What does a Solicitor do with a Settlement Agreement?

When your employer offers you a settlement agreement, you are legally required to take independent advice before signing. But what does that advice actually involve, and what is the solicitor looking at on your behalf?

Understanding Your Situation First

Before a solicitor can advise you properly, they need to understand the full picture. That means finding out why the agreement has been offered, what led to it and what your employment history looks like.

This matters because the reason your employment is ending, or why the offer has been made, directly affects whether the terms are fair. A settlement agreement solicitor will want to know:

  • When and how the agreement was offered to you
  • Whether a formal process was followed by your employer, such as a redundancy or disciplinary procedure
  • Whether anything happened during your employment that could give rise to a legal claim
  • What you were earning and what your contractual entitlements are

Without this context, it is impossible to assess whether what is on the table is a reasonable offer or whether you should be pushing for more.

Checking Whether the Settlement Agreement Offer Is Fair

Once a solicitor understands your circumstances, they can assess whether the financial package reflects what you are actually owed. Then they check if there are any claims you might have that the agreement is asking you to give up.

For example, if your employer did not follow a proper process before offering you the agreement, you may have a claim for unfair dismissal. Under section 111A of the Employment Rights Act 1996, employers may initiate pre-termination discussions, but that protection is limited to ordinary unfair dismissal claims. If a flawed process has been followed, the value of that potential claim needs to be reflected in what you are being offered.

A settlement agreement solicitor will review the offer with you, advise whether it is reasonable and help you decide whether to accept, reject or negotiate. In many cases, improvements can be secured that better protect your position and future prospects. 

Unfair Dismissal – What You Need to Know

If your employer has not followed a fair process, you may have an unfair dismissal claim. Employees should be given a reasonable period to consider the agreement. As a general guide, 10 calendar days is regarded as reasonable unless the parties agree otherwise. 

If you were to pursue an unfair dismissal claim through an employment tribunal rather than signing the agreement, you would need to do so within three months of your dismissal date. The compensation available can be significant. It can be potentially up to a year’s salary plus a statutory redundancy payment equivalent.

This does not mean you should automatically reject the agreement and go to a tribunal. Tribunal claims are uncertain, time-consuming and stressful. But it does mean the strength of any potential claim should be factored into whether the settlement figure is adequate. A settlement agreement solicitor will assess this honestly and give you a realistic picture of where you stand.

Certifying the Agreement

For a settlement agreement to be legally binding, your solicitor must sign a certificate confirming that they have given you independent advice on its terms and effects. Without independent legal advice, the agreement fails under Section 203 of the Employment Rights Act and cannot legally waive your employment rights.

This certificate is what makes the agreement enforceable. Your solicitor will also confirm that they hold professional indemnity insurance. This is another legal requirement for the advice to count.

Who Pays the Legal Fees?

In most cases, your employer includes a contribution towards your legal fees within the settlement agreement itself. Your solicitor invoices the employer directly for their advice, up to the amount specified in the agreement.

This means that in the majority of cases, getting advice costs you nothing personally. If the terms of your agreement require additional negotiation beyond the standard sign-off, there may be further costs involved. However, a good solicitor will be upfront about this before any additional work begins, so there are no surprises.

What Happens to the Agreement Terms Themselves?

Your solicitor is not just there to sign the agreement off. They will also review every clause and not just the payment figure. That includes:

  • Confidentiality obligations and what you can and cannot say after leaving
  • Reference wording and how your departure will be described
  • Restrictive covenants that could limit your next career move
  • Any warranties you are being asked to make about your conduct

Some agreements require you to warrant that you are not aware of any circumstances that would have entitled your employer to dismiss you without notice. They will cover situations where you may have been aware of issues you had not disclosed. It is important to understand exactly what you are confirming before you sign.

Speak to a Settlement Agreement Solicitor Today

If you have been offered a settlement agreement and want to understand whether the terms are fair, our specialist settlement agreement solicitors are here to help. We deal with settlement agreements every day, give straightforward advice and can turn advice around quickly, including same-day, where needed. Get in touch to find out where you stand before you sign anything.