Barwells Solicitors

I HAVE BEEN OFFERED A SETTLEMENT AGREEMENT I have been offered a settlement agreement AND ARE UNSURE WHAT THIS MEANS? and I’m unsure what this means

Nobody would dispute that one of the sad repercussions of these last difficult months is the fact that a large number of people may find themselves being made redundant or being offered a settlement agreement. A settlement agreement is an agreement between you and your employer where you agree to give up your rights to bring any claim against your employer in exchange for a sum of compensation. In some settlement agreements the compensation sum can be quite high but in others the offer can be relatively modest. The first £30,000 payable as a compensatory payment under most settlement agreements will normally be free of tax and national insurance. A settlement agreement can cover situations where there is a potential redundancy, disciplinary, or where the relationship between you and your employer just isn’t working, but your employer wants the comfort of knowing that you will not bring a claim against them.

Will I have to pay Legal costs? It is a requirement of any settlement agreement that you have to seek advice from an independent legal advisor. Your employer will usually contribute a sum of money towards your costs, normally between £250-£500 plus VAT. We would recommend that you speak to your solicitor straight away to see if there will be any additional charges on top of this. Once you have received the settlement agreement, you need to speak to your solicitor and consider whether you want to accept the offer. You can always reject the offer or see if you can persuade your employer to increase the offer. It is best to discuss this with your legal advisor so that you can get the best possible outcome. Can I tell anyone about the offer? Generally your employer will include a clause that will ask you to keep the existence and the terms of the agreement confidential. It is very common to see a clause requiring that you only discuss the agreement with your immediate family or legal advisor. It is essential that you are confident that you clearly understand all of the terms and the requirements under the agreement. There is a risk that you would have to pay back the settlement monies if you breach the agreement.

If you have any questions, have received a settlement agreement or would like any advice on settlement agreements, please do not hesitate to contact our litigation team on litigation@barwells.com or 01273 582271.

Lauren Chambers Partner, Head of Litigation T 01273 582271 Sarah Rebello Trainee Solicitor, Litigation T 01273 582271

Barwells

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