Compromise agreements are an essential element of employment law – they allow the settlement of potential employment disputes either prior to or during litigation and therefore reduce the costs of litigation, the stress of Employment Tribunal proceedings, and allow both the employer and the employee to limit their risk relating to any potential (or existing) proceedings. If an employee is seeking to enter into a compromise agreement then they must receive independent legal advice from a relevant (and suitably qualified) legal adviser. However, what happens if that adviser gives poor advice on the employee’s compromise agreement? Who does the employee have recourse against? What losses do they incur? In this post we’ll look at this issue by addressing the following elements:
- What is a compromise agreement?
- Who should I receive advice from on my compromise agreement?
- What happens if I receive bad advice on my compromise agreement?
- What can I do if I receive bad advice on my compromise agreement?
What is a compromise agreement?
A compromise agreement is a specific type of contract which is regulated by statute. It allows an employer and an employee to settle a potential or existing employment law dispute, with the employer offering some form of benefit (either financial or non-financial) in return for the employee agreeing that they will not pursue a claim against their employer.
Who should I receive advice from on my compromise agreement?
Under the Employment Rights Act 1996 the employee must receive independent legal advice from a relevant legal adviser. The agreement must identify the adviser and must state that they are independent of the employer. The meaning of “independent” is relatively straightforward – the adviser must not be influenced through any means by the employer or any other third party – whether this influence is personal or professional. So, who can be a relevant legal adviser? The following can be relevant legal advisers for the purpose of a compromise agreement (among others):
- A compromise agreement solicitor
- A barrister
- An appropriately-trained Trade Union official
What happens if I receive bad advice on my compromise agreement?
If you receive advice from a relevant legal adviser who isn’t suitably independent of your employer, the legal adviser isn’t suitably qualified, or you just receive bad advice then you may wish to take action against the adviser. You could potentially do this through a claim for professional negligence against the adviser. However, you must first show that bad advice was given, that you suffered loss, and that the loss was caused by the bad advice. This can
What can I do if I receive bad advice on my compromise agreement?
Redmans Solicitors are settlement agreement solicitors based in Richmond and the City of London.