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Settlement Demand Letter for the United Kingdom

Settlement Demand Letter Template for England and Wales

A Settlement Demand Letter is a formal written communication under English and Welsh law that sets out a party's claim and demands payment or specific action to resolve a dispute. It serves as a final attempt to resolve matters before formal legal proceedings are initiated, complying with the Pre-Action Protocols of the Civil Procedure Rules. The letter outlines the claim details, demanded settlement amount, and deadline for response, while maintaining professional tone and legal compliance.

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What is a Settlement Demand Letter?

A Settlement Demand Letter is a crucial pre-litigation document used in England and Wales when attempting to resolve disputes without immediate court intervention. It should be used when a party has a clear claim against another and wishes to achieve settlement before commencing formal legal proceedings. The letter typically includes details of the claim, supporting evidence, specific settlement terms, and a reasonable deadline for response. This document must comply with Pre-Action Protocols and should demonstrate a genuine attempt to resolve the dispute, potentially protecting the sender from adverse costs consequences if litigation becomes necessary.

What sections should be included in a Settlement Demand Letter?

1. Recipient Details: Full name and address of the recipient

2. Claim Reference: Clear identification of the dispute or claim

3. Claim Summary: Brief description of the claim and its basis

4. Demand Amount: Specific settlement amount being demanded

5. Payment Terms: Deadline and method for payment

6. Legal Consequences: Statement of intended actions if demand not met

What sections are optional to include in a Settlement Demand Letter?

1. Interest Calculation: Breakdown of interest claimed, applicable when claiming interest on amounts owed

2. Previous Correspondence: Reference to prior communications when there has been previous relevant correspondence

3. Without Prejudice Statement: Protection of settlement communications when making genuine attempt to settle

What schedules should be included in a Settlement Demand Letter?

1. Evidence Schedule: List of supporting documents proving claim

2. Calculation Schedule: Detailed breakdown of amounts claimed

3. Timeline of Events: Chronological summary of relevant events

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Publisher

Ƶ

Document Type

Demand Letter

Sector

Marketing

Cost

Free to use
Relevant legal definitions




















Clauses




















Industries

Pre-Action Protocols (CPR 1998): Part of Civil Procedure Rules that sets out mandatory steps parties should take before commencing legal proceedings, including reasonable attempts at settlement before litigation

Limitation Act 1980: Defines statutory time limits for bringing legal claims - typically 6 years for contract claims and 3 years for personal injury claims

Contract Law Fundamentals: Including Law of Property (Miscellaneous Provisions) Act 1989 and Consumer Rights Act 2015, establishing basic principles of contract formation and enforcement

Without Prejudice Rules: Based on Evidence Act 1995 and common law principles, protecting communications made in genuine attempts to settle disputes from being used as evidence in court

Late Payment of Commercial Debts (Interest) Act 1998: Legislation governing the right to claim interest on late commercial payments and establishing statutory interest rates

Data Protection Act 2018 and UK GDPR: Regulations governing the handling and protection of personal information in legal communications and documentation

Unfair Contract Terms Act 1977: Legislation controlling the use and enforcement of unfair terms in contracts, particularly relevant when discussing disputed contract terms

Professional Conduct Rules: Including SRA Code of Conduct for solicitors and legal professional privilege considerations, governing professional behavior in legal practice

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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