In British Columbia (BC), demand letters are a common form of communication which are used to settle a matter outside of court.
Demand Letters can be sent to an opposing party to demand payment of monies owed as an alternative or prior step to initiating legal proceedings.
This article will provide information on the basics of demand letters, if they could be useful to you, and how they work in BC.
What Is a Demand Letter?
A demand letter is a formal request from one party to another to induce action. Most commonly, a claimant will use a demand letter to request payment of a debt related to:
- Unfulfilled contractual obligations,
- Outstanding invoices,
- Delinquent/ missed loan repayments.
It is often more effective to have a lawyer send a demand letter on your behalf to the party.
A demand letter from a lawyer may have the effect of letting the opposing party know that you are taking this claim seriously, have sought legal advice on the matter, and are ready and willing to commence litigation if the demand is not met.
Essentially, a demand letter provides the opposing party with an opportunity to resolve the issue without having to incur the cost and time commitment of litigation through the court. An demand letter may also have the effect of beginning a discussion between you and the opposing party to settle the outstanding debt at a negotiated amount.
What Is Contained in a Demand Letter?
A typical demand letter includes the following information:
- a succinct description of the problem or issue that needs to be resolved (including proof of the claim),
- a demand for specific relief (in other words, what relief are you seeking and why?),
- a deadline indicating when the demand must be met, and
- a statement as to consequences of not complying with the demand – For example: that you will pursue legal action if the demand is not met (or any other consequence of failing to respond to the demand letter).
It is recommended that you not include any threatening or derogatory remarks because it will not aid the process of reaching a negotiated settlement. In fact, it maybe detrimental to it.
It is not always necessary to engage the services of a law firm to send a demand letter – this type of letter can be written by anyone in an attempt to demand settlement. However, if you have made previous attempts to request action from the other side with no success, you may want to consider having the demand come from a lawyer as the next step of “raising the stakes” or escalating the seriousness of the matter.
As demand letters are often written as a precursor to legal action, it might also be worth consulting with an experienced lawyer who can provide legal advice on your situation, rights, and chances of success. These factors may guide the tone of your Demand Letter for the best chances of having the other side respond to it, which is the ultimate goal of a demand letter.
When Should You Send a Demand Letter?
In most cases, a Demand Letter is sent before litigation begins and before filing any formal documents with a court. A demand letter alerts opposing parties of your desire for compensation or other remedies before bringing the matter to a court.
A Demand Letter can influence whether pursuing litigation will help both sides get what they want out of the situation.
What Happens When a Demand Letter is Ignored?
If you send a demand letter and the opposing party does not respond, all options remain available to you.
- You can decide to no longer pursue the matter (Ex. In situations where the amount involved does not outweigh the time and expense of going to court);
- You can follow through on the consequence you outlined in your letter (Ex. Commence a court claim); or
- You can send a follow-up demand, provide an extension of timeline for their reply or compliance with the demand. Or attempt to communicate by some other means.
A Demand Letter is important to send in any event pre-litigation so that your efforts to settle the claim outside of court are documented.
If you do subsequently decide to pursue litigation, the demand letter serves as proof to the court that you took reasonable steps to attempt to resolve the issue and enter into a negotiation without involving the Court. This may be considered by the Court in the granting of a costs award if you are ultimately successful.
It is important to note, however, that there are pros and cons to weigh before pursuing your claim in a court if a demand letter is ignored. A consultation with a lawyer is recommended as all individual situations will differ.
Demand letters are useful documents if you are looking to settle a dispute or settle a monetary claim outside of court. This can ultimately save both parties time and money if the matter does not have to go to court.
Within demand letters, it is important to describe the legal claim in detail, demand a solution (i.e. monetary compensation), and outline consequences if demands aren’t met by a specific time frame.
While the idea is to reach a mutually agreeable solution between the claimant and the opposing party, there is always the possibility that the demand letter will be ignored. In those instances, you may have to weigh the pros and cons of pursuing litigation to settle the claim or resolve the dispute.
If you do end up filing a claim with the Courts, a Demand Letters can serve as proof that you took reasonable steps to attempt to settle the matter outside of Court. Showing a willingness to avoid costly litigation and not wasting valuable judicial resources may work in your favour.
If you are considering sending a demand letter or pursuing litigation, Solimano Law is here to help. To speak to a lawyer about a claim and whether or not sending a demand letter would be a helpful next step, contact us today.
Disclaimer – The information contained herein is of a general nature. It is not intended to be legal advice and it is not intended to address the exact circumstances of any particular individual or entity. No one should rely on or act upon such information without receiving appropriate professional advice and without a thorough examination of their particular situation. Please contact our office if you have any questions with respect to the content of this entry, this website, or our Terms and Conditions .