Settlement Agreement Solicitors

What is a Settlement Agreement?

A settlement agreement (previously known as a compromise agreement) is a legally binding contract between an employer and an employee. Under the agreement, the employee gives up their right to bring employment law claims against their employer — typically in exchange for a financial payment. Curious what yours might be worth? Try our settlement calculator for an instant indicative range.

Settlement agreements are used in a wide variety of circumstances, including:

• Redundancy and restructuring situations
• Performance management or capability processes
• Mutual agreement to terminate the employment relationship
• Resolving ongoing workplace disputes or grievances
• Situations where the employer wishes to exit a senior employee discreetly

Do I Need a Solicitor?

Yes — and this is not optional. For a settlement agreement to be legally binding, the employee must have received advice from a qualified, independent legal adviser (typically a solicitor) about the terms of the agreement and its effect on their ability to pursue claims. The solicitor must then sign a certificate confirming that advice has been given.

Without this, the agreement is not legally valid. This requirement protects employees from signing away their rights without understanding what they are giving up. If your dispute is already going through ACAS, see solicitor vs ACAS for how the two roles differ.

Will My Employer Pay My Legal Fees?

In the vast majority of cases, yes. It is standard practice for employers to make a contribution — known as a "legal fee contribution" — towards the employee's costs of obtaining independent legal advice. This is typically between £250 and £750 plus VAT, though it can be higher for complex matters.

Our specialist solicitors will advise you whether the contribution offered by your employer covers our fees, and what (if anything) you would need to pay. In many straightforward cases, there is no cost to the employee at all.

Should I Sign the Agreement?

This depends entirely on the circumstances. Before advising you whether to sign, our solicitors will consider:

• The financial terms offered — are they reasonable?
• The strength of any employment claims you might have
• The reference terms included (or absent) from the agreement
• Any post-employment restrictions (restrictive covenants)
• Tax treatment of the payment
• Any confidentiality obligations

Not sure whether to sign or simply walk away instead? See settlement agreement vs resignation for how the two options compare.

We will give you an honest, frank assessment — including where we think you should push back or negotiate harder.

Can I Negotiate a Better Deal?

In many cases, yes. Employers often start with a figure that anticipates negotiation. Our solicitors are experienced in negotiating improved terms for employees, and regularly achieve enhanced financial payments, improved references, longer notice periods, and removal of unreasonable restrictive covenants.

Key Provisions to Check in Your Agreement

• Financial payment — the headline sum and how it is structured
• Notice pay — whether worked, paid in lieu, or as part of the settlement
• Tax treatment — the first £30,000 of a termination payment is generally tax-free
• Reference — what your employer has agreed to say
• Announcements — how your departure will be communicated internally and externally
• Restrictive covenants — post-termination restrictions on working for competitors
• Return of property — laptops, phones, company credit cards
• Confidentiality — who can you tell about the agreement and its terms?

How Long Does It Take?

In most straightforward cases, we can review your agreement, advise you, and complete the process within 24–48 hours. If you have a very tight deadline, call us on 020 3058 3365 and we will do everything possible to accommodate you — including same-day turnaround where necessary.

Contact Our Settlement Agreement Team

To speak to a specialist settlement agreement solicitor, call us on 020 3058 3365 or complete our online enquiry form. We offer a free initial consultation and will advise you honestly on your options.