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Settlement Agreements

Settlement Agreements or Compromise Agreements

Settlement agreements (formerly called compromise agreements) are legally binding agreements that set out the full terms of an agreement between an employer and employee, whereby an employee agrees to sign away their rights to bring a claim against their employer in return for a cash sum.

Settlement or Compromise Agreements are generally offered to employees when a dispute in the workplace arises, a redundancy process is being undertaken or when employee misconduct is alleged.  They can also be used when settling potential or actual Employment Tribunal Claims.

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What are the common terms of a Settlement Agreement?

A well written Settlement or Compromise Agreement will include:

  • A tax free compensation sum payable to the employee (up to a maximum of £30,000)
  • Confidentiality
  • Signing away of employment rights by the employee
  • A financial contribution towards the employee’s legal fees in obtaining advice on the agreement
  • The requirement for an independent Solicitor to sign the agreement confirming that they have advised the employee on the terms of the agreement.

How much does it cost?

An employer routinely contributes towards an employees’ legal costs in obtaining advice on a Settlement or Compromise Agreement and therefore with our fixed fee prices starting from as little as £250 plus VAT, we are able to offer most employee clients a completely free service.

This means that as an employee, you will receive free, independent and impartial legal advice that doesn’t cost you a penny.  We send our invoice directly to the employer.

Only if substantial negotiations on sums and/or terms are required will an employee potentially be required to contribute towards their legal fees, but we will always first try and increase an employer’s contribution towards an employee’s legal fees where this is required.  Where it is not possible to obtain such an increase, we will offer you a reasonable fixed fee for any such work, taking into account your personal circumstances.

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Why do I need your help?

You will need to have your Settlement or Compromise Agreement signed off by a solicitor in order for it to be legally binding.  However, the service we offer encompasses many potential advantages for employees entering into settlement agreements, including ensuring that you are getting a good deal, advising you of any potential claims you have or could have against your employer (such as unfair dismissal or discrimination) and the compensation you would likely receive if you were to bring a Claim, informing you fully of the potential effect of the terms of the agreement, above and beyond their ‘face value’, so as to ensure that you are completely aware of what you are getting yourself into, advising you of any ‘hidden traps’ or post-termination restrictions, making sure you are aware of any potential tax implications of entering into the agreement and, where required, negotiating an uplift in the compensation on offer using our lawyers practical, experienced and savvy negotiation skills to get you the very best deal.

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What do I do next?

If you would like to have a discussion regarding settlement agreements, or any other employment or workplace issue, please give us a call for a confidential no charge telephone consultation.

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Independent Legal Advice of Settlement Agreements 

Price: £250 - £750 plus VAT. Attwells Solicitors are able to offer almost all clients a completely free service.*

*Depending on the terms of the agreement having already been agreed at the time of instruction, the legal contribution provided by employer and the complexity of the agreement.

What is included in the price:

  • Initial telephone conversation
  • Initial brief review of the settlement agreement prior to instruction
  • Once instructed, a thorough review of the settlement agreement
  • Detailed report to you on the terms and effect of you entering into the agreement
  • Arranging your signature to the agreement
  • Completion of the adviser’s certificate (ensuring that the agreement becomes legally binding)
  • Sending the signed agreements to your employer/former employer for their signature
  • Receiving the countersigned agreement back and ensuring it has been properly executed
  • Sending the countersigned agreement out to you, for your safekeeping
  • Updating you as to the progress of the agreement throughout by way of email or telephone
  • Meeting at your local office with a specialist employment lawyer to go through the agreement terms by term (where required)

What is excluded from the price:

  • Negotiation with your employer to enhance the settlement package or amend the terms of the agreement (can be arranged at further cost)
  • Tax advice
  • Advice on benefits
  • Legal advice outside of the service requested

Disbursements: 

None anticipated 

What is the process? 

You contact us and we take initial instructions from you as to the headline terms of the agreement (e.g. termination date, compensation package, deadlines for completion, employer contribution to your legal fees etc.) and the circumstances leading up to your employer offering you the agreement.

We then ask you to provide us with a copy of the agreement (where available). Once received, one of our employment law specialists will briefly review the agreement and advise if we can undertake the work involved for the contribution provided by your employer. In the large majority of cases we do undertake the work for the contribution provided by your employer, meaning it does not cost you, the employee, a penny. Upon confirmation, we will send you a formal engagement letter to confirm our instruction.

Once we have received formal instructions from you, a member of our employment law team will draft a comprehensive report to you on the terms and effect of you signing the agreement. This is usually within 2 working days of instruction (we will always fulfil deadlines set by your employer/former employer, subject to them being agreed prior to instruction). We can meet clients to go through the agreement face to face if they prefer. If, having read the report alongside the agreement, you are happy to proceed, we will then ask you to sign where indicated and return two copies of the agreement, signed by you, to us.

Upon receipt of the signed agreements, we will then complete the Adviser’s certificate and send both agreements, alongside our invoice for settlement, to your employer/former employer, who will then countersign and return one copy of the fully executed agreement to us. Once received, we will take a copy and send you the original, for your safekeeping.

How long will it take? 

We aim to have a report to you on the terms and effect of the agreement within 48 hours of formal instruction. Same day appointments can be made subject to availability. If there is a deadline for the agreement to be delivered, please raise this with us at the outset and we will ensure we can meet that deadline.

How much will I pay?

We aim to give you free, independent and impartial legal advice that doesn’t cost you a penny. We send our invoices directly to the employer.*

*Subject to the employer’s legal contribution and the terms of the agreement being agreed. If you instruct us to negotiate on your behalf, further fees will be payable.

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