An effective demand letter is a good first step in communicating your claim to a negligent party. It not only exhibits the existence of your claim, but it also allows you, as a first attempt, to set out the evidence available for the validity of the claim and the competence of your representation.
What is a demand letter?
A demand letter is a formal notice to the negligent party that you, as an injured party, are considering legal action against them. A demand letter normally states how and when the injury occurred, what role that the negligent party played in it that makes them liable, and the money or another form of remedy you are seeking as an injured party.
With an increased backlog of cases and fewer cases being litigated, a demand letter is slowly becoming a good initial tool in beginning negotiations in settling civil and tort litigation. It puts you in a stronger position when negotiating payment from someone who has caused an injury to you. A well-written and effective demand letter will help you get an upper hand.
For more information on when to use a demand letter, you can read our article "Demand Letters: What You Need to Know."
Elements of an Effective Demand Letter:
Before we define the parts of an effective demand letter, let’s go over a few essential steps to prepare for writing an effective demand letter:
• Organize the elements of your case: The biggest rookie mistakes most litigants make is not having a well thought out strategy in gathering and presenting proper evidence and documentation regarding the case. Make sure you have collected all the medical reports, the police reports, any witness statements, and collecting any and all documents that pertain to the case at hand. Remember to prove the existence of a case is more than just stories of what happened, it’s also being able to prove what you are alleging.
• Interconnecting all the documents, claims, and communications: Another fatal mistake that you can make is not referencing and interconnecting all the documents you are presenting and their connection to claims being made. Make sure there is an end-to-end airtight chain made of all the documents presented with the claims made about the case. Haphazard discussion of even proven facts without the proper reference to proper events and documents muddles the communication and weakens your case.
• Use appropriate and professional language and tone: Even though you are the injured party, remember that a demand letter is a legal instrument and it needs to adhere to the rules and regulations that are applicable to it. If you get involved in personal attacks or use extreme language in such a legal instrument, you or your attorney may be liable and can be charged with extortion. So, make sure you state your case, supported by pertinent proof and documents in a professional and objective manner.
• Be Specific: As we will discuss below, there is a proper manner in which a demand letter should be composed and it is essential to stick to not only the structure and language or the letter, but also to be specific in terms of relating presented facts with the proof enclosed. Repetitive claims and other unnecessary details only help to muddle your claims and weaken your case.
• Mention your case and demand for remedy clearly: It cannot be stressed enough that a demand letter being a legal instrument needs to be specific and to the point both in the claim presented and the demand for remedy (in amount or actions) made and state them clearly.
• Be prompt in sending a timely demand letter and set time limits to a response: It is essential that you make a timely demand to begin negotiations to settle your claim and when you send a demand letter to set a deadline for the response from the respondent.
• Structure your demand letter with subtitle and tabs for evidence: Depending on the size of your letter and the related documentation included, make sure that your letter and attached documents are easy to follow with appropriate subtitles to parts of the letter and tabs that separate the letter from the documents or evidence attached with tabs to make it easy to follow.
Structure of a Demand Letter:
In view of the above guidance let’s talk a little bit about how to structure a demand letter. A demand letter is a legal document, so it requires you to include certain elements in it to make it complete and in turn effective. Here are a few things you should include in your demand letter:
A demand letter needs to identify not only who it is addressed to but what is it for and specifics of the matter you are addressing. It is therefore important that you add the following in your letter’s heading:
• Your name, address and all contact information, including your phone number, and/or email address.
• The party it is addressed to. It is very important especially if it is being addressed to an insurance company that you add the company’s name, the adjuster’s name, his or her designation and the street address you are sending the letter to.
• Date the letter is mailed out.
• Write “RE:” followed by the case number or claim number if you are sending the demand letter to an insurance company.
• At the end of the heading, please add “FOR SETTLEMENT PURPOSES ONLY” legibly in bold letters.
Details of the Demand Letter (AKA the Body of the letter):
• The introduction of the letter should clearly state that you are either the injured party or someone with the authority to demand a settlement in the matter. This sets an important precedent in the party that is being addressed that they are entering in earnest negotiations with the injured party.
• Next, a detailed background of the case provides the events and the negligence lays out the basis for the claim and identifies the recipient as the responsible party for the injury caused.
• Following the background, a liability section lays out the claim with legal details providing the legal basis for responsibility for the negligence and provides the legal basis for the claim made.
• Next, the consequences section details the injuries caused due to the negligence and details the overall costs incurred due to the injuries caused. This is a very important section where you as the injured party need to detail the consequences of negligence with details of physical pain and mental anguish caused due to injury and all the losses and expense incurred. These details not only include the expenses caused due to injury in medical treatment but losses incurred since the injury in great detail.
• Finally, you need to include a damages section to your demand letter in order to provide the exact detail of what loss was incurred in exact financial terms due to the other party’s negligence. The damages section must detail all damages due to injury which may include:
1. Medical expenses that may have incurred in the past or expected to incur in the future due to injuries
2. Out of pocket expenses such as deductibles, conditions that are not covered or other costs.
3. Wage losses due to lack of ability to work after the injury.
4. Past or expected future pain and suffering ((emotional distress, mental anguish, etc.)
5. Any damage to your personal property due to their negligence.
As the conclusion of your demand letter, you should tally up all the damages you are trying to recover and demand in writing the total sum of money it would take to settle the matter. Along with the amount it is essential that you provide a time period within which the respondent needs to provide you with a response.
Finally, thank the person you are addressing in the letter and sign your name with a hand-written date at the end.
It is very important to remember that an effective demand letter follows both the important element and structure of the letter described above to bring you quick resolution to your claim.