I’ve Just Received a Demand Letter, What Now?
In the modern age of email and text messaging, written letters and post have become the domain of advertisements and bills. However, worse than an early bill in the mail is the unlooked-for demand letter, which states in no uncertain terms that you have wronged someone and they want to be paid for it. If you’re like most people, this is the first time you’ve received such a letter and you may not know what to do with it.
What is it?
It may be more important to know what a demand letter is not first. A demand letter is not the start of a legal action in the court system. Rather, it is a private communication between individuals or businesses laying out what one side alleges has happened and what that side would like to see done about it.
A demand letter typically follows the following structure: introduction, facts, legal conclusions, and demands. The introduction is where the demanding party introduces themselves and explains in broad strokes what the letter will cover. The facts section then sets out everything that led to the current problem. This section is the longest and most detailed, explaining how things began, how they progressed, and what was the final act that triggered demanding a remedy. The letter will then go through the legal conclusions, which typically set out that a wrong has been done and that the letter-writer is owed compensation under either common law or statutory law. Finally, the letter will list out the demands which may include the payment of money, removal or return of property, ceasing to interact with the letter-writer going forward, or some other form of relief.
Why is it used?
A demand letter is very similar to a Statement of Claim, but it is used before proceeding to litigation for a variety of reasons. First and foremost, a demand letter may avoid the need for litigation entirely if the recipient agrees with all the facts and will meet the demands or negotiate down from the demanded relief. This avoids litigation and the associated time and expense of litigation. The second reason to use a demand letter is that it is a soft trial run of actual litigation. The person sending the letter may know that the other side will not meet their demands or negotiate, but they may learn something through the dialogue and any responding letter back. This gives them information and helps prepare for their soon-to-be-issued Statement of Claim. The third reason demand letters are used is that sometimes a person does not want to litigate for personal reasons, such as the others involved are family or friends or they already know they don’t want to spend the money on litigation, but they hope that by sending the letter, some relief may be obtained. All three reasons are perfectly valid and good faith reasons to send a demand letter.
What should you do with it?
A demand letter will typically tell you how long you have to respond to it before the sender will proceed to litigation. You then have three options for how to proceed: 1) respond yourself to the sender and see if a deal can be worked out; 2) retain a lawyer to respond on your behalf; and 3) do not respond and wait to see if the sender does proceed to litigation. Each course of action has merit depending on your circumstances. If you agree that something is owed by you to the sender, you may be able to reach an agreement on your own without a lawyer assisting you. But if you think that you do not owe the sender anything, it is best to retain a lawyer and get their opinion of the law and likely outcomes of litigation. That lawyer can then recommend responding to the letter with a phone call or in writing or, in rare circumstances, not responding at all and waiting to see if litigation will begin.
In Summary
With expertise, a sharp sense of how to evaluate a claim, and a team of experienced lawyers and staff behind them, a good lawyer can help their clients respond to a demand letter and choose the best course of action to go forward. At Hummingbird Lawyers, we bring such skills and individuals to each case and keep in mind not only the legal strengths and weaknesses of each case but also the financial and temporal realities and practicalities to help our clients find their success. For any questions or to arrange a private and confidential consultation, please contact Ian Donovan, Associate for the Firm’s Civil Litigation Department at 905-731-1911 ext. 203, idonovan@hummingbirdlaw.com or complete the form below.
