What Is A Reasonable Settlement?

When a dispute arises between two parties, the dispute can be settled in court or out of court through mediation and negotiation of a settlement. Not all cases should proceed to full trial as the parties can easily come to a compromised agreement. Ideally, solicitors should be involved in the process of negotiating a settlement to ensure the rights of each party are not breached. It is important to note that there are laws governing how settlements should be negotiated. These laws seek to answer the question - what is a reasonable settlement agreement?

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Employment Settlement Agreement Law

Settlement agreements are usually made for a number of reasons. The main goal is to resolve a dispute. The second reason is to provide a waiver or release. A settlement can be reached to withdraw a civil case from litigation. In employment law, workers and their employers can come to a negotiated settlement to ensure the aggrieved party does not pursue matters through the statutory employment tribunal. 

Requirements for Settlement Agreements

Settlement agreements are commonly used to avoid employee-employer disputes. Employers normally use settlement agreements to terminate employment contracts with mutually-agreed terms and conditions. The agreement is meant to ensure the employee whose employment has been terminated does not take legal action through the statutory tribunal for lack of financial compensation or other reasons. Below are some of the key requirements of settlement agreements:

They must be in written format

Agreement must relate to a particular proceeding or a given complaint- An adviser must be identified in the agreement- The adviser must be insured against liabilities that may arise from the advice they offer- The agreement must state that the conditions set out by the relevant legislation have been met- The employee in question must have received independent advice from an adviser

As you can see, there are strict requirements meant to ensure employers do not abuse the settlement laws. It is recommended you hire a solicitor to look through the settlement agreement and advice you accordingly on matters relating to notice payment, compensation for loss of office, pension, bonuses and commissions, medical and life insurance payments. The solicitor will look through the agreement to ensure everything is in order. 

However, you should know that solicitors do not work for free. This means that you will lose part of your compensation as legal fees. Therefore, you should keep this in mind when negotiating a settlement agreement. 

Average Payouts

You can expect to get up to £30,000 in tax-free extra-gratia payments. Be sure to do your research and consult a competent solicitor to ensure your employer does not take advantage of your situation. All bonuses and commissions will also be paid by the employer and this must be indicated on the agreement, and breakdown given. 

The key to getting a reasonable settlement lies in knowing your rights. Your attorney can tell you everything you need to know, but it is upon you to do your research before deciding whether or not to hire a solicitor.