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The dos and don’ts of demand letters

How to use organization to get what you want

Occasionally, Milwaukee lawyer Mitch Moser receives a demand letter that’s too demanding.

“When they’re nothing more than threats, blame and talk about how horrible my client is as a person, I know it probably felt good to write, especially if their client is cc’d,” said Moser, a commercial litigator with Quarles & Brady LLP. “But it doesn’t move the case forward.”

In rare instances, the “saber-rattling” letter is effective, but more often, Moser said, he gets better results with the “polite and constructive path.”

Done right, demand letters pave the way toward resolution. Here are litigators’ tips on how to use demand letters to get what you want without shutting down communication.

DON’T skip them

Mike Waterman, of Mudge, Porter, Lundeen & Seguin SC in Hudson, said that once an insurer had been notified that a claim exists, the parties share a common interest in settlement.

“There’s unity in the objective,” he said. “I really shake my head when some plaintiffs’ lawyers just put the case into suit and figure they’ll sort it out later, because if you want to get the case settled, this is a good time to do it.

“Everyone should at least make the effort to put together a demand letter.”

In rare cases, Moser said, there are compelling strategic considerations justifying suing first and asking questions later, such as if there’s a dispute regarding venue or jurisdiction and your client benefits by filing first. More often, though, it makes sense to make the demand in writing or, at a minimum, to pick up the phone.

DO tailor them

Unless your practice is high-volume litigation where the facts tend to be similar and the law is fairly straightforward, a cookie-cutter approach won’t cut it for demand letters.

Consider the audience. If the primary reader is an insurance adjuster, Waterman said, keep in mind that these days adjustors are pressed for time.

“Adjusters don’t like incomplete or sloppy demand packages,” he said. “They don’t like it when they have to do legwork. And they don’t want to be in the position of trying to define what the plaintiff’s claim is all about.”

Madison lawyer Mike Riley, of Axley Brynelson LLP, said the adjustor’s role had changed over time. Many years ago, some adjustors had law degrees; now, most don’t. They tend to have less discretion and authority than previously. They tend to be younger, have less training and are more beholden to programs such as Colossus to evaluate claims.

What that boils down to, Riley said, is, “I think there’s been a strong tendency over the last 10 years or so for adjustors to look at any negative in the case and focus on it almost to the exclusion of everything else. So I think it’s really important to try to defuse that in the demand letter.

“It won’t erase the issue, but it’s better to deal with it head on.”

DO organize

The typical structure, Moser said, is: the facts; the cause of action, the defendant’s legal responsibility and damages; the relief sought; and the consequence if no action is taken. There can be great variety within that general framework, depending on whether the dispute is fact- or law-based, for example.

Waterman said he liked the use of headings and subheadings to break up key parts. It’s also helpful, he said, to reference within the body of the letter the attachments supporting the claim.

“It helps the adjustor quickly find information,” Waterman said. “And if the attorney takes the time to organize it neatly with tabs, it shows the attorney is serious about the claim.”

DO simplify

“I approach it as I would a legal brief, with short, simple sentences,” Moser said. “I want it to be readable and ensure that the point I’m trying to make is coming across, so the reader isn’t getting stumbled up on legalese, jargon or long clauses.”

DO be accurate and complete

It’s worse for a plaintiff if his or her counsel omits crucial, potentially damaging information then if the insurer discovers it on their own, Waterman said.

A missing medical record will be presumed to contain information that’s harmful to the case. Moreover, the attorney’s credibility is on the line.

“Your reputation will follow you,” Waterman said. “Adjustors talk to each other. They belong to associations and they move around from company to company. So if you lose credibility or gain a reputation of always being over the top or making unreasonable demands, that’s going to be carried with you.”

DO objectively humanize the plaintiff

Use concrete examples to describe the plaintiff’s character, Waterman said. Don’t call him or her a community leader, instead specify on which community-oriented boards they serve.

When describing the plaintiff’s pain, it’s preferable to explain how his or her life activities are affected. For example, if a back injury makes it difficult to sit for long periods of time, describe how that interfered with a recent business trip.

Along these lines, Riley said, avoid using the numbers scale to quantify pain because even that is subjective and it’s especially ineffective if the reader never has experienced chronic pain. Rather, tell what a plaintiff must do to address the pain — list the medications, both prescription and over-the-counter; or describe the exercises that he or she does to alleviate pain.

DON’T threaten with your deadline

Sometimes adjustors are so busy and/or they have to get authority to respond, so they might not reply within 30 days, which is the customary timeframe. Waterman said it was OK to ask for a response within 30 days, but you don’t need to spell it out that the case will be filed if you don’t hear anything by then.

Rather, calendar it for 30 days out, make a call at that time if there’s no response and then let them know that you plan to file if the follow-up call doesn’t yield any movement.

It increasingly is common to put cases into suit, however, Riley said. Whereas he used to file about a quarter of his cases, now it’s 75 percent or more, he estimated.

“So maybe the demand letter isn’t as critical as it used to be, but it isn’t unimportant,” he said. “Just the other day I settled a case for a lot more money than I thought they’d pay and I think in part it’s because the demand letter was well-put together.”


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