Statistics show that demand letters initiate a successful resolution in as many as one third of all potential disputes. Therefore, before you decide to sue someone or their insurer, it is wise to consider sending him/her a short and well-written letter where you detail the facts, and demand a settlement. Often that is all that will be needed to settle your dispute.

Most people who know they owe you money expect you won't seek legal action. However, these same people can often be quick to respond when they receive a demand letter, laying out the reasons why s/he owes you money and stating that if you fail to get satisfaction you plan to go to seek legal remedies (whether in small claims court or the local district court). For the first time, the other party must confront the likelihood that you won't go away but plan to have your day in court. They must face the fact that they will have to expend time and energy to publicly defend their position.

What makes a good demand letter?

First, review the history of the dispute. Begin by detailing the facts of the accident. This may seem a bit odd since the other person knows the story. However, If you end up in court, the letter can usually be presented to the judge, who doesn't know the facts of your dispute. Additionally, unless the other party writes back disputing the facts, (s)he can be argued to have agreed to them.

Remain calm, avoid using emotional terms and be polite. In particular, avoid making personal attacks or derogatory comments of the other person, no matter how deserving you think s/he is. The more disparaging you are, the more you invite the other person to respond in a similarly angry vein which is not conducive to an amicable settlement. Remember, your task is to get the money you are owed without having to go to court, not to get back at the other person.

Detail the costs you have incurred, medical and otherwise, as a result of the accident. Provide clear copies of each invoice and cancelled check. Demand a response by a certain date, instead of a number of days or weeks later. If you don’t get a response, then the ball is in your court to seek legal remedies.