Why You Need Legal Advice for a Settlement Agreement

A Settlement Agreement is only legally binding if you get independent legal advice from a Solicitor or a legal advisor first. This is so that you’re informed about what the Settlement Agreement means for you.

Even though you have to get independent legal advice, your employer has to pay for that advice.

If your employer has asked you to sign a Settlement Agreement, you should talk to one of our Employment Solicitors and get free initial legal advice. They can talk to you about your rights and help you decide if signing the Settlement Agreement you have been offered is in your best interests.

Call us on 0808 258 3531 or request a callback

Other Important Reasons to Get Legal Advice

There are a number of other good reasons why getting independent legal advice is a good idea.

  • Avoid Paying Unnecessary Tax – An Employment Solicitor can help you to make sure the Settlement Agreement is a tax efficient as possible. For more details see paying tax on a Settlement Agreement.
  • Protecting Your Rights – In England and Wales you have rights at work. These include contractual rights, which include your pay, holiday entitlement, notice period and all your employment rights that are laid down in statute such as protection from discrimination at work. You need to know if any of these rights have been ignored and what the possible consequences could be for your employer. This could be an important factor in your decision whether to accept a Settlement Agreement or not.

Make an Informed Decision

It’s important to remember that you don’t have to accept a Settlement Agreement when it has been offered. Your Employment Solicitor or legal advisor will help you to be clear whether accepting your employer’s offer is the best option for you. You don’t need to accept the first offer either, but your Employment Solicitor should be clear with you about whether they think you’ve been made a good offer or not.

Our Employment Solicitors have had a great deal of success in helping our clients working in different sectors, as shown in these two case studies:

What is a Settlement Agreement?

A Settlement Agreement is a legal document between an employer and an employee. The agreement usually comes with a payment from the employer and in return the employee signs away any right to take their employer to an Employment Tribunal.

Because of this, employers often use Settlement Agreements to avoid expensive and potentially damaging employment law disputes.

Settlement agreements often come about as part of private conversations between an employer and their employee and you can even ask your employer for a Settlement agreement, it doesn’t have to come from them. These conversations are often called ‘without prejudice’ discussions.

Getting legal advice is an essential part of a Settlement Agreement. Because Settlement Agreements are contracts, they’re formal and full of legal jargon which can be difficult to understand. You’ll need a Solicitor or legal advisor to explain the whole document to you and then sign the Settlement Agreement to confirm you’ve had independent legal advice. 

You can get this legal advice from:

  • An Employment Law Solicitor
  • A Trade Union official
  • An independent legal advisor

You should remember that your employer almost always has to pay your legal costs for independent legal advice when reviewing a Settlement Agreement and that it’s only valid once you’ve had independent legal advice that has been confirmed to your employer.

Speaking with one of our Employment Solicitors will give you the opportunity to discuss your situation in detail and give you the chance to consider if you should sign the agreement in its current form, or whether you should try to negotiate an improved settlement. You can ask your Employment Solicitor to try to get a better agreement for you. They’re specialists and have dealt with hundreds of these agreements.

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Simpson Millar Solicitors are a national law firm with over 500 staff and offices in Billingham, Bristol, Cardiff, Catterick, Lancaster, Leeds, Liverpool, London and Manchester.