settlement agreement

A settlement is a settlement! 

A settlement is a settlement! 

Employment tribunal claims are usually settled by way of either a settlement agreement or a COT3 agreement. The latter is facilitated via Acas and often has more concise settlement terms. It is Acas that determines that a binding settlement has been reached and notifies the Tribunal that settlement has been reached. The premise of any settlement agreement is that claims cannot be pursued on the facts that have led to the offer of settlement and the reaching of binding terms. Just to be clear the terms of any settlement agreement will usually settle all claims (current and future) save for limited exceptions.  

In the case of Ajaz v Homerton University Hospital NHS Foundation Trust the Employment Appeal Tribunal held that it was an abuse of process for a Claimant to try and bring new proceedings by way of new detriment allegations which relied upon the same protected disclosures that had previously resulted in the settlement of a whistleblowing detriment claim. In 2017 the Claimant had pursued a claim on the basis she had made protected disclosures and been subjected to detriments as a result. This claim was settled by way of a COT3 agreement which contained a clause that she could not issue further or new claims of any nature against the Respondent ‘arising from or in relation to the issues/complaints in the Proceedings.’

In 2021 the Claimant brought a new tribunal claim alleging that she had been subjected to new detriments related to the protected disclosures which had formed part of her 2017 claim. The EAT determined that the Claimant was prevented from bringing a new claim under the terms of the COT3 as it relied upon the same protected disclosures. This was irrespective of the fact that the detriments were new.

The EAT held that to allow the claim to progress would be an abuse of process. By the wording of the COT3 the Claimant had not just settled her complaints but effectively all issues arising from those complaints. The new detriments were irrelevant as the issue of the protected disclosures had been settled by virtue of the COT3.

Practical points to take from this: read the terms of any settlement agreement you are offered (a settlement agreement is not binding without independent legal advice) and be sure to understand that for the most part, entering into legally binding settlement terms means the end of any litigation against your employer/former employer. As one might say ‘you cannot have your cake and eat it too.’

This blog was written by Elizabeth McGlone, Partner at didlaw.