**Disclaimer – these articles are just general sharing and is not intended to be legal advice. If you do want legal advice, we will need to look at the facts of each case to render such advice accurately.
At times, you may hear others talk about getting a “lawyer’s letter”, or that they want to issue a “lawyer’s letter” against others. While getting such a letter may be distressing to the receiptient (or exciting), it really depends on what is written in such correspondence. Quite likely, if you receive such a letter for the first time, it is a “Letter of Demand” (“LOD”). Such a LOD is simply a letter written on behalf of another party to demand for certain things, for example, repayment of a debt, or payment of monetary losses arising from an accident.
There is no need to panic when you receive such a letter. Here are five things that you ought to know about a LOD.
1. You have not been sued (yet).
The Letter of Demand is not a court document (yet). What starts court action formally is an Originating Summons or Writ of Summons. What the LOD does is to demand and exert the rights of a person (or company). What you need to do is to read the letter carefully and understand what the other party is exerting, and whether you agree to meeting the demand.
However, in some cases, the LOD is a pre-requisite for certain proceedings. For example, if a creditor wants to consider taking action to apply for your company’s insolvency, the letter of demand is required under the law to reflect that there is a debt that is due and a demand for your company to pay. In such cases, the Court has to take into consideration whether there was such a demand had been made.
2. There is no strict need to respond to the LOD, but there might be consequences
There will be a deadline written in the LOD for a response. However, it does not mean that you need to respond. That said, this will require a calculated move on your part. Not responding to a demand may lead to an action taken out against you, as there is no negotiations between parties. The type of action to be taken out depends on the circumstances of each case, be it a breach of contract, bankruptcy proceedings on the inability to pay, tort (e.g. liability from causing injury from negligence).
You may wish to consider if you want to formally negotiate with the other party, ignore the LOD, or simply meet what was demanded. If unsure, you may wish to consult a lawyer on your options.
3. A letter of demand is usually drafted by a lawyer, but is not always so.
A LOD does not have to come from a law firm, although it is typically taken more seriously when it is. Here are some considerations on whether you would wish for a lawyer to issue such a letter:
- Cost / Benefit – A law firm typically charges about $300 for a letter to be issued. This includes due diligence on the lawyer’s part to make sure that what is claimed for is reasonable and within your legal rights. That said, if what you are demanding for is significantly lower, for example $50 that your friend owes you, you may be better off demanding the repayment through other methods.
- Purpose of issuing the LOD, and it does not have to be about money – At times we may feel aggrieved about a certain situation, at other times we may have suffered actual monetary loss or physical injury, at times, it is both. It is important for the LOD to clearly state what is demanded. If it is about a defamatory post, then perhaps a letter demanding the other party to take down an internet post may be in order. It really depends on you want and whether you are within the law to demand for it.
- Deadlines – a typical LOD would include a specific deadline for the recipient to respond. A reasonable number of days ought to be set aside for the recipient to respond. If the recipient does not do so, then the issuer must think of his/her next steps.
- Intended next steps after issuing the letter of demand – depending on the purpose of issuing the letter of demand, the issuer should also apply his mind to what his next steps are. Sometimes the purpose of the letter of demand is to get parties to negotiate in good faith. At other times, the letter of demand is a last chance for the recipient to respond before formal court proceedings are commenced, or for you to approach the relevant institutions for assistance.
4. A LOD may not be the best option for certain situations
A LOD is typically for private actions, e.g. some dispute between private citizens. However, not all actions require a LOD. Take for example the application process of a personal protection order (“PPO”) from the family court – you do not need a LOD demanding a family member not to commit acts of family violence against you. Instead, you may wish to consider your immediate circumstances and report instances to the relevant law enforcement and medical authorities and seek help to apply for the said PPO.
Consider the issue of unfair dismissal. The Employment Claims Act and the Employment Act allows for claims for such cases (if unresolved) to be heard before a judge in the Employment Claims Tribunal (“ECT”). However, the route for the case to be heard under the ECT requires mediation by the relevant parties first, and only if parties fail to resolve the issue, then can the matter be referred to the ECT.
Why are the above important before sending a Letter of Demand?
While a LOD is not a formal court document in most cases, there ought to be a plan before one is issued. A lawyer can help advice on whether you have a reasonable case, what consequences may arise from such a letter and what legal options are available to you (including alternatives to the court process).
If you have any questions, please do not hesitate to reach out via email at kuibao@inkwelllawcorp.com. First consultation is for free.