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People discussing legal documents; our Settlement Agreement Solicitors discuss when these might be needed, and how we can assist.
Settlement agreements, also known as compromise agreements, are legally binding contracts that are used to resolve disputes between parties, typically in employment cases. These agreements provide a structured resolution to end an employment relationship on mutually agreed terms. They are a common tool for resolving disagreements without the need for litigation, which can be costly, time-consuming, and stressful for all involved. Our Settlement Agreement Solicitors take a closer look at when settlement agreements are used and who might need one. 
Our Settlement Agreements Solicitors discuss Settlement Agreements, when they are needed, and how much they cost.
Get in touch today to speak to our Settlements Agreement Solicitors. 

When are Settlement Agreements required? 

Settlement agreements are utilised in various situations within the employment context, including but not limited to: 


To make the process smoother and to provide a clean break, employers might offer a settlement agreement to ensure that the employee does not pursue any claims in exchange for a compensation package. In such cases, usually the employer will be offering an good incentive package, which the employee will have accepted before they instruct our Settlement Agreement Solicitors to advise them on the terms of the agreement. Therefore, our professional experience is to advise on the terms of the settlement agreement, not the attractiveness of such settlement agreed. 

Dispute Resolution 

In cases of workplace disputes, disagreements, or grievances, such as allegations of bullying, discrimination, or unfair treatment, a settlement agreement can be a way to resolve the issues without going to an employment tribunal. 

Performance Concerns 

If an employer has concerns about an employee’s performance, and both parties agree that ending the employment relationship is the best course of action, a settlement agreement can be offered. 

Ill Health 

In circumstances where an employee is unable to continue working due to health reasons, a settlement agreement can be a compassionate way to conclude the employment, often including terms that support the employee’s transition. 

Who Might Need a Settlement Agreement? 


Employers may initiate settlement agreements to reduce the risk of future claims by an employee, and to manage the end of an employment relationship in a controlled and amicable manner. It allows them to ensure confidentiality over the terms of the departure, including the circumstances leading to the agreement, and can help protect the reputation of the business. 


Employees might need a settlement agreement to secure a fair compensation package, particularly if they feel they have been wronged or if they are leaving under difficult circumstances. It can provide a sense of closure and financial security through a lump sum payment, often in exchange for waiving their rights to make any future claims related to their employment or its termination. 

Legal Representatives 

Legal professionals, such as solicitors specialising in Settlement Agreements, often play a crucial role in advising on the terms of such agreement. They ensure that the terms are fair and that their client (whether the employer or employee) understands their rights and the implications of signing the agreement. 

What things should I consider before agreeing a Settlement Agreement? 

Legal Advice 

It is a legal requirement for the employee to receive independent legal advice on the terms and effect of the settlement agreement for it to be valid. Employers often contribute to, or pay in full, the legal fees incurred by the employee in seeking this advice. Our Settlement Agreement Solicitors usually invoice the employer directly, so our client has no stress in trying to fund the settlement agreement themselves. 


Settlement agreements usually include confidentiality clauses, restricting both parties from discussing the terms of the agreement or the reasons for the employee’s departure. 

Waiver of Claims 

Employees typically agree to waive their rights to bring any claims against their employer, including those that could be brought in an employment tribunal or court. 
Settlement agreements can be a practical solution for both employers and employees to resolve disputes and conclude employment relationships on agreed terms. They offer a way to avoid the uncertainties and expenses associated with litigation, providing a clear and final resolution to complex situations. Our Settlement Agreement Solicitors are specialists in considering and advising on the terms of Settlement Agreements, if you have agreed one with your employer. Contact our team, below, for a call back within one working hour to discuss your settlement agreement. 

Request a call back from our Settlement Agreement Solicitors 

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