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Clydesdale Bank letter to strike out claim

Received a letter today from Clydesdale Bank solicitor stating that they have requested the court to strike out our claim. They have indicated to the court that if it agrees to strike out our claim they will not seek any of the recovery costs from us to the extent that they might otherwise be entitled to do so.
They have asked us to complete a Notice of Discontinuance by our own volition with 21 days to ensure they wil not seek costs.

Q1 - What do we need to do regarding the court claim?

Q2 - What costs can they seek from us?

Q3 - Do I need to complete the Notice of Discontinuance?

The letter feels very intimidating!

Any advice greatly appreciated.
Mikedr02
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