Letter of demand checklist for Victorian lawyers: what not to put in it

A letter of demand looks like the simplest job in a small practice. It's also one where a template written years ago can quietly put the firm in breach. These are the checks I'd want built into any letter-of-demand workflow, drawn from the VLSB, the ACCC/ASIC guideline and the Victorian limitation rules.

1. Don't claim legal costs without a contractual right

It's tempting to add "plus our client's legal costs of $660" to the demand. The VLSB's 2015 fact sheet Letters of demand: traps for lawyers says that if there's no contractual right to those costs, the letter shouldn't demand them, and that doing so may breach Conduct Rule 34. The fact sheet discusses the Sampson matter. Check the client's terms of trade or the contract for a costs clause before the figure goes in.

2. Don't threaten what you won't do

The ACCC/ASIC debt collection guideline (April 2021) says you must not threaten action that you are not legally permitted to take, do not have instructions or authority to take, or have no intention to take. It also warns against misstating legal fees or charges you aren't entitled to claim.

In practice: if the client has told you they'd never actually sue over $4,000, "we will commence proceedings within 7 days" is a problem. Ask the question at intake and write the letter to match the answer.

3. Check the limitation period

An action founded on simple contract can't be brought after six years (Limitation of Actions Act 1958 (Vic) s 5(1)(a)). An acknowledgment or part payment restarts the clock under s 24(3), as quoted in AET v Lokit [2023] VSC 141. So the dates that matter at intake are the date the debt fell due and the date of any last payment or written acknowledgment.

4. Get the debtor right

For a company debtor, pull an ASIC extract before the letter goes. You want the exact registered name and ACN, and confirmation that it's still registered and not in external administration. Clients often know the trading name, not the entity.

The checklist

• Correct debtor identified (for companies: ASIC extract on file, name and ACN match)
• Amount matches the invoices or contract, with no unexplained extras
• Legal costs only claimed if there's a contractual right, with the clause noted on file
• Interest only claimed at a contractual or permitted rate
• Due date and last payment or acknowledgment date recorded, and inside 6 years
• Any threatened step is one the client has instructed and intends to take
• Deadline is reasonable and stated clearly
• Tone is firm without being harassing or misleading
• A lawyer has reviewed and approved the final letter

Where intake saves the most time

Most of that checklist is facts the client already has: invoices, dates, the contract, whether they'd really go to court. Collecting them in a structured form before anyone drafts means the lawyer's time goes on the judgment calls, like whether a costs clause actually applies, rather than on chasing the client for an ABN.