Differences Between COT3 and A Settlement Agreement

The primary difference between COT3 and a settlement agreement is at what point in the employment dispute process they are used. A settlement agreement removes the ability of the employee to make a future claim at the employment tribunal. COT3 is used before employment tribunal proceedings take place.


Here are six key distinctions between COT3 and a settlement agreement.



Settlement Agreement

Short, simple document format

Longer agreements drafted by solicitors

Verbally binding agreement

Signed personally and by both parties to be legally binding

Preferred terms cannot be advised by ACAS

Terms can be negotiated by the instructed solicitor

Both parties pay their costs

Employer contributes towards employees’ legal fees

Only be used for a live dispute

Used anytime during or after the employment relationship

The employee is not required to seek independent legal advice

For a settlement agreement to be legally binding, an employee must seek legal advice from a qualified solicitor.

What are COT3 agreements?


A COT3 agreement is ordinarily drafted by an ACAS conciliation officer whereas a settlement agreement is often drafted by employment solicitors. For a COT3 settlement agreement to be enforceable, the ACAS conciliation officer must certify that this is enforceable and notifies the tribunal that the claim is withdrawn.


COT3 settlement agreements are used only in situations where employment tribunal proceedings are about to be issued or have been issued.


A settlement agreement on the other hand can be used in situations before an employment tribunal is issued as well as after an employment tribunal claim has been brought.

Is COT3 a settlement agreement?


No, they are two different agreements used at different stages of an employment dispute process.

What claims can be settled by a COT3?


The purpose of COT3 is to lay out the terms to settle an employment tribunal claim with an employer. The terms may include waiving your right to pursue the claim in exchange for compensation, other terms unobtainable at an employment tribunal such as an apology or a reference.

Do I need a solicitor for a COT3?


No. Legal advice from a solicitor is not a requirement for a COT3 settlement, unlike a settlement agreement which requires advice from a solicitor to become legally binding.