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Yes. Make them sign it.
We use rejection emails, letting them know that our declining does not reflect on any merits to their case.
Yes, an email is usually fine for delivery. Be clear there will be no representation, let them know declining doesn’t reflect on the merits, advise of all potential statutes of limitations for all reasonably related claims, and advise that they should contact new counsel for more details and well before any possible filing deadlines. Sending the same via USPS letter with proof of delivery is also a good call if the client seems sketchy.