proposals for ADR and if not, state why not and suggest an alternative form of ADR (or state why none is considered appropriate)
- List the essential documents on which the defendant intends to rely
- Enclose copies of documents requested by the claimant, or explain why they will not be provided; and identify and ask for copies of any further relevant documents, not in the defendant’s possession and which the defendant wishes to see.
What happens if the parties do not comply with reasonable pre-issue behaviour?
Because the issue of costs is within the discretion of the Courts, if a party behaves unreasonably, the Court can order that party to pay their opponent’s costs. This is true even if the matter is allocated to the Small Claims track. It is therefore important that you act reasonably at all times to avoid this potentially costly sanction being imposed.