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Settlement Agreements

Been offered a Settlement Agreement? Need Advice on whether to accept it? Just need it signed? Whatever it is, Lloyd Donnelly can help.

Our Head of Employment Law, Andrew Lloyd has recorded a video explaining what a Compromise/Settlement Agreement is, the pitfalls of signing an agreement and how we can maximise your deal.

Settlement Agreements and Compromise Agreements are the same thing. However, people tend to call them Settlement Agreements nowadays.

If you're reading this, it's likely that your employment is coming to a close and you have been offered a Settlement Agreement. You may not be sure whether to accept your settlement Agreement or not and wondering if you have been offered a fair settlement.

Settlement Agreements Lawyers in Hertfordshire, London & Southern England

At Lloyd Donnelly, we help employees like you by providing a full range of services and support relating to Settlement Agreements. Whether you just need your Settlement Agreement signed, need advice on whether to accept it or not or would like us to help you maximise your payout by taking your case and even if that means representing you in an employment tribunal, we can help.

How we can help:

  • Help you get the best possible deal via negotiations with your employer
  • Represent you in employment tribunals
  • Advice on tax related issues
  • Sign your Settlement Agreement (if you're happy with your offer)

What should be in a Settlement Agreement

  • The agreement should be in writing.
  • The terms of the agreement should be adapted to the circumstances of the claim.
  • You need to have received legal advice regarding the terms of the agreement from an independent advisor who is insured against the risk of a claim arising from that advice.
  • The individual giving you legal advice about the agreement must be a lawyer; a trade union representative with written authority from the trade union or an advice centre worker, who has written authority from the centre to give this advice

Frequently Asked Questions (FAQs) about Settlement Agreements:

What is a settlement agreement?

It is a legally binding agreement between an employer and employee to settle a dispute about an employment issue. From an employee’s point of view, it is a way of ensuring that your employer is legally obliged to pay you a settlement sum. From an employer’s point of view, it stops employees from taking any further action about a dispute.

When will I be offered a settlement agreement?

Normally when you have already made a complaint against your employer and they wish to settle that dispute with you. You may also be asked to sign a settlement agreement before you are paid a redundancy payment.

What do I need to watch out for?

Normally Settlement Agreements are worded so you can’t bring any claims against your employer after you have signed it. You therefore need to be careful that the money you have been offered is enough. Settlement Agreements can also contain clauses preventing you from doing things at your employment is ended, such as talking about how much you settled for working for a competitor of your employer. It is important that you take detailed legal advice before

What will my solicitor do?

We will investigate the background to your case and identify all the potential claims you have against your employer. We will then assess whether the money you have been offered is enough. If it is not enough, we can seek a better deal. We are able to negotiate a better sum is a large proportion of cases.

Do I have to pay tax on the money I receive?

This is a complicated area of law. As a general rule, any sums that are owed to you under your employment contract, such as wages, holiday pay or bonuses etc, are subject to tax in the normal way. Compensation for injury to feelings, loss of office (an ex gratia payment) or a redundancy payment are tax-free up to £30,000.
Notice payments or ‘pay in lieu of notice’ can go either way depending on the circumstances. We will be able to advise you on whether your notice payment can be paid tax-free.

Will a solicitor charge me for their advice on the settlement agreement?

Normally you will not be charged. In most cases, your employer will pay our bill. If the money you are offered by your employer is not enough, we may be able to offer you a type of ‘no win no fee’ agreement to negotiate a better deal, so there is no risk to you. Call us to find out more about our ‘no win no fee’ (Contingency Fee) agreements for employment law matters.

Can I discuss my Settlement Agreement with someone else?

That depends on whether you have signed your Settlement Agreement at that point. If you haven't then you are free to discuss it with anyone you wish. However, once you have signed it, you confidentiality applies and you aren't allowed to discuss it with anyone else.

When should I expect payment?

Once all terms have been agreed and your Settlement Agreement has been signed, you can expect payment in approx. 25 days. However, it's important to note that this can vary from one employer to another. On average, Lloyd Donnelly's Settlement Agreement case payouts range anywhere from 15 days upto a month. It is also woth checking if payout settlement times are included within the agreement, something we would do for you if we were handling your case.

I have already been offered a Settlement Agreement. Should I sign it?

That entirely depends on whether you are happy with it or not. Generally speaking, you have 3 options if you have been offered a Settlement Agreement : The first one is if you are happy with the amount that your employer has offered you. In this case, there's no reason for any delay. The second option is if you aren't happy with the amount – in this case, you can try and negotiate a higher amount with your employer or engage a Settlement Agreement solicitor firm like ourselves to handle this for you. The third option is taking your employer to court. At Lloyd Donnelly, we always advise our clients to consult with us first before you decide to issue a tribunal claim. In most cases, employers want to avoid this and if you have an experience Settlement Agreement solicitor on your side, based on our experience, employers prefer to settle out-of-court. Negotiating 101 is offering the lowest amount possible in your first offer and your employer knows this which is why we are often able to get much higher settlements for our clients.

How much money can I expect from my Settlement Agreement?

So, your employment term is coming to an end and talks have begun for offering you a Settlement Agreement and you’re not sure how much money you can get? If this sounds like you, the following should help.

Primarily, the amount of money that you will be able to get out of a Settlement Agreement depends on your individual situation.

For example, your salary plays a part in determining how much money you will receive. The higher your salary, the higher the payout, usually. Other factors, such as the volume and quality of the evidence you have against your employer will also be a deciding factor. By quality, we mean not just the depth of the evidence but also if you have unbiased witnesses to support your claim, if you have evidence from multiple sources (phone calls, emails, perhaps something in writing). By volume, we simply mean how many supporting documents you put forth. More is always more in this case.

Your employer’s circumstances and stand also play a role here. For example, if your employer is a cash-strapped business (perhaps, that might have been one of the reason for the redundancy) then even if they agree that you deserve a higher payout, they may not have the resources to make that happen. Chances are that your employer knows you well and there’s a good chance they’ll take this into account as well – how will do they think you are to take them to tribunal, how likely is it that you’ll settle without putting up too much of a fight and so on.

How to negotiate a better deal from my Settlement Agreement

A Settlement Agreement is essentially, a ‘deal’ that takes place between the employee and the employer towards the end of the employment period and in order to reach a settlement. If you are reading this, chances are, you have already been offered a Settlement Agreement and you are wondering how you can get a better deal, in other words, more money/compensation from your Settlement Agreement.

If you want to maximise your payout, you need to ensure that you put forward a very strong case for why your employer should offer you more money.

Here are some tips that can help you achieve this:

  • To begin with, you need to get well versed with all the factors that can help you increase your payout. Your case needs to convince your employer that you deserve more money than initially offered. Alternatively, you can engage Settlement Agreement specialists such as Lloyd Donnelly who can not only help you get a better deal but if we don’t, there’s absolutely nothing to pay. So it’s a no-loose deal
  • The situation should be desperate enough for your employer to offer you more. If you look at it from your employer’s point of view, there should be some form of tangible or intangible return that is higher even when they consider paying you more
  • In most cases, you need to ensure that your employer is actually at fault to begin with and that is one of the main reasons that your Settlement Agreement was offered to you in the first place
  • As an employee, you need to be patient with the negotiation process. Seldom is the first offer the best and if you rush to close the deal, it relieves all the pressure off your employer and gives them very little incentive to sweeten the deal

Contact Our Settlement Agreements Lawyers for Hertfordshire, London & Beyond

If you have representation from a legal advisor relating to a claim and you subsequently settle it through a settlement agreement, the same advisor can also advise you on the settlement agreement. To discuss further or if you have a question, call us for no-nonsense and impartial advice or fill out an enquiry form.

One thing is for sure, the first deal is almost never the best and with most of the clients we have worked with, we have been able to help them get a better deal. If you need more advice on how much you can get from your Settlement Agreement, we’ll be happy to offer a free no-obligation chat.

Lloyd Donnelly Solicitors

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What our clients say

I was very pleased with the way that my case was handled. Andrew was very firm in getting results and if it wasn't for his persistence and continued efforts I probably wouldn't have received the settlement that I did.
M Norman