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Settlement Agreement FAQs

Settlement Agreement Frequently Asked Questions

What is a settlement agreement?

A Settlement Agreement is a written document entered into and signed by employer and employee which settles or compromises the employee’s right to pursue claims which the employee has against a respondent, which is usually their current or former employer. In return, the employee usually receives a payment, known as a Termination Payment, for agreeing to enter into a Settlement Agreement.

What do I do if I have been offered one?

Settlement Agreements are more common than you think, although the majority of people have never heard of them. It is absolutely vital that you find an experienced legal adviser to advise you upon the Settlement Agreement. If you are in this position please contact the employment department at Hibberts LLP on 01270 215117 and we will arrange an appointment at a convenient time for you in order to advise you upon the document.

Do I have to get legal advice, can’t I just sign it?

As an employee, you have to receive independent legal advice as without it a Settlement Agreement simply isn’t valid. If you were to sign it and send it back then the document is not legally binding. Settlement Agreements will have an adviser’s certificate attached to it and this is where the legal adviser also has to sign the document to confirm that they have provided independent legal advice to the employee.

How much will the advice cost and who pays for it?

In the overwhelming majority of cases the employer will agree to make a contribution toward the employee’s legal costs in them obtaining advice upon the Agreement. The contribution is usually payable directly to the legal adviser’s firm. The amount of that contribution will differ from case to case but as a general rule the initial contribution that is offered may start at anywhere between £250 + vat – £500 + vat.

We will always keep you advised about the likely costs involved in the matter and will tell you if at any point we think our costs may exceed the contribution offered by the employer.

How long will our appointment take?

Generally our first appointment with you will last around 1 – 1.5 hours. At this first appointment we will need to gather various pieces of information from you about the background to the matter and the circumstances in which the Settlement Agreement has been offered. Our role is two-fold; firstly we need to assess what claims we think that you have or may have against the employer and if appropriate we will then go on to advise you about the potential values of such claims. The second aspect of our role as the legal adviser is to advise you upon the Settlement Agreement that has been offered to you and we will go through the document with you, advise you in detail upon the content and you will have the opportunity to ask any questions that you wish to.

At the end of the appointment we will advise you upon the options open to you and we will of course discuss whether we advise that any amendments are necessary to the Agreement. Ultimately, how you choose to proceed is entirely a matter for you, our job is to ensure that you have received personal and professional advice upon the Settlement Agreement offered to you, that you fully understand the document so that you can then make an informed decision about how to proceed.

What if I am not happy with the offer that has been made to me?

If having the benefit of our advice you decide that you do not wish to sign the Agreement in its’ original form then normally, with your consent, we would negotiate the terms of the Agreement with your employer. We will keep you fully updated about the content and the outcome of those negotiations.

What do I need to bring with me to an appointment?

  • Proof of identification – We are required to comply with various regulations including those set out by the Law Society and to comply with Money Laundering Regulations, therefore, we will need to take proof of identification from you at our appointment. Normally that would be in the form of either a passport or a driving licence and also a recent utility bill or bank statement
  • Your contract of employment or terms and conditions of employment
  • A recent wage slip
  • A recent wage slip
  • A copy of the Settlement Agreement
  • Any correspondence you have relating to the offer of the Settlement Agreement or the termination of your employment. For example, letters or minutes relating to redundancy

More information will be given to you when we make an appointmen.

What should I do next?

Please contact our employment department and speak to our head of department Camille Renaudon on 01270 215117 to discuss further. Alternatively, you can contact us here.

We can arrange an appointment for you at a time and location to suit you and we have offices across South Cheshire and North Shropshire.

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