An Attempt to Avoid a Lawsuit
No one in a lawsuit likes being in a lawsuit. They are a lot of work, not just for the lawyers, but also for the client. They can be expensive and they can take a long time. The details are often available to the public, which can be embarrassing for everyone involved. And they are disruptive to relationships: it’s hard to carry on doing business with someone who is suing you.
So when people hire a lawyer to get them something, the lawyer often recommends trying to avoid a formal lawsuit. And one way she may propose doing this is with a letter asking the other side to voluntarily agree to provide her client what she wants. This letter is often called a “demand letter.”
Why should you keep reading this post about demand letters?
Maybe you want to start writing letters to ask people for things and you want to know some insights about how and why lawyers do that.
Maybe you got a demand letter and you don’t know why a lawyer would send you a letter when they could just sue you.
Maybe all of the other websites were busy and you needed to read something.
Demand Letters Should Communicate the Possibility of Litigation
Ideally, a demand letter should make the other side aware that, if they do not give you something, you may sue them. It should do that in two ways:
First, the letter communicates to the other side that you have hired a lawyer. The mere act of hiring a lawyer is the first step towards suing someone. So once the other side knows you took that first step, they may take the possibility you’ll actually sue them more seriously. And if you hired a fancy lawyer, the letter may also communicate that you are willing to spend a lot of money to get what you want, which may suggest that they will need to spend a lot of money to defend themselves if they do not agree to some or all of your demands.
And second, the letter may set forth a description of your claims, including specific laws and legal citations, that may convince the other side that it may actually lose a lawsuit. A demand letter will rarely convince someone that they are wrong, because few people ever believe that they are wrong. But if a letter contains a good explanation of the relevant facts and law, it can help the other side’s lawyer explain to their client why it may be better to settle than to litigate. This may be because the letter explains that your claims are for a lot of money, and a lawyer may advise her client to settle to avoid even a small risk of paying a large sum. Or it may be because the letter explains a claim that the other side recognizes may be costly to defend, even if it prevails.
Sometimes, demand letters are required. For example, in order to win a lawsuit that alleges a violation of some consumer protection laws, you need to show that you raised the violation in writing to the defendant and gave them a certain time period to address the violation before suing them.
There Are Reasons Not to Send Demand Letters
Demand letters aren’t always a good idea, though.
First, good demand letters can be expensive because it takes a lot of time to make a letter that contains enough details and legal research to convince the other side that (a) your claims could possibly win in court and (b) you’re willing to spend a lot of money and so it’s better for them to settle than to fight you.
Second, the other side could just ignore them. If the other side ignored your demands before you hired a lawyer, they may not take them much more seriously just because a lawyer wrote them out nicely.
And third, the demand letter may contain admissions that you may not like later on. Lawsuits can go on for years, and usually the parties understand the issues much better after studying them for years than immediately after the underlying acts take place. As a result, any written communications about the dispute may contain admissions (either of facts or of legal issues) that you wish you hadn’t made once you have a better understanding of the case. Demand letters are often protected from use as evidence once a lawsuit starts, but not always, and so there is some risk in sending the other side your facts and theories.
Usually a demand letter includes a deadline for the other side to respond. That way, the other side feels some urgency to respond to your demand. And a good demand letter makes clear that you are not waiving any of your rights by issuing the letter.