What is a Demand Letter?

The short answer to this question is that a demand letter is a letter that demands something. While that might be an oversimplification, it’s the truth!

Usually, the demand is for payment for an outstanding debt, a breach of a contract, or to recover monetary damages arising from harm done by the person or entity receiving the demand.

What Information is Included in a Demand Letter?

Demand letters can be short and concise or long and full of information. Each demand letter will be tailored to fit the situation for which it is being written.

At VanDerGinst Law, we often use demand letters to help settle personal injury cases, and our demand letters tend to fall somewhere in the middle of that spectrum.

Usually, a demand letter contains a brief summary of the incident that took place, such as what an outstanding debt is for and who accrued it, how a contract was broken and the damage it caused, or the facts of an auto accident that resulted in someone getting injured.

The demand letter also includes information about the cost the injured party incurred due to the incident that took place. This could include things like fees that accrued due to a bill being past due, the effects a broken contract had on a supplier, or the hospital bills incurred by someone injured in an auto accident.

Should I Write a Demand Letter or File a Lawsuit?

Typically, lawsuits are time-consuming and expensive for all parties involved. Sending a demand letter as a first step in a disagreement that could end in litigation is a way to try to wrap things up without the parties needing to go to court and suffer through the trial process.

If you send a demand letter and the other party decides to negotiate a settlement with you and reach an agreement you’re happy with, you’ve been able to win your case without ever having to step foot in a courtroom.

Do I Need to Hire an Attorney to Write a Demand Letter?

While there are no laws against sending your own demand letter, an attorney has a professional degree and years of experience that will likely make their demand letter for you far more effective. Attorneys that work with breach of contract or personal injury cases on a regular basis have often found a formula for their demand letters that work.

They also have the advantage of being familiar with things like contract law and personal injury law that many people do not.

Attorneys may also have experience working with specific insurance companies and adjusters within those companies and know what information they will ask for and how they tend to negotiate.

Lastly, attorneys are familiar with rules specific to your county or district and the professional norms within the industry. All of these things make hiring an attorney to protect your interests and guide you as you work through the process worthwhile.

How Much Will It Cost to Hire an Attorney to Draft a Demand Letter?

That will depend on the attorney, their firm, and their hourly rate. Many law firms (including VanDerGinst Law) will agree to take your case on what is called a contingency fee basis.

Rather than expecting payment upfront to assist you with your case, your attorney will defer payment until you receive a settlement or go to trial.

When an attorney agrees to take your case on a contingency fee basis they will generally charge a percentage of your settlement amount as well as reimbursement for fees they incurred for things such as ordering medical records or police reports.

However, you won’t pay a dime unless you win your case.

What Do I Need to Prove in My Demand Letter?

Usually, a demand letter will include exhibits or supporting documents. This could be police reports, insurance policies, contracts, medical bills, and records, or anything else. These show the person receiving the letter that should you choose to take this matter to court—you can prove that you were wronged.

Oftentimes the person or entity receiving the demand letter realizes after reviewing the letter and supporting documentation that a jury would find that you were wronged and would side with you.

In those instances, it is easier and cheaper for the person/entity that harmed you to simply negotiate a settlement. They then avoid hiring an attorney and paying them to work through a whole court case and trial. That is the goal of a demand letter.

Your attorney should be able to gather or help you gather supporting documents to include with your demand letter.

What Happens After a Demand Letter is Sent?

After a demand letter is sent there are a few things that can happen. It’s useful to know that often it takes a few weeks to receive any response to a demand letter at all. You shouldn’t let that discourage you.

If the demand letter is sent to an insurance company, they often have to review the letter along with any supporting documents. They then have to request approval or a monetary amount to work with to settle the matter.

Everyone hopes to receive a response to their demand letter in the form of willingness to pay up and apologize. It is rare that the person/entity that receives your demand letter pays what you ask for and the matter is resolved.

More often what happens is rather than payment of the demand amount people receive a counteroffer to their demand amount. Negotiations follow. When a settlement amount is reached that both parties and all involved attorneys feel comfortable with, the matter is resolved.

If no resolution is possible through negotiations the matter may have to move onto the court and become a lawsuit.

Other demand letters may receive a response that states that the person or entity who receives it does not believe they have any liability in the matter and therefore are not going to make an effort to settle the matter this way. Some demand letters receive no response at all.

A demand letter that doesn’t result in a settlement between the parties often moves on to court.

Have You Been Injured in an Accident That Wasn’t Your Fault?

If you were involved in an accident that wasn’t your fault and you’re not sure what to do, contact a personal injury attorney.

Dealing with the insurance company can be frustrating and confusing. Let us handle the details while you focus on recovering from your injuries.

At VanDerGinst Law, we have over 30 years of experience dealing with personal injury claims and demand letters.

If you’ve been injured, we’d be honored to help.