Our partners each have over 20 years’ experience in both drafting and advising on Settlement Agreements. If you instruct us we will guide you through the process and provide jargon-free and realistic advice tailored to your individual needs.
What is a settlement agreement?
A Settlement Agreement is a legally binding agreement between an employer and an employee (or former employee). It is often entered into at the same time as the employment relationship is ending, and will usually include agreement that the employer will pay a sum of money in return for the employee settling or agreeing not to bring any claims arising out of their employment or its termination.
Why do I need legal advice?
For employees, it is a legal requirement that you take independent advice from a qualified professional, such as a solicitor, in order for any claims to be validly settled and the employer will usually contribute an amount towards your legal fees. Most importantly it gives you the opportunity to take legal advice on whether the sum of money being offered is fair and to fully understand the contents of the Agreement and any impact it may have on you and your future work plans. You may also prefer to have professional help if you want to negotiate any of the terms.
For employers, Settlement Agreements need to be drafted correctly so that they comply with all relevant statutory requirements but there are many other points you may want to include to protect your business effectively. We will take the time to find out what you need and draft agreements which safeguard your interests.
What terms might be in a Settlement Agreement?
All Agreements vary but common terms include:-
- The agreed date of termination of employment and resignation from any offices held e.g. directorships.
- Financial terms (e.g. severance payment, any outstanding salary, notice pay and holiday pay due).
- Arrangements in relation to any contractual benefits, pensions, bonuses, shares and share options.
- Details of the employer’s contribution to the employee’s legal fees
- Which claims are being settled, and any which are not.
- Agreed wording for references and announcements.
- Post-termination restrictions.
- Confidentiality obligations.
Fees at a glance
Employees / Directors
| Type of Agreement | Level of Assistance Needed | Fee Range* |
|---|---|---|
| Standard employment relationship and no unusual terms | Advice on the terms and effect of the Agreement; no/minimal negotiation expected over the terms | £350 to £500 plus VAT |
| Standard employment relationship and no unusual terms | Advice on the terms and effect of the Agreement; some negotiation expected over the terms, with Barrass Whiting LLP acting on your behalf | £500 to £750 plus VAT |
| More complex involving e.g directorships, benefits, post-termination restrictions | Advice on the terms and effect of the Agreement; some negotiation expected over the terms, with Barrass Whiting LLP acting on your behalf | £750 to £1500 plus VAT |
| More complex involving e.g directorships, benefits, post-termination restrictions | Advice on the terms and effect of the Agreement; detailed negotiations expected over the terms, with Barrass Whiting LLP acting on your behalf | £1500 to £2500 plus VAT |
* The employer will usually contribute an amount to cover some or all of your legal fees. This amount may in itself be open to negotiation.
The above fees are based on an hourly rate of £300 plus VAT for a Partner with over 20 years’ experience. VAT is charged at 20%.
How can we help you?
If you would like advice relating to a Settlement Agreement, whether you are an employer, employee or director, please contact us.
We will take some details from you, explain the likely fees involved and arrange an appointment with one of our Partners. For your convenience, appointments can be held by telephone or remote meeting (e.g. Zoom, MS Teams).