Through you lawyer, have you ever received a demand letter?
If you have ever received one, there is no need to be frightened.
In this article, we will tell you what a demand letter is, how to write one, and what to do if you get one.
What is A Demand letter?
A demand letter is a written request that asks another party to do something specific, such as pay a debt, fulfil a contract, or stop a harmful activity.
A demand letter can help settle a conflict without involving the courts, or it can show that you tried to negotiate in good faith before suing.
It is good legal practice to send a demand letter before instituting a legal proceeding against a person who has wronged you.
For example, certain statutes will require prospective plaintiffs to send a demand letter to prospective defendants before they can claim a viable cause of action under the statute.
A cause of action is an element that clients must prove to be entitled to any relief that they are seeking.
A demand letter is used by a client’s lawyer to initiate civil cases, i.e., cases where the rights of a person have been violated by another person.
A demand letter is drafted by an attorney on behalf of the person whose rights have been infringed.
The main purpose of a demand letter
A demand letter outlines the dispute between the two opposing parties.
The letter is usually addressed by the client’s lawyer to the rights infringer or a prospective defendant.
The most important part of a demand letter is warning the recipient to cease taking a certain action.
In addition, the letter will at times specify actions and a time limitation for reply that a recipient must abide to avoid the next step.
If the recipient of a demand letter does not take the necessary steps that the client wants, then litigation will follow.
Furthermore, a demand letter can be a piece of useful evidence to prove good faith and that a party was willing to negotiate and take responsibility for their actions.
Contents of a demand letter
A demand letter should highlight the types of rights violated.
The violation should ideally be reflected in the description of the day, time, location, and events that led up to the incident.
The letter should state that the violation caused by the recipient has led to a material loss for the victim.
Finally, the conclusion of the demand letter should address the possible solution to the violation, failing which legal recourse will be the only option.
What happens after my lawyer sends a demand letter?
After a lawyer has sent a demand letter, several occurrences can happen.
First, negotiations between the lawyer and the recipient of the demand letter will begin.
The outcome of a negotiation is that the lawyer could settle the case and secure compensation for their client if the recipient agrees with the demands. Or, the negotiations can fail.
When negotiations have failed or if a recipient does not respond to the demand letter, the next step will be for the client’s lawyer to institute a legal proceeding against the right infringer.
On the other hand, if the demand letter is compelling and persuasive, the recipient will decide to settle.
Several factors affect the time that a settlement process can take.
In the case of personal injury claims, the following factors will determine the length of the settlement:
- The workload of the recipient’s attorney. In some cases, an insurance company may have a lot of paperwork, and settlement may take time.
- The cause of action. A legitimate cause of action will make the recipient want to settle as soon as possible to avoid litigation costs and inconveniences.
- Contributory negligence. This is a scenario whereby a prospective plaintiff contributed to the personal injury they have suffered.
- In some states, such as New Jersey, a plaintiff who is potentially at fault for the accident and injuries will negate the amount of compensation they can receive.
If they are at fault, they may not be entitled to any compensation, depending on the degree of fault.
A demand letter is meant to convince a recipient that their chance of success in litigation is low.
The main purpose is to make the recipient fold and negotiate.
A properly drafted demand letter will inform the recipient that failure to negotiate will be detrimental to them.
For example, failure to negotiate may expose the client to a litigation process that will be cumbersome in terms of time wasted and legal expenses involved, such as hiring a lawyer.
Remember, the chief purpose of a demand letter is to usually state the harm that the client has endured, the relief they are requesting, and a threat to the sender of intentions to accelerate a dispute via a lawsuit if an amicable solution cannot be reached by both parties.