What is a demand letter?

Demand letters are an important part of resolving personal injury claims and other legal disputes. A demand letter is an opportunity to explain your claim, why you believe your claim is worth a particular resolution and initiate attempts to settle or reach a compromise in your dispute. A successful demand letter can result in a settlement between you and the other parties involved in your claim. Settling your case after making a demand is an alternative to taking your case to trial and letting a jury decide what you deserve. Agreeing to settle your claim instead of litigation can help reduce the costs, inconveniences and risk involved. Writing an effective demand letter involves knowledge, experience and a compelling argument for your claim.

Why send a demand letter in a personal injury case?

Before we get into the mechanics of drafting and sending demand letters, let’s talk about why we send demand letters. As personal injury attorneys, demand letters are part of the process of resolving insurance claims. It is our opportunity to present a complete and compelling explanation of our client’s claim and why our client is willing to settle an automobile accident claim or other personal injury claim for a specific amount. In most cases a demand letter is the introduction to a demand package, which includes the demand letter and all of the supporting documentation. This may include medical records, medical billing, proof of lost wages, photographs, traffic accident reports and a letter from our client explaining the impact the accident had on their life.

In most cases, at least in tort states like Colorado, the demand letter is the adjuster’s first opportunity to get a complete picture of our client’s injuries and damages. At our law firm we maintain communication with adjusters throughout a client’s case but in most cases we do not send proof of damages through your case. Our attorneys want to make an impactful, persuasive and complete presentation of the full value of a client’s personal injury case. For adjusters, receiving a demand package signifies our client is ready to begin negotiating their claim and it is time for the adjuster to evaluate your claim in full. Without receiving a demand and supporting evidence, the insurance company has no incentive or ability to fully evaluate your claim.

Why not file a lawsuit before sending a demand letter?

Some personal injury clients ask our attorneys why we don’t file a lawsuit and then send a demand letter or make other attempts to settle their cases. Sometimes a surprise lawsuit can be tactically useful to a client’s case; however, in most cases it does not benefit the client. There are several reasons for this:

• Litigation is expensive, even early in a lawsuit. If we can settle a claim without incurring costs unnecessarily, it puts more money in a client’s pocket.
• When we disclose the evidence supporting your claim for damages in litigation, the insurance company will perform the same evaluation it would have before filing a lawsuit. There is no trial by surprise in Colorado.
• Litigation involves a timeline of procedures that must occur. Filing a lawsuit kicks off a judicial process that requires all parties and their attorneys to perform certain steps at certain times. Due to those time constraints, your attorney may be forced to spend money to hire experts, pay for depositions and other steps that can add thousands of dollars of costs to your case. It is often better to engage in pre-litigation settlement negotiations and try to avoid those costs and deadlines.
• Filing a lawsuit can make settlement more difficult. Under most insurance policies the insurer has a duty to hire defense lawyers for their insureds to defend a lawsuit. The defense attorney may have their own motivations for not settling cases right away, such as wanting to bill more hours or believe they can win the case at trial despite the adjuster’s evaluation. By attempting settlement negotiations before a filing a lawsuit, your attorney has the chance to first negotiate directly with the adjuster based upon the insurance company’s evaluation.

Your personal injury attorney will carefully consider your case and develop a strategy appropriate for your unique case. At Front Range Injury Attorneys it is never our goal to risk our client’s case for our benefit or belief that we can win a trial if it is not financially advantageous for our client to proceed down that path.

What should you include in a demand letter?

A demand letter should be concise but fully explain your claim. In most cases you will send a demand letter to an adjuster or attorney who has some knowledge of your claim; however, your letter may end up in the hands of other people in a law firm or insurance company who are unfamiliar with the details of your situation. In a detailed demand letter, one goal is to allow a person with no knowledge of your dispute to read the letter and have a basic understanding of the facts of the accident, the amount you demand to settle the dispute and the factual basis for your demand. A demand letter will often include:

• the date of the accident
• an explanation of the accident or incident
• a discussion of why the party or insurance company is liable for the accident
• the amount of money or other relief you demand from the defendant
• the factual support for why you are legally entitled to that relief
• the deadline to concede to your demand and reach an agreement
• your contact information

Some people write bombastic or aggressive demand letters. You may be irritated your case has not settled but you should remain polite and professional in your letter. Negative, abusive, or exaggerated language is more likely to increase tension and delay resolution. A demand letter is not an opportunity to insult or harass a participant in your case–no matter how badly they may deserve it. A professional tone lets the defendant or insurance adjuster know if negotiations fail, they may face a likeable plaintiff at trial.

How long does a demand letter need to be?

The best answer is that a demand letter needs to be as long as necessary to accomplish your goals. In many cases a letter may only need to be one page. Some demand letters exceed ten pages in complex and high value cases. There is no exact length you must target. Excessively long letters risk going unread.

Your demand letter should be concise and direct to your point but include all the necessary details. Most demand letters are one or two pages. They should be written in paragraphs with a clear and simple format. Use a standard font like Times New Roman and avoid using stylistic flourishes like bold and underline unless it makes the letter easier to read. Use a standard heading with the date, your name and address. Conclude the letter with a professional closing.

How to send a demand letter

In most personal injury claims, you should address a demand letter to the insurance company or law firm representing the defendant. Sending your letter directly to a defendant may delay getting it to somebody empowered to consider your demand. If an insurance company has an open claim for your case, it is likely the adjuster who will evaluate the demand and consider how to proceed.

You can always send demand letters by mail, and certified mail may help you track the receipt by an insurance company. If you have extensive medical records or other documents, it can lower the cost of mailing the demand package by sending the supporting documents in electronic form with a paper copy of the demand letter. Many insurance companies allow demands to be sent by email. If that is an option, it will put the demand in the adjuster’s hands quicker.

What happens after you send a demand letter?

Once you send a demand letter, the recipient must have an opportunity to review the demand and consider a response. The recipient may accept your demand and settle on your terms. If that happens, you case will conclude shortly after with an exchange of a settlement release and tendering payment. In most cases the recipient will reject the demand and offer an alternative resolution. In car accidents and other injury claims, that usually entails extending an offer of less money than you demanded.

If you receive an offer in response to a demand, you may choose to accept the offer or continue negotiations. Negotiations may continue for a short or long period of time. If you can reach a compromise with the recipient, then your case will come to an end. If no compromised is reached, you will have to decide to accept the last offer, file a lawsuit, or walk away with nothing.

Should I hire an attorney?

Demand letters can be powerful tools to reach a fair settlement in your case. Your demand letter sets the tone for negotiations and gives the recipient an insight into what litigation may look like in your case. A strong, well written and compelling demand letter can help an adjuster or defense lawyer evaluate your case higher than they otherwise might. Lawyers with experience drafting demand letters and negotiating injury claims understand how to present persuasive demands and craft demand letters geared towards the mindset and procedures of opposing parties. Your lawyer can also represent you in mediation or trial if negotiations prove unsuccessful.

You should talk to a Denver personal injury attorney at our law firm before sending a demand letter. Our attorneys can make sure you pursue full and fair compensation for your case. We will thoroughly evaluate your case to make sure your demand includes all of the damages sustained. Our attorneys can talk to you about strategic considerations and what your case is worth.