Before suing another party, having a lawyer draft a demand letter may allow you to achieve a resolution without going to court. Generally, demand letters are a preliminary step that claimants use to induce the other side to take action, typically to make payment. Demand letters can address a myriad of issues including general debt disputes related to loans, contracts, damage deposits and unpaid rent. Keep reading to find out more about how demand letters can encourage faster settlements outside of the formal court process. The litigation lawyers at Kahane Law Office in Calgary, and now in Edmonton, help you try to put a quick end to your legal problems.
Why Send A Demand Letter?
When a dispute occurs, people often find themselves trading angry words, phone calls and emails with the other side. The opposing party may not expect you to pursue the matter legally. A demand letter sent by your lawyer makes the possibility of a lawsuit “real” for the other side. It also notifies the other party that you have retained a lawyer to act on your behalf. Possibly, for the first time, the opposing party will be forced to confront the consequences of failing to comply with yourdemand.
An effective demand letter will provide the parties an opportunity for early resolution to a dispute and avoid the substantial costs, stress and time commonly associated with litigation. Often times, a lawyer sending it on your behalf is enough to motivate the other side to commence settlement negotiations. Lastly, in considering whether to accept a settlement, you should realistically evaluate the risks associated with litigation which includes legal costs, probability of success, and the ability for you to collect on a judgment.
What If I Receive No Response?
Even if the other side fails to respond to your demand letter and you proceed with litigation, the fact that you sent it shows the court that you have made a reasonable attempt to settle the issue without involving the courts. A demand letter is generally perceived by the courts as a sign of good faith and that you are willing to resolve the issue without wasting judicial resources. In these situations, you then must decide if you wish to pursue the matter by filing a claim with the courts. You determine the court to file in based on the financial amount that a person claims against the other.
When Not To Send One
You should not send a demand letter if your limitation period is about to expire. In Alberta, section 3(1) of the Limitations Act, RSA 2000 c L-12 provides that your claim is statute-barred if you fail to sue within 2 years from the date on which you first knew, or ought to have known of the injury complained of. Consequently, if your limitation period expires soon and you wish to pursue legal action, we recommend that you file a claim immediately to preserve your right to sue.
What Should A Demand Letter Contain?
Apart from containing the traditional elements of a letter, such as the date and who you are addressing, the letter may or may not be sent with the phrase “without prejudice”. If so, the letter should not come before a judge should the matter proceed to litigation. For example, the demand letter should address:
- a concise description of the history of the dispute;
- what you are seeking from the other side and why;
- how the other side can respond to your demand;
- how much time the other side has to respond to your demand; and lastly
- the consequences of failing to comply with your demand.
What Not To Include
A demand letter should avoid conveying disparaging or threatening remarks to the other party. Employing insulting language will only fuel the adversarial nature of the dispute and lessen your chances of reaching a mutually agreeable resolution. We strongly advise against any such letter, nor any letter that includes all caps. A demand letter is not an opportunity for you to voice your anger or frustration. Moreover, if sent on a “With Prejudice” basis, if things then progress to a trial, the judge inevitably reads your demand letter. If the judge deems that your letter is antagonistic, this may work against your position.
How To Respond To A Demand Letter?
Before responding to a demand letter, you should consult with a lawyer to understand your options, assess whether the claim is well-founded, determine the reasonableness of the settlement proposal, and weigh the consequences of litigation. Specifically, you can respond by:
- agreeing to the resolution proposed in the letter;
- explaining why you disagree with the demand and negotiate a settlement; or lastly
- stating that you are refusing to comply with the demand.
While ignoring the letter is also an option, you risk the sender taking legal action against you. Further, if the dispute ends up in court, the judge may not view those who ignore demand letters favourably.
Cost Of Demand Letters?
One of the first questions asked, is as to the cost of having the firm prepare and send out a demand. At Kahane Law Office, we are pleased to offer flat rate fees on our demand letters as follows:
- 2 – 5 cost $450 each;
- 6 -10 cost $400 each;
- 11- 20 cost $350 each; and
- over 20 cost $325 each.
Generally, the other side takes your demand letter more seriously if it is drafted by a lawyer. While you initially have to pay a fee for your lawyer to draft it, if you settle, you will likely save more money than if you proceeded directly to litigation. The litigation process tends to be time consuming, expensive, stressful and can result in unpredictable outcomes. Even if you are successful, you may have to pay costly legal fees and there is no guarantee that you will be able to collect on your judgment.
Additional Costs Not In The Flat Fee
Our fee covers the cost of getting the information we need, drafting and sending out the letter. Certain things add to the cost. For example, we charge for:
- courier or registered mail, if requested;
- negotiations with the opposing party or lawyer;
- sending additional correspondence; and
- drafting a mutual release if things settle.
Assistance With Drafting Demand Letters
Always attempt to find a quick, inexpensive solution to legal conflicts. If you are considering pursuing litigation, we are here to help. The litigation group at Kahane Law Office has a wealth of experience in drafting demand letters to expedite settlements and avoid costly litigation. Connect now. Email is often the fastest way to get things going so email us directly here. Alternatively, reach us by phone 403-225-8810 in Calgary, Alberta or toll-free at 1-877-225-8817.