In today’s commercial environment, businesses increasingly face disputes—whether contract breaches, partnership disagreements, or claims of negligence. For many of these, before one side rushes into litigation, there is an important step: the pre-action notice (also known as a “letter before action”, “letter of claim”, or “pre-action correspondence”). This article by Penlit & Greyson examines when such notices are required in corporate and general dispute litigation, why they matter, and how to handle them.
Keywords: pre-action notice, letter before action, corporate dispute, litigation, commercial litigation, pre-action protocol, corporate legal services, Penlit & Greyson.
What is a Pre-Action Notice?
A pre-action notice is a formal communication or warning sent by one party (typically the claimant) to the other party (the potential defendant) before commencing court proceedings.
Among others, it may be referred to as:
- a Letter Before Action (LBA) / Letter of Claim. Sprintlaw UK+2Francis Wilks & Jones+2
- correspondence under a pre-action protocol or practice direction. Kew Law+2LEXLAW Solicitors & Barristers+2
Its primary purposes are:
- to inform the other side of the claim or dispute and give them a chance to respond or settle; Saunders Law+1
- to enable the parties to exchange information and possibly avoid litigation; Covington & Burling+1
- to assist the court, if proceedings follow, by demonstrating that the parties attempted pre-litigation resolution. Association of Corporate Counsel+1
When Are Pre-Action Notices Required?
1. Jurisdictional & legislative requirements
In some jurisdictions or under certain statutes, serving a notice before litigation is mandatory. For example, in Nigeria:
- Under section 17 of the Companies and Allied Matters Act 2020 (“CAMA 2020”), an action against the Corporate Affairs Commission cannot be commenced until 30 days after a written notice of intention to sue is served. Legal 500
- Under section 308 of the Petroleum Industry Act 2021, there is a month’s notice period required before suing the upstream/downstream regulatory authorities. Legal 500
So, if your corporate dispute involves a statutory body or regulated entity in Nigeria, you must check whether a statutory notice is required before starting litigation.
2. Pre-action protocols in England & Wales
If the dispute falls under the jurisdiction of England & Wales (or is governed by English law) you’re generally required (or strongly expected) to follow the relevant pre-action protocol before issuing proceedings. For instance:
- Under the Practice Direction – Pre‑Action Conduct and Protocols, parties should exchange sufficient information before proceedings. LEXLAW Solicitors & Barristers+2Covington & Burling+2
- Specific protocols exist (e.g., for professional negligence, construction & engineering). Government of Justice+1
- If no specific protocol applies, a general pre-action letter setting out the claim, basis and remedy is required (or at least good practice). LEXLAW Solicitors & Barristers+1
3. Business-to-business / contract disputes
In commercial disputes (e.g., unpaid invoices, contract breaches, supply chain problems), there may not always be a statutory notice requirement, but sending a letter before action is widely regarded as a necessary step to preserve your position (especially on costs) and to meet the court’s expectations of reasonable conduct. Sprintlaw UK+1
For example, as one guide states: “If you want to bring a claim … you must first send a pre-action protocol letter – unless the matter is extremely urgent (such as where an immediate court order is needed)”. Sprintlaw UK
When Might a Pre-Action Notice Not Be Required?
- If a statute provides no notice requirement, or the relevant protocol expressly excludes the obligation. For example, some urgent matters (e.g., applications for injunctions, emergency relief) bypass the notice requirement. Bird & Bird+1
- If the parties have contractually agreed to waive pre-action steps or agreed a different process. Government of Justice
- If you are operating in a jurisdiction whose law does not mandate pre-action notices (or where local precedent holds them optional). Always check local law.
Why Compliance with Pre-Action Notices Matters
(a) Cost consequences & conduct penalties
Courts are increasingly taking into account the conduct of parties before proceedings when awarding costs. Non-compliance with the relevant protocol or notice step may result in cost sanctions. Saunders Law+1
(b) Opportunity to settle early
A well-handled pre-action letter can open the door to early settlement, avoiding the time, expense and reputational risk of full litigation. Government of Justice+1
(c) Clarifying issues / narrowing dispute
The pre-action stage allows parties to exchange information, documents and to identify the crux of the dispute—thus enhancing case-management and efficiency. Government of Justice
(d) Jurisdictional requirement
In jurisdictions (like Nigeria or in relation to specific regulated bodies) ignoring a statutory notice requirement may render the claim incompetent or subject to strike-out. Legal 500
Practical Steps for Drafting & Responding to Pre-Action Notices
Drafting a Pre-Action Letter (or Notice)
Key elements your letter should generally include (especially for business disputes):
- The identity of the claimant and the respondent. Sprintlaw UK+1
- A concise summary of the relevant facts (what happened, when). Sprintlaw UK
- The legal basis of the claim (e.g., contract clause, breach, negligence). Sprintlaw UK
- The remedy sought (payment, performance, indemnity, etc.). Francis Wilks & Jones
- A clear deadline by which the respondent must respond (often 14 days for straightforward matters). Francis Wilks & Jones+1
- A clear statement that if no response is received, litigation may be commenced. Sprintlaw UK+1
- Any applicable pre-action protocol reference or reference to statutory notice requirement (if known).
Responding to a Pre-Action Letter
If you receive such a notice:
- Acknowledge it promptly and consider whether the deadline is reasonable and whether an extension is needed. Saunders Law
- Provide a clear response: which parts of the claim you admit/deny, what your position is and whether you propose resolution/ADR. Francis Wilks & Jones
- Preserve documents (emails, contracts, invoices) and consider early expert evidence if appropriate.
- Consider initiating alternative dispute resolution (ADR) if settlement is feasible.
What This Means for Corporate & General Dispute Litigation at Penlit & Greyson
At Penlit & Greyson, when we advise clients (businesses, corporate entities, service providers) on dispute litigation, we emphasise:
- Due diligence: Identify at the earliest stage whether a statutory pre-action notice is required (especially in regulated sectors or government/agency claims in Nigeria).
- Correct protocol: Where the dispute is governed by English law (or has an English law element), ensure the relevant pre-action protocol or letter before action is properly handled.
- Strategic timing: A pre-action letter is not just a formality—it’s part of the strategy. It can effect resolution, posture for settlement, or protect costs position.
- Documenting process: Keeping records of communications, responses and adhering to deadlines safeguards your position if litigation follows.
- Settlement-first mindset: Many disputes can be resolved without full court action; effective pre-action engagement often avoids cost and disruption.
Conclusion
In summary, pre-action notices are a fundamental step in corporate and general dispute litigation. Whether mandated by statute (as in certain Nigerian regulatory matters) or required by protocol (as in England & Wales commercial claims), the proper issuance and handling of these notices can significantly affect your case-strategy and cost exposure. Ignoring this step—or getting it wrong—can lead to adverse cost orders, wasted time, or even a risk that the claim is struck out.
If you are facing a potential dispute—whether as claimant or respondent—Penlit & Greyson is ready to provide guidance on whether you need a pre-action notice, how to draft/respond, and how best to proceed to protect your interests. Contact us to discuss your case.
