Settlement agreement: Who signs first and who pays legal fees?

Who signs first?


Typically an employee will sign first and then it is signed by a solicitor for settlement agreement who provides a certificate to confirm that he or she has provided the advice necessary to ensure that the agreement is legally binding.


The employee’s advisor will then normally send a copy of the signed and certified agreement to the employer’s advisor who will liaise with their client to obtain a signature from the employer to ensure the agreement is in.


Often settlement agreements have counterparts clauses which means that all parties can sign separate pieces of paper and provided the agreement is in the same form it forms a binding contract.

Who pays?


Ordinarily, a settlement agreement provides a fixed fee contribution towards the legal costs which will be incurred in taking advice on the agreement. This amount tends to vary between £250 plus VAT and £1000 plus VAT.


The legal cost contribution will cover off all legal costs incurred in taking advice on the terms of the agreement and understanding the legal position in other words whether there are grounds to negotiate.


If a negotiation becomes appropriate then the legal adviser will advise you of any additional costs which may be incurred in following that process.


If there is an opportunity to negotiate the terms of the settlement being paid to you then the legal advice contribution being paid may also be negotiable.