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Statutory Requirements for a Compromise Agreement


Lawdit Solicitors - Expert Author

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19 January 2011

Section 203(3) of the Employments Rights Act 1996 requires the following conditions to be met for a compromise agreement to be valid:

The agreement must be in writing.

The agreement must relate to a particular complaint or particular proceedings.

The compromise agreement must relate to:

- A particular complaint in respect of a claim under a specific Act or Regulation.

- A particular proceeding in respect of a claim under a specific Act or Regulation.

The word particular is used to prevent all-embracing waivers in termination agreements.

The employee must have received independent legal advice on their rights.

The employee must have received independent legal advice for the compromise agreement to be binding.

There are four types of advisors which currently come under 'independent legal advisor':

- Qualified solicitors and barristers in England and Wales.

- Certified officers, officials, employees or members of an independent trade union.

- Certified employees and workers of an advice centre who are certified as competent to give advise, provided the advice is free.

- Those specified by the secretary of state such as Fellows of the Institute of Legal Executives employed by a solicitors' practice.

The adviser must not be employed by the respondent.

If the employee indicates that they have received independent legal advice, this will be sufficient evidence that the requirement has been satisfied.

The independent adviser must have a current contract of insurance covering the risk of a claim against them by the employee in respect of the advice.

Advice is limited to explaining to the employee the meaning of the terms of the agreement, what they mean and their effects on the employee. The employee need not be advised on whether or not they are getting a good deal.

The independent legal adviser must advise the employee of the agreements effect on their ability to bring a tribunal claim under the relevant legislation.

The agreement must identify the independent adviser.

By a paralegal at Lawdit Solicitors and can be contacted through email at

About the Author

Lawdit Solicitors offer services and advice for litigation, commercial contracts, Intellectual Property and IT legal agreements. We are experts in commercial law with a heavy emphasis on Intellectual Property, Internet and e-commerce law. Lawdit is a member of the International Trademark Association, the Solicitors' Association of Higher Court Advocates and we are the appointed Solicitors to the largest webdesign association in the world, the United Kingdom Website Designers Association.

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Article Published/Sorted/Amended on Scopulus 2011-02-10 14:12:46 in Legal Articles

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