Who should advise me about a settlement agreement?

In order for it to be a legally binding document you must have independent advice from a relevant independent adviser. This is normally a solicitor but s203 of the Employment Rights Act states that a relevant independent adviser can be a qualified lawyer or an officer, official, employee or member of an independent trade union who has been certified in writing by the trade union as competent to give advice and is authorised to do so on behalf of the trade union. Similarly, somebody who works at an advice centre can give the advice if they have the same certification required for a trade union.

The lawyer does not need to be an employment law specialist but this is recommended to ensure that they have the experience and expertise to provide not only the statutory advice as to the terms and effect of the settlement agreement and the effect on your ability to pursue your rights before an employment tribunal but whether the agreement is a good deal for you. It would be in your best interests if your solicitor can provide some advice as to the fairness or otherwise of the deal you have been presented with. It would be normal for there to be some level of negotiations on the terms and the value of the agreement which your solicitor may do for you.

Being employment law specialists means our solicitors can provide advice on all of this and bring their experience from advising on hundreds of these agreements.

It is a requirement of s203 of the Employment Rights Act 1996 that the adviser has in force when they gave the advice a contract of insurance or an indemnity provided for members of a professional body covering the risk of a claim by you in respect of a loss as a consequence of that advice i.e. professional indemnity insurance. The agreement must identify the independent relevant adviser but they do not need to be a party to the agreement. It is normal for there to be a certificate attached to the agreement where the solicitor will set out all the requirements as to how they meet the definition of a relevant independent adviser for the purposes of the Act, they have the insurance and that they have provided the statutory advice.

You should choose that solicitor yourself and we would advise against going to a solicitor whose name has been given to you by the employer. Whilst they will be independent they may be someone whose style or manner is preferred by your employer. Some solicitors will just meet the requirements and then sign the agreement and not go further to suggest additional terms that are missing that would benefit you as we will. Indeed some who are seeing a whole bunch as recommended lawyers by your employer may not be willing to negotiate and rock the boat.

Your adviser should be independent which means that they must not have provided advice to your employer and your solicitor must not have acted for them. This is not an absolute ban but as with any new matter your solicitor will consider whether there is a conflict of interest in them acting. If your solicitor still advises your employer then they would not be independent but if they did so some time ago this may be fine. That is a matter for you and them as to whether this is appropriate.

More FAQs on Settlement Agreements