I’ve been advising employees on settlement agreements for over two decades. In that time, employment law has shifted considerably. However, what’s coming in January 2027 is, in my view, the most significant change to the settlement agreement landscape I’ve seen in my career.
Before I get to that, let me share something about how we approach this work. I think it explains why the changes coming down the line matter so much for ordinary employees.
Most People Don’t Understand Why They Need a Solicitor
When someone contacts us after being offered a settlement agreement, the first thing I notice is that most of them are puzzled. Not just about the agreement itself, but about why they need to speak to a solicitor at all.
That confusion is understandable. You’ve been offered money. You may have already agreed on the broad terms. What is there left for a solicitor to do?
The answer is: quite a lot, actually. But more importantly, a good solicitor’s job isn’t just to certify the paperwork. It’s to understand everything that led to the agreement being offered in the first place. This includes the full circumstances, the background and the history of the employment relationship. That context determines whether what’s on the table is genuinely fair. We look at whether there are additional claims that need to be factored in, and whether there’s a real opportunity to negotiate a better outcome.
Legal speak doesn’t help anyone. My job, and the job of every solicitor at Settlement Agreement Advice, is to make sure the client genuinely understands what they’re agreeing to. We need them to understand what their options are. Not to impress them with terminology.
Not Every Case Needs Negotiation, and We’ll Always Tell You Which Is Which
Here’s something that I think sets us apart, and I’ll be direct about it. Roughly 60 to 70 per cent of clients who come to us simply need the agreement reviewed and signed off. The terms are fair, the employer has followed the right process, and the money on offer is reasonable. In those cases, our job is to confirm that, explain it clearly and conclude the matter, often the same day.
We will not encourage a client to spend money or to enter into a negotiation unless there is a genuine opportunity to improve their position. That’s a principle I feel strongly about. Too many law firms see every settlement agreement as a negotiation waiting to happen. That isn’t always true, and telling a client otherwise isn’t acting in their best interests.
What we always commit to is this: we will never exceed your employer’s legal fee contribution without your express consent. If additional work is needed, we will always explain why before anything begins.
We will always get your approval before we proceed.
Acting for Both Sides Makes Us Better at Our Job
All of our solicitors advise both employers and employees. That’s genuinely unusual in employment law, where most firms pick a side. I think it makes us significantly better at what we do.
When you advise employers, you learn exactly how they think. You learn which clauses are standard and which are there for a reason. You learn where there is flexibility and where there isn’t. You learn what a reasonable offer looks like from the other side of the table, and what an unreasonable one looks like, too.
Every solicitor at Settlement Agreement Advice has a minimum of five years’ experience. Nobody who is junior and learning the ropes is signing off on your agreement. That matters because the advice you receive determines whether the agreement is valid and whether it genuinely protects you.
If You’re Willing to Litigate, You Negotiate Better
There’s a point I always make about negotiation strategy. It comes down to one thing: willingness to follow through.
Litigation means taking a case to the Employment Tribunal or the High Court. It means arguing your claim in front of a judge if a settlement cannot be reached. Some law firms never do this. They advise on agreements, but they don’t litigate.
That matters. If a firm won’t go to tribunal, the other side knows it. It weakens every negotiation they have.
We do litigate. That means we have direct, recent experience of how tribunal claims play out, what outcomes look like and what compensation is realistic. It means when we advise a client that they have a strong claim worth pursuing, we can back that up with genuine knowledge of the process. And it means employers and their solicitors know we are not bluffing.
The best settlements are often achieved when the other side believes you are willing to walk away from the table.
The Best Outcomes Come When Clients Let the Lawyers Lead
I work with a lot of people who are under significant stress. They may have been in a long-running dispute. They may have been threatened with dismissal. They may have been managing a difficult internal process on top of everything else going on in their lives.
My advice to those clients is consistent: take a step back and let us manage the process on your behalf. The best outcomes, both in terms of the financial package and the overall experience, tend to come when clients allow their solicitor to lead. That means tight deadlines on counter-offers, controlled messaging internally and externally, agreed reference wording and a clean, swift conclusion.
A drawn-out negotiation benefits nobody. A couple of weeks from instruction to signing is achievable in most cases. That gives the client the best possible result. It allows them to start moving forward rather than remaining caught in a situation that is causing them ongoing anxiety.
If someone is struggling with the stress of the process, I’ll often advise them to speak to their GP, take some time away and let us handle the correspondence. Recovery and resolution can happen at the same time.
What Clients Expect Has Changed, and AI Is Part of That
Clients today are more informed than they were ten years ago. AI tools can now research employment law in minutes. That means clients arrive better informed than ever before. Many have already looked up their rights, read about compensation figures and formed a view on their situation. They understand, at least broadly, what a settlement agreement is.
That’s mostly a positive development. Informed clients ask better questions and make better decisions. But it also means that the bar for the advice we give has risen. Generic, cautious, hedge-everything advice is not what a modern client needs. They need a solicitor who will be direct, specific and honest about their situation. That includes when the honest answer is that the offer on the table is fair and they should sign it.
The risk, of course, is that not all the information available online is accurate. AI tools and search results can give a general picture, but they cannot assess the specific facts of an individual case. That’s still where specialist human advice is irreplaceable.
The Biggest Change in a Generation Is Coming in 2027
In January 2027, the Employment Rights Act 2025 will fundamentally change who can bring an unfair dismissal claim. Currently, employees need two years of continuous service before they are protected. From 1 January 2027, that qualifying period will reduce to six months.
The implications for settlement agreements are significant. At the moment, it is relatively rare for an employee with less than two years’ service to be offered a settlement agreement. That is unless they are very senior or the circumstances are unusual. That will change. From 1 January 2027, employees will be entitled to bring an unfair dismissal claim after just six months of continuous service. That means any employer thinking about ending someone’s employment, for whatever reason, will need to consider their legal exposure from a much earlier stage.
And there is a second change that compounds this. The statutory cap on unfair dismissal compensation, currently the lower of 52 weeks’ gross pay or £118,223, will be abolished at the same time. Uncapped compensation changes the risk calculation for employers completely. Settlement will become much more expensive for employers who want to avoid the time and cost of defending an uncapped claim.
What this means in practice is that the volume of settlement agreements is likely to increase substantially from 2027 onwards. The values involved are likely to increase, too. Employees who might previously have been managed out without any formal process or financial package will find themselves in a much stronger position. Employers who previously relied on the two-year qualifying period as a buffer will need to start using settlement agreements much earlier in the employment relationship.
If you are employed and your situation feels unsettled, even if you have been with your employer for less than two years, it is worth understanding your rights now, before those changes take effect.
A Final Thought
What a good outcome looks like in a settlement agreement case is not always just the largest possible financial payment. It is a quick resolution. It is a positive reference that opens doors rather than closing them. It is confidentiality terms that protect your reputation. It is non-compete clauses that don’t unnecessarily limit your next move. It is walking away with clarity and the ability to move forward.
That is what we try to achieve for every client. Not the most contentious outcome, the best one.
Before You Decide What to Do Next
If there’s one thing I’ve learned after more than twenty years advising employees on settlement agreements, it’s that no two situations are ever quite the same. Sometimes the offer on the table is fair, and the best advice is to sign it. Sometimes there is an opportunity to negotiate a better financial package or improve the terms of your departure. The challenge is knowing which situation you’re in.
That’s why I always encourage people to understand the full picture before making a decision. Not just the wording of the agreement, but the circumstances that led to it, the claims they may have and what a realistic outcome looks like.
If you’ve been offered a settlement agreement and you’re unsure where you stand, we’d be happy to help. My team and I can review the agreement and explain your options in layman’s terms. We will give you an honest view on whether there is anything to be gained from taking things further.
