Hello Sandra and thanks for using Just Answer.
My name is ***** ***** am happy to assist you with your enquiry.
The law states that if a party possesses land which does not legally belong to them for 10 years or more, without dispute from the true owner, then that party can apply to the Land Registry for "possessory title" of that land (ie be granted title to that land).
Therefore, even if you have "pinched a part of your neighbour's land" then you do have the legal right to apply to be owner of the land.
If your neighbour were, therefore, to take legal advice, they would be told that they would be wasting their time (and money) in trying to make a claim against you to change the boundary line.
I would therefore sugges that you either ignore the letter or instruct a local Solicitor to write a letter to your neighbour stating in no uncertain terms that you have no intention of re-positioning the boundary fence, due to the length of time it has been in place!
I hope this assists and sets out the legal position to you.