Settlement Agreement Legal Fees – Who Pays?

If you have been offered a settlement agreement, it is normal to have concerns about the cost of legal advice and who is responsible for paying it. In most cases, employers make a financial contribution towards your legal fees, meaning employees often pay little or nothing themselves.

Who pays the legal fees for a settlement agreement?

In the majority of cases, the employer pays a contribution towards the employee’s legal fees. This is because independent legal advice is a legal requirement for a settlement agreement to be valid.

The employer’s contribution is usually set out in the agreement itself and is paid directly to your solicitor once the agreement has been signed.

How much does settlement agreement advice usually cost?

The cost of settlement agreement advice varies depending on the complexity of the agreement and whether negotiations are required. Many settlement agreements can be reviewed within the employer’s fee contribution, meaning there is no additional cost to the employee.

Where negotiations are needed, or the agreement is more complex, there may be a shortfall. Any additional costs should always be explained clearly before work is carried out.

What does the employer’s contribution cover?

The employer’s contribution typically covers:

• Reviewing the settlement agreement
• Explaining the legal terms and their effect
• Advising you on your rights and options
• Completing the solicitor’s certificate required for the agreement to be binding

In some cases, the contribution may also cover limited negotiations with your employer.

What if the employer’s contribution is not enough?

If the employer’s contribution does not fully cover the cost of advice, your solicitor should explain any additional fees before proceeding. You can then decide whether you wish to continue, negotiate the employer’s contribution, or limit the scope of advice.

It is often possible to recover significantly more through negotiation than the cost of any additional legal fees.

Is free settlement agreement advice available?

In many cases, the employer’s contribution towards legal fees is sufficient to cover the cost of advising you on the settlement agreement, meaning there is no charge to you for the initial advice. Where advice extends beyond the employer’s contribution, this will always be discussed with you in advance so you can make an informed decision.

When should I speak to a solicitor about settlement agreement fees?

It is important to seek legal advice as soon as you receive a settlement agreement, particularly if you have been given a deadline to sign. Early advice ensures you understand the costs involved, your rights, and whether the terms offered are fair.

For personalised advice on settlement agreements, including legal fees and employer contributions, speak to our settlement agreement solicitors.