This is an all-too-common statement we hear from new clients.
The first principle is this: you should never enter into any form of legal agreement under duress. Some (bad) employers will try to put you under tremendous time pressure to sign an agreement with the lure of
a decent financial deal. You must resist.
A settlement agreement is only legally binding if it has been countersigned by a solicitor or a limited number of other parties. This is why your employer will offer to contribute a fixed amount to your taking legal advice. There is no legal obligation for them to do so, but it is common practice.
The Acas Code of Practice on settlement agreements sets out what good conduct looks like. Failure to follow the Code does not make an employer liable in any proceedings or impact compensation in any claim, but employment tribunals will take into account how far from the Code an employer has strayed.
It is worth pointing out to an employer who is being heavy-handed that the Code exists, and they should follow it. This may take off some of the pressure.
Often, an employer will impose time urgency because they just want to know that the employee is engaging with the discussion. It can be a good idea, if you do want to exit an organisation, simply to email your employer marking the email Without Prejudice that you are engaging with the offer but need a bit more time to consider it and are seeking a legal adviser. The employer just wants to know if you are actively considering it, and many times will agree to extend a deadline to allow you to take the advice you need.
When approaching a solicitor to ask them to review a settlement agreement, you need to consider whether you are happy with the deal and want advice only on the legal terms or whether you want the solicitor to renegotiate the financials. If the former, usually a lawyer will agree to cap their fees at the same level as the employer’s proposed contribution. If you intend to renegotiate, most solicitors will ask you to pay your own money towards the advice in addition to the employer’s fee.
Some clients ask if they are doing the right thing in signing a settlement agreement because they may have valid legal claims for discrimination or similar. It can be tricky to decide whether to take a deal and sign away your legal claims or dig in and consider litigation. Of course, there is a middle way, which is to use a good lawyer to renegotiate the financial terms (at an additional cost to you). Note that this route comes with no guarantees, especially if the employer’s package is already generous.
If you think litigation is a better option, consider this: either you will have to run the case yourself, or you will have to pay for legal fees. You might have legal expenses insurance to cover your costs. But you will have a long time delay to reach a hearing, and you have a duty to mitigate your losses, meaning that if you find a new job and stem your financial losses, it may not be worth pursuing litigation at all. Always check with your lawyer that there is a benefit in continuing a claim. This will also keep you stuck in the dispute and is not the most healthy way to live. Sometimes moving on with a financial buffer is the most sensible thing to do. What is clear is that you must decide for yourself. No one should decide for you or pressure you into doing anything you do not want to do.
This blog was written by Manuela de Castro, Senior Solicitor at didlaw.
