Randolph It might be judicious at this moment to point out the basic tenet of South African (and most other countries') law: innocent until proven guilty.
It is also important to note that lawyers' letters are completely worthless in the eyes of the law.
However, if you have done something illegal and receive a lawyer's letter, it is usually a good time to stop what you're doing.
Bear this in mind, though: court is expensive. Most of the time, lawyers will try and keep a case out of court for as long as possible. It costs a lot of money. In South Africa, a good estimate of municipal court costs is around R50 000 per party.
This is why we have private establishments like ITC, which allows the blacklisting of credit offenders without the expense of court cases.
A rule of thumb: if what you've done is less than half of the cost of going to court, you'll probably find a way to settle out of court for a lot less. Just ask Michael Jackson.
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Disclaimer: I am not a lawyer. This is my opinion, and should not be used as valid legal advice.