Drafting demand letters

One way to think of a demand letter is as an attempt to initiate an out-of-court resolution of a dispute. As such, it might be helpful to keep in mind that negotiated dispute resolution is usually most successful in an atmosphere of mutual willingness to listen to the other side’s concerns, and a spirit of attempting to satisfy both sides’ interests. The problem with most demand letters–maybe because they’re usually drafted by lawyers–is that they do not seek to create that atmosphere. Even though most demand letters invite a negotiated resolution of a dispute, they usually read more as an ultimatum, and many of them seem to leave little room for negotiation.

Most demand letters employ language of threat and intimidation. They tend to set forth an exaggerated description of the recipient’s conduct; they list a multiplicity of available causes of action; and they promise the party being served with severe legal consequences in the event they do not give in to the other party’s demands. It’s a tried-and-true template, one I haven’t abandoned entirely myself, because it still packs a punch. The downside of that aggressive approach, however, is that it can provoke angry denials and counter-charges. Many demand letters serve as the opening salvos in a war of words that will probably end up in court, and only much later return to the negotiating table after a lot of costs and pain have been inflicted by both sides. Many are simply ignored.

Recently I had to respond to a demand letter charging a client with various trademark and false advertising violations. I responded by suggesting that the client was within its rights in some areas but was willing to make certain other changes to its advertising materials in order to resolve the dispute. What I got in reply was a new letter, speaking in the same terms of threats and ultimatums, but demanding only that we do exactly what we had offered to do in response to the original letter! We made the changes, I wrote back thanking the trademark holder’s attorney for his cooperation in successfully resolving the dispute for the benefit of both sides, and that was the end of the matter. The point being that lawyers have a hard time getting ourselves out of the mindset of claims and threats and sanctions, and into a different mindset of cooperative dispute resolution. Another point being that demand letters, even though they purport to seek an out of court resolution of a dispute, still operate in the shadow of the court system.

What I’m suggesting is that we might be squandering an opportunity. We ought to try being more creative in framing demand letters in a way that suggests a positive solution to a problem. We ought to consider trying to engage the other side in a conversation to solve a common problem. That usually requires some acknowledgement of the other side’s interests, and that can be done without appearing weak.

We should recognize that to frame a dispute only as a legal claim might be an unduly narrow way of looking at the problem. Discussion of both parties’ other concerns and interests could open up other ways of potentially resolving the dispute.

We might also consider asking the opposing party to agree that the parties have a conflict, instead of inviting the opposing party to disagree with our characterization of the alleged violation. That would start the parties down a path of agreement, even if the only common ground that can be found at the outset is to the proposition that the parties have a dispute that needs resolving.

Another positive way of framing a demand letter is to invite the other side to suggest a means of resolving the conflict, instead of just demanding that they pay up, or stop doing whatever it is they are doing. That way they are invested from the outset with part of the responsibility for solving the problem.

Granted there are some situations where the stakes are such that you must demand that the other side agree to your terms or face the consequences, but you have to recognize when you take that approach, that if they don’t back down immediately, you are just headed for litigation. For a large number of contested disputes it might be more productive to suggest right up front that you are interested in sitting down and resolving the dispute in a way that may satisfy both side’s concerns and interests. The vast majority of contested disputes are going to end up in a negotiated resolution eventually anyway. It only makes sense that they start down that path from the outset.

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