EMPLOYERS – ARE YOU OBLIGED TO PAY

YOUR EMPLOYEES LEGAL COSTS FOR

SETTLEMENT AGREEMENTS?

If an employee signs a Settlement Agreement then the employee will not be able to bring any legal claims against you providing these claims are set out clearly in the Settlement Agreement.

For the Settlement Agreement to be binding on the parties, the employee must receive independent legal advice on its terms and effect before the employee signs the document.

The categories of advisers who can provide independent legal advice on Settlement Agreements include a qualified lawyer, i.e. a Barrister or a Solicitor who holds a current Practising Certificate, but it is the employee to whom the advice is given who has primary liability for paying the legal fees for obtaining independent legal advice.

However, most employers who want an employee to sign a Settlement Agreement will agree to make a contribution towards the employees legal fees, usually in the range of £350 to £1000 depending on the complexity of the Settlement Agreement and sometimes determined by how much money is being paid under the Settlement Agreement.

It is important for employers to put a cap on the contribution they are prepared to make towards costs

If you are an employer or employee requiring advice and assistance in relation to a Settlement Agreement contact us now on  01606 74301 or email [email protected] or [email protected]