Explained: Why demand letters matter in a lawsuit

Being sued can be one of life’s most stressful experiences. It is as time-consuming as it is mentally exhausting.

Ignoring a demand letter, a summon or a lawsuit will not make it go away.

It is common for demand letters to be ignored or for the defense to delay a response, especially if they believe the sender may not follow through with legal action.

But, according to a legal expert, the move might be costlier than one might think.

Peter Wanyama, a legal compliance specialist, avers that demand letters are important to lay the basis for your suit, as well as give notice to the other party.

Further, in case one wins the case, where a demand letter is absent, one will not be entitled to a cost compensation.

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“Before you file any case, you have to issue a demand letter. This will notify the other person of the intention to sue. Usually, if you do not issue the demand, later if you win the case, you will not be entitled to costs. The demand is important to lay the basis for your suit and giving notice to the other party which in law is very important,” says Wanyama.

What happens when you ignore a demand letter?

Should one decide to ignore a demand letter, the case can continue in their absence, taking away their right to representation in court.

According to Wanyama, if you are sued, you will need to respond to the demand letter as it allows room to solve issues without going through the court if one admits to the liability.

Further, by responding to the demand letter, one might be able to buy some time as the notice is usually served two weeks before a suit is filed.

In case a demand letter is ignored and the case progresses to court, the judge or magistrate will look at the evidence and issue a judgment on whether one is liable or not.

If the defendant is found liable, they will be required to pay any cost that one might have incurred in filing the case and any other cost once approved by the court.

Further, in case of a delay in paying a liability, one will pay up to 14 per cent of the money they owe at the time the claim arose, plus the interest and costs.

However, if a demand letter was never issued in the beginning, then some costs might not be compensated and in return, one will only pay the liability and the interest accrued.