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Publication date: 12.01.2026
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Meet or hold an online consultation with the client (employee or employer).
Gather information about employment, termination reasons, and documents.
Assess legal risks and options for the settlement agreement.
Explain the process, key terms, and legal consequences of signing.
Check the agreement for compliance with UK law (Employment Rights Act, ACAS guidelines).
Identify risky clauses (confidentiality, restrictive covenants, compensation, waiver of claims).
Calculate fair compensation for the employee or advise the employer on terms.
Prepare a written recommendation.
Formal consultation for the employee regarding the agreement terms.
Explain legal consequences, claims waived, and alternative options.
Provide written confirmation of independent legal advice for enforceability.
Negotiate with the employer or their lawyer to improve agreement terms (compensation, payment schedule, confidentiality).
Draft amendments to the agreement.
Ensure protection of the client’s interests in any compromise.
Prepare the final version of the agreement including all negotiated changes.
Sign by client and lawyer, confirm independent legal advice.
Provide client with a copy and instructions for compliance.
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A settlement agreement is a written contract between an employer and an employee allowing both parties to end their employment relationship by mutual consent. Its purpose is to avoid lengthy and costly court disputes while agreeing on key terms such as compensation, confidentiality, and future references.
Once signed, a settlement agreement typically prevents the employee from making future legal claims against the employer on the issues covered in the document. To be legally valid, employees must obtain independent legal advice from a qualified solicitor.
Most settlement agreements include:
For a settlement agreement to be legally binding in England, Wales, and Scotland, it must meet these requirements:
Written form – oral agreements are not sufficient.
Independent legal advice – the employee must receive guidance from a qualified solicitor or certified union representative.
Advisor identification – the agreement must name the advisor and confirm their qualification.
Specified claims – clearly list the claims the employee is waiving, e.g., unfair dismissal or discrimination claims.
Once these conditions are met, both parties must adhere to the terms. Breach may lead to legal remedies.
Many employees and employers assume settlement agreements do not require professional advice. Consultant Marketplace lawyers review every clause, clarify ambiguous terms, and negotiate improvements if needed.
Legal fees are usually covered by the employer, but advice is provided solely in the employee’s interest, ensuring full protection of rights and financial interests.
Without proper formalities, a settlement agreement has no legal effect. A qualified solicitor ensures all statutory requirements are met and confirms them in writing. For employers, we draft agreements tailored to employee and company needs.
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If you are offered a settlement agreement or considering one, get professional advice from Consultant Marketplace lawyers. Our experts help you make informed decisions and secure the best outcome.
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