Have you received a letter of demand? Here’s what you need to know

What is a Letter of Demand?

A letter of demand (LOD) is typically used to notify a party:

• That the sender considers that they have a legal claim against the recipient.
• Of the particulars of the legal claim said to exist against the recipient.
• That the sender requires the recipient to pay an amount, or do (or not do) certain things, in response to the demand.
• Of deadlines associated with the demand.
• That legal proceedings may be commenced if the demand is not complied with.

 

What are the benefits of sending a Letter of Demand?

There are several potential benefits to issuing a LOD before commencing legal proceedings.

For example:

• Legal proceedings, and the associated time, stress and cost, may be avoided entirely if the LOD results in the parties resolving the matter privately.
• It may result in the exchange of evidence that will be useful if legal proceedings are commenced.
• It may elicit a response that will provide insight into what the recipient’s arguments will be if legal proceedings are commenced.
• The preparation of a LOD may assist with preparing a statement of claim if legal proceedings are required.

 

What should you do if you receive a Letter of Demand?

If you receive a LOD, it is generally best not to ignore it. Doing so may result in legal proceedings being commenced against you.

While you may respond to the LOD yourself, there is a risk that you may inadvertently say or do something that may compromise your position if legal proceedings are commenced.

We recommend engaging legal advice early so that you can obtain professional feedback on the merits of the LOD and the most appropriate options for dealing with it.

If you have received a LOD, or consider that you need to send one, feel free to contact the Insurance and Dispute Resolution team at Chamberlains Law Firm.

 

This article was prepared with the assistance of Hazel Erkekaslan.