Settlement Agreement Solicitors

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Our solicitor is available from 19/07/2024* to provide independent legal advice for your employment settlement agreement.
Our Fixed Fee is £360 INC VAT for employees outside of the M25 ring road and £600 INC VAT for inside the M25.

What is a contract settlement?

A contract settlement, or settlement agreement, is a legally binding contract where you and your employer* agree to a mutually acceptable resolution to a dispute. They can provide a clean break to a working relationship which has broken down, or simply save the time and stress of taking a dispute all the way through litigation.
Usually, they involve a payment from the employer to the employee and the termination of employment, but can sometimes be used to resolve a dispute while retaining your job. Settlement agreements were previously known as compromise agreements. They are different to an ACAS settlement agreement (COT3 Agreement).
*A settlement agreement may also be between a former employee, a worker, or a potential employee or worker, and the employer.
Key Features:

Source: Acas Guidance on Settlement Agreements

  • They are legally binding
  • They can waive an individual’s rights to bring a claim covered by the agreement – for example, the right to make a claim to an employment tribunal or court
  • The employee (or former employee) usually receives some form of financial payment and will also often receive a reference as part of the agreed terms
  • They are entirely voluntary – they include terms and conditions that are mutually agreed, and parties do not have to enter into them if they do not wish to do so
  • They are often reached through a process of discussion and negotiation. The parties do not have to accept the terms initially offered – there may be a process of negotiation during which both sides make offers and counter offers
  • Negotiations about settlement agreements are often confidential in the sense that, if an agreement is not reached, the negotiations may not be admissible as evidence in claims before an employment tribunal or in other court proceedings.

Why would a company offer a settlement agreement?

A company will make a settlement offer to avoid their costs of going through litigation. If they believe you may make a claim at tribunal or court, or they wish to end your employment without going through the full and proper disciplinary and dismissal process, they may offer you a settlement agreement.
They will usually offer to compensate you for the costs of finding another job, saving the less predictable costs of defending a claim, and saving you both time, stress and bad publicity. If you have a legitimate claim against them they will often include a sum in the settlement offer to compensate you for waiving your right to bring this claim against them.

Should you accept the first settlement offer?

There is no one-size-fits-all prediction as to whether your employer will give a good offer first. This depends on the attitude and tactics of their individual (or team of) solicitors, in the context of your specific case.
Because of the variables specific to each case, a settlement offer must be carefully weighed against the potential award for your claim and your likelihood of winning should you go ahead with litigation, versus the costs you would be likely to incur, as well as the damage you may do to your career prospects if you were to lose your case and your job.
An extensive knowledge of employment law and tribunal awards are required to determine whether the offer is fair and reasonable. Additionally any settlement contract in which you waive your right to sue your employer regarding a specific claim or incident is not valid without a certificate of independent legal advice from a settlement agreement solicitor.

How do you respond to a settlement offer?

You should get independent legal advice before responding to a settlement offer. Our settlement agreement solicitors can review your offer and tell you whether it is good enough to accept. If they advise that you could try for a better offer, they can also help with negotiating a settlement agreement for an additional fee.
If you want to accept your offer, you must still get legal advice in order for your agreement to be legally binding. Your settlement agreement solicitor can advise you on how to respond.
Frequently Asked Questions

No. A redundancy payment is due when your contract is terminated due to a genuine redundancy reason. The amount of your redundancy pay will be determined by your statutory rights and any additional contractual rights. If you have a case of unfair dismissal by redundancy, your employer may offer a separate settlement agreement to resolve the dispute of unfair dismissal.

The settlement offer normally includes a payment and a reference, the payment will depend on the individual case. Here are some factors to consider when negotiating.
  • Contractual obligations
  • Notice period
  • Outstanding annual leave
  • Length of employment
  • Potential financial and time costs of resolving the problem if a settlement is not reached, including any potential tribunal claim
  • How long it will take you to find a comparable job
  • Compensation for the issue itself
Your employer is not obligated to provide a reference but if they agree to, you'll both need to agree on:
  • Your reference must be a true and accurate summary
  • Your employer can only give information they believe to be correct
  • A full and comprehensive reference, or a shorter statement (this may be preferable in cases involving any misconduct or performance issues).
  • If your employer is asked for an informal oral reference, it must be consistent with the agreed written reference.

This is determined in the agreement itself. Often this can be beneficial when looking for your next job as it may mean that your employer agrees not to discuss any of the issues concerned in any reference they give, and you may be able to avoid 'dismissal' as your reason for leaving.
Any confidentiality clause which tries to stop you from whistleblowing (reporting wrongdoing in the public interest) is not legally binding. You may breach the terms of your settlement to legitimately blow the whistle. You may wish to seek legal advice to make sure that your report is covered by whistleblower protection.
Settlement negotiations and the agreement itself are not admissible evidence (you cannot talk about them in any future claim) unless there has been some unambiguous impropriety, improper behaviour or undue pressure. Seek legal advice if you think this may apply to you.
Do you have a problem with your employer?
It is important to get independent legal advice from a settlement agreement solicitor before accepting an offer. Often, your employer will cover the costs. Get in contact with us and see how we can help.
We can assist with:
  • Reviewing your settlement offer
  • Advising you on whether to accept
  • Pre-action negotiations, for a better settlement offer
  • Application to court
  • Pre-liminary hearing
  • Mediation
  • Court appearance
  • Appeals
We have on hand counsel to support your claim and offer guidance along the way.
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If you need advice regarding accepting or negotiating your settlement agreement, we can help.

We also have a specialist employment barrister to represent your case if you choose to move ahead with litigation.
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