Does a settlement agreement need to be witnessed?

A settlement agreement is a formal legal agreement between employer and employee setting out the terms of the employee's exit from the business. The agreement records the agreed settlement terms, often including financial compensation for loss of employment.    

In this article, our expert settlement agreement solicitors look at whether a settlement agreement needs to be witnessed and what you need to consider when seeking legal advice.

You may think an important legal document like a settlement agreement must be witnessed, however it does not. Once you and your employer have signed the document it is binding on both of you.

The only circumstances where the settlement agreement needs to be witnessed, is if it has been prepared as a deed. Your settlement agreement solicitor will tell you whether your agreement needs witnessing or not. They will also advise you on the terms and effect of the settlement agreement.  

When is a settlement agreement legally binding?

A settlement agreement is legally binding if the following conditions are met:  

• The agreement must be in writing
• The agreement must relate to a particular complaint or proceedings
• The employee must have received advice from a relevant independent adviser on the terms and effect of the proposed agreement and its effect on the employee’s ability to pursue their claim or proceedings before an employment tribunal or other court
• The independent adviser must have insurance or professional indemnity insurance covering the risk of a claim by the employee for loss arising from that advice
• The agreement must name the adviser
• The agreement must specify the statutory provisions regulating the validity of the settlement agreement have been satisfied

Most employers will offer to pay a fixed cost contribution to enable you to take legal advice so the settlement agreement can be completed.  

If, after you have taken legal advice from a solicitor, you decide not to sign the document, you are free to make a counter-offer to your employer or to pursue your employment claims separately.

Taking legal advice on your settlement agreement  

Your employer will want you to take legal advice on the settlement agreement. As specialist settlement agreement solicitors, Thompsons provides independent expert legal advice to employees across the country.

If you sign the settlement agreement, it will be binding on you, so our team make sure that we go through:

• What you are getting from the settlement agreement  

• What you are giving up by signing the settlement agreement  
• Any legal jargon in the agreement so you know what you are signing  
• The tax implications of agreeing to the settlement agreement

The settlement agreement legal advice we provide is confidential to you. We will not disclose the information you give us. Nor will we discuss the legal advice given with your employer or to anyone else unless you authorise us to do so.  

Whether you sign the settlement agreement is your decision based on what you think is right for you.  

Why choose Thompsons as your settlement agreement solicitors?  

Thompsons has a dedicated team of solicitors with vast experience in advising on settlement agreements.  

When you instruct one of our team, you can be sure that you are getting specialist and independent legal advice.

We will not push you into signing a settlement agreement. We will take the time to make sure that signing the terms is what you want to do, after having had the legal advice you need to make an informed decision.  

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